Abstract
This paper explores the role that international
business and sustainable development play. International business has been
fostered by the continued cooperation among counties in the same and different
regions of the world. As such, organizations have ventured into new territories
beyond their borders. This paper has discussed the various factors that foster
internationalization of businesses as well as the various forms that these
entities take. Some established drivers include technological developments,
liberalization of borders, and consumer pressure. On the other hand, the
various modes of international businesses include franchising, licensing, export
and import, as well as direct investments. On the other hand, sustainable
development has ensured that the available resources such as water and land are
used prudently to avoid starving future generations. This combination of
international business and sustainable development has been deemed essential in
spurring social and economic growth that will not only be enjoyed by current
but also future generations.
Keywords: International business,
sustainable development, economic development, technology.
Table of Contents
Introduction
The
internationalization of businesses in the current world has come a long way to
reach the contemporary levels. Globalization of business can be pegged as an
evolution that started several centuries ago but it was greatly hampered by the
concurrent warfare, trade barriers, and poor technology. However, in recent times,
international business has been occasioned and supported by the developments in
technology, removal of trade tariffs, and the creation of trading blocs among
many other factors. As a result of these favorable conditions, many
organizations have contended on taking their businesses across the national
borders. Various methods can be considered in taking business operations to the
international scene. These include direct investments, franchising, licensing,
imports and exports. At the same time, while business has been taken to the
international level the need to adhere to sustainability has been deemed
necessary. Environmental conservation has remained a hotly debated topic in the
current world as organizations strive to ensure that they observe the
sustainability goals that have been set by national government as well as the
international community. As such, international business and sustainable
development have brought many major impacts. This paper discusses that international
business and sustainable development play a major role in the enhancement of
technology and knowledge sharing, bringing global peace, cultural exchange,
fostering economic development, protection of resources, and environmental
conservation.
Overview of International Business
International business comprises of activities of moving goods across
borders. It also comprises of contractual engagements that allow foreign organizations
to utilize processes from other countries. International business has further
fueled the rate of globalization. With this is mind, various factors have been
identified as some of the major drivers of international business.
Drivers of International Business
First,
the advancement in technologies over the last few decades has brought the
ability to ensure that movement of goods and people has been enhanced. Besides,
information sharing across the world has been possible. These technologies have
been paramount in pushing for the increased expansion and efficiency in global
business operations. Additionally, another driving factor is that there has
been liberalization of borders by many governments which has heightened
cross-border trading as well as movement of resources. As reported in research
by Thomé and
Medeiros (2016), liberalization of borders sees the elimination of tariffs as
well as other customs imposed on foreign goods. The development of economic trading blocs such as the North America
Trade Organization (NATO) and European Union (EU) have been key drivers of the
growing international business.
Moreover,
the ever-growing consumer pressure has pushed many companies to take their
operations to the international scene. Given the high rates of technological
developments that have allowed the consumers to gain information about goods
and services that are unavailable in their locations but available somewhere
else. As reported by Thomé and Medeiros (2016), the scarcity of goods and
services in certain areas has pushed foreign companies to focus on expanding
their operations beyond their national borders. Hence, providers and manufacturers respond to this demand by taking
their businesses international. Additionally, enhanced cross-national
cooperation has heightened international business. This has been made possible
by the bilateral treaties that governments engage which has seen businesses
moving across borders.
Modes of Conducting International Business
Engaging in international business necessitates organizations to take
various forms that include licensing, direct investments, exports and imports,
as well as franchising. These
aspects have been discussed at length by Watson IV, Weaven, Perkins, Sardana and
Palmatier (2018) who showcase what each mode entails. Franchising entails a legal arrangement in which a
business owner (franchisor) gives another person the right to utilize their
business model or brand for a specified time. Franchises remit a certain fee to
the original business owner but remains an independent entity. On the contrary,
licensing involves a contractual engagement where a business owner sells their
rights of intellectual property to another organization who remits a certain
amount of royalty annually. In this case, the licensor retains control of the
intellectual property but licensee has total control of the business
operations. As noted by Watson et al. (2018), there is often a confusion
between franchising and licensing due to their close similarity. Foreign
investments are properties such as service firms of manufacturing companies
that are set up in host nations for the purpose of generating profits and venturing
into new markets. Finally, exports are the tangible goods and intangible
services that a country produces for the sole purpose of being transported to other
countries. On the other hand, imports are tangible goods and intangible
services that a country purchases from foreign nations for purposes of domestic
use.
Overview of Sustainable Development
Back in 1987, the World Commission on Environment and Development established
the need for sustainable development which they defined as the capacity to
articulate and meet contemporary needs without risking the future generations
(Emas, 2015). This definition was an expansion of the previously developed
environmental policy that sought to internalize and externalize degradation.
Overall, the primary objective of sustainable development is to guarantee
economic sustenance through environmental conservation and the integration of
social, economic, and environmental issues by following a chain of proper
decision-making channels. Furthermore, while focusing on sustainability, there
it is paramount to consider the substitutability of some forms of capital. As
noted by Emas (2015), strong adherence to sustainability realizes the need to
ensure that natural resources are maintained since they cannot be replaced by
existing manufacturing capital.
