Global Dimensions of International Business Assignment Essay Example

government to keep the political stability in Egypt, for smooth business functioning throughout the world & controlling oil prices which are on their peak.

IMPORTANCE OF PROPERTY RIGHTS IN GLOBAL BUSINESS ECONOMY

In a legal sense, term property refers to a resource over which an individual or business holds a legal title; that is a resource that it owns. Resource include land, building, equipment, capital, minerals rights, business and intellectual property. Property Rights refer to the bundle of legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource. Property Rights are important in the global business economy because: The philosophy behind protecting property rights in the global business economy, as it is reward to the originator of a new invention, books, musical record, clothes design, restaurant chain and the like; for his or her idea & effort.

Such property rights are very important stimulus to innovation and creative work. They provide An incentive for people to search for novel ways of doing things and they reward creativity. e. g. - Consider an innovation in automobile industry; say a use of non conventional fuel to be used in all kinds of vehicles with maximum efficiency and low cost of fuel. This gives automobile firms an incentive to undertake the expensive, difficult and time consuming basic research required to generate new fuel. (It can cost $800 million in R & D and take 10 years to set a new fuel in the market)

Also economic evidences suggests that high levels of corruption i. e. theft of

property rights significantly reduce the foreign direct investment, level of international trade, & economic growth rate in a country. By siphoning off profits corrupts politicians & bureaucrats reduce the returns to business investment and hence reduce the incentive of both domestic and foreign businesses to invest in that country. Because of all the above reasons explained it is important to protect property rights to benefit innovator, consumers and to promote healthy competition.

The protection of intellectual property rights differ greatly from country to country. While Many countries have straight intellectual property regulations on their books. Now, 188 countries are members of the “World Intellectual Property Organization”, all of whom have signed international treaties designed to protect intellectual property.

CULTURE AT WORK PLACE BY GEERT HOEFSTEDE

Of considerable importance for an international business with operations in different countries is a how a society’s culture affects the values found in the workplace. Probably the most famous study of how culture relates to values in the workplace was undertaken by ‘Geert Hoefstede’. As a part of his ob as a psychologist working for IBM, Hoefstede collected data on employee attitudes and values for more than 1,00,000 individuals from 1967 to 1973.

Hoefstede’s ‘Power Distance’ dimension focussed on how a society deals with the fact That people are unequal in physical & intellectual capabilities. According to Hoefstede, high power distance cultures were found in countries that let inequalities grow over time into inequalities of power & wealth.

The ‘Individualism versus Collectivism’ dimension focussed on the relationship between The individual and his or her fellows. Individualistic societies, the ties between individuals were loose and

individual achievement and freedom were highly valued. In societies where collectivism was emphasized; the ties between individuals were tight.

Hoefstede’s ‘Uncertainty Avoidance Dimension’ measured the extent to which different cultures socialized their members into accepting ambiguous situations & forecasting uncertainty. Members of high uncertainty avoidance cultures placed a premium on job security, career patterns, retirement benefits and so on. Lower uncertainty avoidance cultures were characterized by a greater readiness to take risks & less emotional resistance to change.

Hoefstede’s ‘Masculinity versus Feminity’ dimensions looked at the relationship between gender & work roles. In masculine cultures, sex roles were sharply differentiated and traditional “Masculine Values”, such as achievement & effective exercise of power, determined culture ideals. In Feminine cultures sex roles are sharply distinguished, the little differentiation was made between men & women in the same job. Hoefstede created on index score for each of these 4 dimensions that ranged from 0 to 100 And scored high individualism, high power distance, high uncertainty avoidance, & high Masculinity.