Management Case

Over the last century many companies took advantage of a world market that was increasingly open to international expansion and trade. As economies opened to global expansion, communication technology showed exponential growth and facilitated doing business anywhere and anytime with the help of internet and phone/video conferencing.

International expansion in other countries does not only have positive effects on the hosting country, but unfortunately it has negative influences as well. Foreign investment has some negative effects on the national economy of host countries that are in a growing stage because it forces the domestic investment to retreat due to the overwhelming competition. The host country must give foreign investors a certain degree of administrative control that will therefore limit if not even impair the effectiveness of economic policies in the host country by limiting the decision making power Confirms many of the economic..., 2004).

Some economists believe that foreign investment may lead to the creation of dependency and underdevelopment in many cases may be based on the exploitation of cheap labor and natural resources of natural resources (Confirms many of the economic..., 2004).

Managing an international firm takes much more work than managing a domestic firm. Transportation challenges of goods around the world, communication challenges due to language barriers and different time zones constitute operational challenges of managing a company from a remote location (Haizer & Render, 2012).

Ignoring the cultural differences and customs of the host country when doing business internationally, can lead to inappropriate ineffective marketing approaches, poor labor-management relations, or adverse currency fluctuations ( Sharp, n.d.).

There are many aspects of culture like religion. Beliefs and customs which are hard to understand unless one id not willing to take the time and study that particular culture. Failing to understand the customs of a host country can deeply impact an organization and lead to consumers lose faith and confidence in the product and company, negative public reactions from locals, loss of revenue, sales opportunities and customers and possible punishment like legal litigations and lawsuits (What is one of the most..., 2011).