The
principles of sustainable development are numerous since each nation has
created its set despite the existence of universally-recognized ideologies. However,
the core principle that underlies others is the need for integration of the
social, environmental, and economic aspects as the prime features of
decision-making (Emas, 2015). Other features of sustainable development embrace
a unified decision-making at their core. As such, it is as a result of this
deeply embedded perceptive of integration that differentiates sustainability
from other policy forms. Thus, to attain sustainability, there is the need to
ensure that all issues that may bring the disintegration of environmental,
economic, and social goals are eliminated.
Roles of International Business
Technology and Knowledge Sharing
Developed countries such as Canada, USA, Germany, and Japan among many
others have become global leaders in technology development. The rapid
proliferation and innovation of integrated technologies have been major drivers
of globalization. Companies from these developed nations that establish
businesses in developing worlds where they introduce the new technologies. Majorly,
these technologies enhance the manufacturing and ensure swift service delivery
(Hovhannisyan
& Keller, 2015). This enhancement
has further been essential in ensuring that underdeveloped are not left behind.
For instance, internet has currently been spread to all corners of the world
which has made sharing and accessing information easy to many people.
The
spread of technologies has been essential in the transformation of many aspects
of the economy. For example, construction of roads and rails has been eased by
the continuous developments in technology in this sector. As such, many
developing nations have been privy to these technologies and have been crucial
in transferring it to other nations despite initial resistance being witnessed
(Hovhannisyan
& Keller, 2015). However, it
requires the collaboration of the national governments of the foreign countries
and the companies wishing to establish their branches. These technologies
foster the economic development of unfledged nations as well as the cohesion
between countries. Additionally, technology has also been seen as an integral
part of politics since many legislators have seen the impact that these
advancements have on campaigns especially in terms of information sharing. As
such, many legislators have allowed the penetration of these advanced
technologies into their countries to further help in government functions.
Global Peace Development
International
business fosters global peace through a myriad of ways. First, regional
cooperation among nations of the same continent has been a critical strategy in
ensuring inter-country peace. When two or more nations enter into bilateral
agreements, it is highly unlikely that they can ever result in conflicts. These
bilateral agreements allow people and organizations to cross the border and
establish businesses in the foreign land and create good interaction with the
residents of the host nation. This interaction has been essential in ensuring
that peace between countries in the same region is promoted. Besides, as noted
in research by Haddadi (2015), the formation of regional trades has ensured
that cross-border businesses have been uplifted which has been essential in
promoting civilizations.
Despite
international business being a peace agent, it faces some challenges in some
instance. For example, areas that have been war tone have left many
international companies in a fixated position since they do not have the
capacity of venturing into such areas irrespective of any sense of emerging
markets. Introducing businesses in these areas creates employment for many
individuals who often engage in civil wars due to economic problems such as
high unemployment rates. The elimination of economic issues is paramount to
ensuring that people live peacefully. This is an issue that international
businesses have been able to eliminate and foster peace.
Moreover,
the business sector has been perceived to be a prerequisite in the promotion of
stability and prosperity. This can be attained by promoting noble corporate
citizenry. However, establishing and promoting viable corporate citizenship is
a demanding and discouraging activity which requires consistence and
perseverance. Many international organizations
often develop approaches that reduce their contacts with hostile situations
especially to ensure delivery of goods and services is not maimed (Haddadi,
2015). Under many circumstances, existing businesses in the host nation as well
as other entities such as government agencies are highly likely to adapt these
risk-mitigation approaches and utilize them in ensuring the prevalence of peace
in society. Overall, trading countries are not expected to get into conflicts
with each other. Bilateral and multilateral trade agreements have to be honored
by the involved parties which means that they cannot go into war. As such,
peace prevails among these nations which helps in the promotion of global
peace.
Cultural Exchange
When businesses move into new territories beyond their constriction of
national boundaries, they are bound to introduce cultures of their origin
country to the host nation. An easy
example that can be used to illustrate this cultural exchange is the case of
internationally recognized restaurants. These restaurants introduce new cultures
in areas that they settle which sees many residents try to adapt to these
foreign practices. For instance, many Asian restaurants have introduced their
cuisines in America which have become widely accepted by citizens.
Additionally,
when organizations open up businesses in foreign lands, they send a few
representatives to ensure that the company takes off smoothly. Under such
circumstances, individuals who are sent to represent the firms have to adapt to
the new culture that they find in the host nation (Lu &
Fan, 2015). Moreover, when they leave
these nations and go back to their nations of origin, they introduce some of
the cultural practices that they learned. On the other hand, business cultures
are also exchanged when organizations go international. Different countries
embody varying business cultures. As such, the exchange of these cultures
remains imperative in ensuring that businesses can borrow practices that they
deem to be essential for them (Gardašević & Vapa-Tankosić, 2015). For example, business practices in Japan are
different from those in Canada and thus, businesses from each country can
borrow from each other to ensure that they maximize efficiency.
