1. Environmental factors
Internationalisation gives birth to problems peculiar to internationalisation. This is because of change in various environmental factors for any enterprise due to crossing of borders with regard to market and activity zones. There are basically three factors, namely the market environment (types of domain, the market structure, business transaction. customs etc.), political system and military system and the culture and language of the nation’s concerned.
The internationalisation involves a situation where the enterprise activity is to carried out under these three environmental factors where these factors from a complex state (two or more than two environments including that of one’s own company).
2. Three movements and the related topics
Let us now see what type of effect internationalisation has on the enterprise activity?
The effect of internationalisation which is visible to the eyes is the working of man, material and money beyond the borders of the nation. However, in the background, there are three movements, namely information resources (technology, knowhow, brand and management control capability etc), added value (the value generated by the organisation; this is almost the total of the manpower cost and the profits) and the culture (life, customs, behavioral pattern and value or standards etc.) These three movements are considered to have big effect on the enterprise activity.
The internationalisation progresses smoothly provided these three movements do not fluctuate beyond a limit with the internationalisation of enterprise.
For example, the fountainhead of international competitive strength cannot be obtained, if the resources like knowhow and brand etc. do not move. The sources of direct investment in overseas production cannot be materialised unless the added value is transferred locally to some extent. The products or the services cannot become acceptable unless the transfer of culture is permitted to some extent. In the event of lack of such flexibilities, there is possibility, of repercussion also.
Considering from the viewpoint of such relationship two issues can be thought of concerning the internationalisation of enterprise activity. One is “strategy of transfer”, in the other words, how to move the three factors which have impact and the second is “how to deal with the problems arising due to the movement”, in another words, how to move these three factors in more effective manner. The enterprise has to select which country it should move to for internationalisation while considering these two issues.
Internationalisation gives birth to problems peculiar to internationalisation. This is because of change in various environmental factors for any enterprise due to crossing of borders with regard to market and activity zones. There are basically three factors, namely the market environment (types of domain, the market structure, business transaction. customs etc.), political system and military system and the culture and language of the nation’s concerned.
The internationalisation involves a situation where the enterprise activity is to carried out under these three environmental factors where these factors from a complex state (two or more than two environments including that of one’s own company).
2. Three movements and the related topics
Let us now see what type of effect internationalisation has on the enterprise activity?
The effect of internationalisation which is visible to the eyes is the working of man, material and money beyond the borders of the nation. However, in the background, there are three movements, namely information resources (technology, knowhow, brand and management control capability etc), added value (the value generated by the organisation; this is almost the total of the manpower cost and the profits) and the culture (life, customs, behavioral pattern and value or standards etc.) These three movements are considered to have big effect on the enterprise activity.
The internationalisation progresses smoothly provided these three movements do not fluctuate beyond a limit with the internationalisation of enterprise.
For example, the fountainhead of international competitive strength cannot be obtained, if the resources like knowhow and brand etc. do not move. The sources of direct investment in overseas production cannot be materialised unless the added value is transferred locally to some extent. The products or the services cannot become acceptable unless the transfer of culture is permitted to some extent. In the event of lack of such flexibilities, there is possibility, of repercussion also.
Considering from the viewpoint of such relationship two issues can be thought of concerning the internationalisation of enterprise activity. One is “strategy of transfer”, in the other words, how to move the three factors which have impact and the second is “how to deal with the problems arising due to the movement”, in another words, how to move these three factors in more effective manner. The enterprise has to select which country it should move to for internationalisation while considering these two issues.