The major countervailing forces that effect international business?

Answer 1

A. Globally Standardized versus Nationally Responsive Practices

On the one hand, offering a globally standardized product enables the firm to engage in mass production and mass marketing which can generate economies of scale giving the firm a big cost advantage over competitors. On the other hand, being nationally responsive and tailoring your product to consumers in each country where you operate can make your product more desirable than something mass-produced for a global market. (See "Going Global" Exercise 1.2 at end of chapter.)

B. Country versus Company Competitiveness

Sometimes the interests of a firm coincide with the interests of the firm's home country (e.g., "What's good for General Motors is good for the U.S."). However, sometimes what is good for the firm may be bad for the firm's home country (e.g., shipping jobs from the home country to cheaper foreign locations). Businesses need to understand the complex ways in which their operations affect their home and host countries in order to make the most prudent economic and political decisions.

C. Sovereign versus Cross-National Relationships

Countries may collaborate with each other or compete. Collaboration often involves a country giving up some of its sovereignty (for example, making treaties may limit a country's ability to act autonomously). Though countries normally prefer to maintain their sovereignty, they will often collaborate to gain reciprocal advantages (e.g., through trade agreements), to attack problems that a single country acting alone cannot solve (e.g., environmental agreements), or to deal with areas of concern that lie outside the territory of all countries (e.g., Antarctic exploration).