Enhancing Economic Growth in Developing Worlds
Business has been established as a major catalyst in economic
development of nations. This type of broad-based global business promote
economic growth is fundamental for long-term and sustainable development.
International businesses that are established in impoverished and emerging
markets help in creating opportunities for residents. This is attained by the
corporate social responsibility (CSR) that these international business bring
to the host nation as noted by Kolk (2016). CSR entails the developments that
are brought to the surrounding communities such as enhancement of road
networks, establishing foundations that pay school fees for bright students,
and engaging in other community development opportunities.
Furthermore,
economic development is brought by ensuring that marginalized persons have
access to market. In many instances, international businesses venture into
underdeveloped areas where availability of some goods and services is hard to
come by (Kolk, 2016). This plays a crucial role in ensuring that people can
access things that they could previously not attain. Similarly, the
collaboration between the private sector and national governments is
fundamental in spurring economic growth and development. Foreign organizations,
classified as private entities, do a great job in ensuring that they delegate
resources to marginalized areas where national governments had previously
failed to consider. Besides, these organizations help the government in finding
additional sources of finances. For instance, to establish a foreign company,
the host nation demands the inclusion of a certain amount of fee. Besides, when
many foreign organizations set up business, the host nation enjoys tax proceeds
which is essential in spurring the growth of the country.
Roles of Sustainable Development
Protection of Global Resources
As previously pointed out, sustainable development ensures that current
generation does not exhaust resources for future ones. Thus environmentally
sustainable development ensures that organizations or individuals exploit
available natural resources without risking their exhaustion for future
generations (Emas, 2015). For instance, before the discovery of electricity,
coal had been a major source of energy for several centuries. However, due to
the over-exploitation of coal by previous generations, this resource became
scarce. Luckily, at the time, electricity was discovered and became an
alternate source of energy. Currently, very few coal deposits have remained
which means that if electricity had not been developed, the current world would
be in shambles. Thus, there is the need to reserve such available resources to
ensure that the safety of the future has been guaranteed.
Additionally,
the essence of sustainable development is to secure a cohesive relationship
between nature and human activities. For instance, expansion of infrastructure
and urban planning should not be conducted in a manner that deprives future
generation of enough space to settle (Istenič, 2019). Land, as a natural resource, remains constant and as
such, its utilization must be managed properly to ensure that future
generations are not denied a place to settle as well as establish their
businesses. Thus, while infrastructural expansions are essential, sustainable
development necessitates that there should be consideration about the long-term
impacts that they will have on future generations.
Environmental Conservation
In addition to protecting global resources, sustainable development has
played another crucial role in environmental conservation. The interaction
between man and nature should exude a beneficial association. While there is
the need for further globalization and internationalization of businesses, it
must be conducted in a manner that does not harm the environment as proposed by
Cantiani et
al. (2016). Currently, a lot of
protocols and treaties have been drafted to ensure that nations abide by
certain regulations that bar them from producing high levels of pollutants. As
such, existing companies and those being established have to abide by these rules
which ensures that environmental protection is upheld.
Furthermore,
the phrase “going green” has become common among companies especially in the
manufacturing industry. This phrase has been used to ensure that companies
remain wary of their environment by avoiding unnecessary pollution. Pollution
has been a major cause of concern over the last centuries as a result of the
successive developments in the manufacturing industry. Companies have been
encouraged to take care of the environment to ensure that future generations
are not deprived various resources such as water and clean air (Gil, 2016).
Concurrently, the international community has been critical in campaigning for
companies to ensure that they remain conscious of the environment even in times
of expansions. This ensures that developments will also impact future
generations positively.
Conclusion and Recommendations
To
sum up, international business and sustainable development have played major
roles in the world. From the analysis presented in this discussion, it is
evident that international business and sustainable development play a major
role in the enhancement of technology and knowledge sharing, bringing global
peace, cultural exchange, fostering economic development, protection of resources,
and environmental conservation. Without the cohesion that has been brought by
international business and sustainable development, all these aspects that have
been mentioned above would not have been possible. The concept of sustainable
development links well with international business since they both strive
towards making the world more integrated and conducive to live at the moment
and in future.
Despite
the various roles that international business and sustainable development play,
there is the need to make a few amendments. For instance, while international
business has been crucial in cultural exchanges, it is essential that people
ensure that their culture does not fade away in the long run due to erosion by
foreign practices. Furthermore, sustainable development has been a key standard
for the preservation of global resources as well as environmental conservation.
However, some countries have failed to honor some of the treaties they signed
since there is no legal action that can be taken against them as noted by Gil
(2016). Therefore, it would be vital for these treaties to be legally binding
to ensure that countries involved remain devoted to the course. Besides, while
countries want to emancipate themselves from underdeveloped to developed nations
through pursuing economic development fostered by international business, they
must remain wary of the need to only concur with sustainable developments.
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