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7 Main Problems of International Business

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The following points highlight the seven main problems of International business.

The problems are: 1. Different Trade Patterns 2. Regulatory Measures 3. Lop Sided Development of Developing Countries 4. Economic Unions 5. National Policy of Development 6. Procedural Difficulties 7. Other Problems.

International Business Problem # 1. Different Trade Patterns:

International business has to deal with the business patterns among the various countries of the world.

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It has to take into account these business policies of various countries which govern their imports and exports. These policies and practices impose certain constraints and restrictions on international business.

International Business Problem # 2. Regulatory Measures:

Every country wants to export its surplus natural resources, agricultural produce and manufactured goods to the extent, it can and import only these goods and products which are not produced or manufactured within the country. For this purpose regulatory measures like tariff barriers (custom duties) non-tariff barriers, quota restrictions, foreign exchange restrictions, technological and administrative regulations, consulter for­malities, state trading and preferential arrangements, trade agreements and joint commis­sions etc. Come in the way of free trade and unfettered flow of foreign business.

International Business Problem # 3. Lop Sided Development of Developing Countries:

Developed counters are equipped with sophisticated, technologies capable of transforming raw materials into finished goods on a large scale. While developing countries on the other-hand lack technological knowledge and latest equipment. It leads to the lop sided development in the international business.

International Business Problem # 4. Economic Unions:

There is an increasing tendency among nations to form small groups of Economic Unions which help them to negotiate terms for the business with other countries.

International Business Problem # 5. National Policy of Development:

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The country desirous of achieving self-sufficiency, follows a strategy of importing capital goods equipped with latest and sophisticated technology and restricting imports of less important consumer goods with a view to lowering down its import bill.

International Business Problem # 6. Procedural Difficulties:

Different countries have evolved different procedures, practices and documents in order to regulate the export trade. Some of these such as foreign exchange control regulations and others have been formulated after keeping in view the national objectives and have posed certain procedural problems to exporters and importers.

International Business Problem # 7. Other Problems:

Apart from the problems written above there are many other internal difficulties which restrict our export business and consequently affect the foreign exchange earnings.

They are:

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(i) Business and industry have not recognised the importance of international business,

(ii) Inflation, high prices and black marketing are starting us in the face. If the situation persists it may put our price level beyond the means of our customers abroad, no matter how badly they need our export,

(iii) Our internal economy is being managed very badly in recent years. If it continues we cannot supply our own essential need. What to say about supply to other nations,

(iv) Poor business ethics is also responsible for our international business.

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