Liberalization has opened the doors to global expansion.Outline the difficulties an organization may encounter when seeking global expansion

Difficulties in seeking global expansion
• Language barriers may cause a problem of translation.
• Cultural attitudes towards factors such as time and productivity e.g. keeping appointments.
• Lack of education and technical skills in the workforce: The developing countries still have inexperienced workers with very little opportunity of handling modern machinery.
• Scarcity of or different standards for raw materials, parts, equipment and other facilities – it may not be possible for a multinational to get the raw materials locally.
• Hostile and unstable political climate. Frequent changes in government authority and policies causes an unpredictable environment to multinational firms.
• Fluctuations in the international economy e.g. inflations and currency devaluations.
• Unfamiliar legal systems – sometimes laws differ in areas such as taxation and Human Resource practices.
• Differences in accounting systems.
• Custom duties and other tariffs make international operations more difficult.

Leave a Reply

Your email address will not be published. Required fields are marked *