How the government controls foreign businesses operating within their borders
The Government uses a number of practices to control foreign business operating within their borders. Most of the measures used are against the violations of the provision of the world Trade Organization. Although, some of these practices are legitimate efforts protecting local companies from foreign competition. Some of the common measures used to control foreign businesses operating within the borders are to require foreign companies to create employ to the locals, rather than importing workers (Rogers, 2012).
Another method used to control foreign business is through a requirement to foreign business is to perform a certain percentage of labor in the country, rather than allowing foreign companies import the finished products. The government may require a foreign company to share sensitive information which it has, for example, the design specifications for chemicals used in producing certain items (Rogers, 2012).
The government may require a foreign company to comply with strict and expensive bureaucratic regulations.
When U.S companies do their business abroad, they face many issues which include:
They experience cultural misunderstanding that result from miscommunication especially when performing their businesses in China. Although people in china are proficient in English, it is unlikely to get a person who will strongly understand both Chinese and western culture to make delicate business negotiations.
Variation of Standards
The U.S often is placed at a disadvantage when doing business in foreign countries because of refusing to go along with the accepted practices. The reason is that U.S tries to safeguard ethical issues in their businesses.
For a business to succeed in another country, a person must change the model that served him well in his country. One needs to be flexible enough to adjust to the new countries business models and tradition. As a result of these differences, many business practices do not meet the required international standards since they do not always conform (Roger, 2012)
International business ethics refers to the business morals which are accepted while doing business. It is important for U.S to consider the following responsibilities and ethics while doing business in other countries.
When trying to maintain or retain business in foreign country, it is important not to use bribe or try to give favors to officials in charge
When U.S is doing business in a foreign nation, they should ensure that they do not release radioactive emission and other product from their industries that can cause pollution. In most cases, developing countries do not have strict rules concerning dumping of toxic element in the workplace. U.S should not take advantage of the country’s weakness.
Multinational corporations possess power that result from the control over different resources. However, the power comes with social responsibility. They must give something to the society for them to prosper. It is important for U.S to consider social consequences of their economic actions when making decisions concerning the business. The decisions should be in favor of good economic and social consequences (Roger, 2012)
Rogers, S. (2012). Essentials of Business Law San Diego, CA: Bridge point Education, Inc.