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Chapter: Business Science - International Business Management - Conflict Management and Ethics in International Business Management

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Disadvantages of international business

Adverse effects on economy: One country affects the economy of another country through international business. Moreover, large-scale exports discourage the industrial development of importing country. Consequently, the economy of the importing country suffers.

DISADVANTAGES OF INTERNATIONAL BUSINESS ARE AS FOLLOWS:

 

Adverse effects on economy: One country affects the economy of another country through international business. Moreover, large-scale exports discourage the industrial development of importing country. Consequently, the economy of the importing country suffers.

 

            Competition with developed countries: Developing countries are unable to compete with developed countries. It hampers the growth and development of developing countries, unless international business is controlled.

 

            Rivalry among nations: Intense competition and eagerness to export more commodities may lead rivalry among nations. As a consequence, international peace may be hampered.

 

            Colonization: Sometimes, the importing country is reduced to a colony due to economic and political dependence and industrial backwardness.

 

            Exploitation: International business leads to exploitation of developing countries the developed countries. The prosperous and dominant countries regulate the economy poor nations.

 

            Legal problems: Varied laws regulations and customs formalities followed different countries, have a direct b earring on their export and import trade.

 

            Publicity of undesirable fashions: Cultural values and heritages are not identical in all the countries. There are many aspects, which may not be suitable for our atmosphere, culture, tradition, etc. This, indecency is often found to be created in the name of cultural exchange.

 

            Language problems: Different languages in different countries create barriers to establish trade relations between various countries.

 

            Dumping policy: Developed countries often sell their products to developing countries below the cost of production. As a result, industries in developing countries of the close down.

 

            Complicated technical procedure: International business in highly technical and it has complicated procedure. It involves various uses of important documents. It required expert services to cope with complicate procedures at different stages.

 

            Shortage of goods in the exporting country: Sometimes, traders prefer to sell their goods to other countries instate of in their own country in order to earn more profits. This results in the shortage of goods within the home country.

 

            Adverse effects on home industry: International business poses a threat to the survival of infant and nascent industries. Due to foreign competition and unrestricted imports upcoming industries in the home country may collapse.

 

 

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