International business climate
International business climate
There are various factors which are used in measuring the business climate of a nation and also globally. Some of these factors are energy costs, business income tax levels, market size, life’s quality, infrastructure, incentives, workforce availability and others. Globally, the investors are known to monitor the share prices of most business corporations in order to make an informed business on the companies or the market to invest in. According to Guy (2009)and Katsioloudes&Hadjidakis, (2007), business climate globally has been quite harsh on the investors.
Some of the business rules in most countries are not conducive for the business climate. These are rules that are quite unstable, disloyal and the corruption is completely out of hand. During crisis, investors usually sell the shares that belong to the entire business in order to avoid losses. This hence affects the entire business adversely. According to the literature review that has been conducted on the international business climate, most multinational companies enjoy relationships and hence have merged in order to ensure competition. Most countries have a vast set of regulations and laws that do affect business operations.
As Kirpalani (p. 114) asserts a country like the UK has very active monopoly policies. The monopoly commission plays a very vital role as far as mergers and takeovers are concerned. The UK law does permit the mergers commission and monopolies to investigate, block and delay all the proposed mergers that are not of public interest. Social factors also have a major influence on global business climate. Communities on global business climate are very keen on the way the company does utilize their income in order to support local people as far as destination economies are concerned.
Their main interest is to see the local people engage in the foreign companies. They do expect all the multinational companies to be involved in some social activities for example helping the poor people. International business climate are also involved in conserving the environment as every business is going green. There are various government policies that do affect business activities. To ensure that there are low levels of pollution, governments should also establish those policies for example emissions standards.
The political environment has set various laws and has aimed at reducing the corporate taxes in order to encourage some of the foreign investments in Africa and Asia (Scaffer et al, 2008). Most of the economies in the global international climate have also invested in effective communication facilities to enable business transactions. If we have to involve the issue of Switzerland in the international business climate we acknowledge the fact that just as the international climate has incorporated economic, cultural, legal as well as political issues so has Switzerland.
One of the reasons that make Switzerland cope and suit in the international business climate is the fact that its legal climate is quite transparent and has regulations that are not discriminative. It has a legal system that governs the local and international business activities and stops anti- competitive behavior. Its political climate is effective and very stable. If we are to compare the international climate with that of Switzerland, it is patent that Switzerland’s international climate is better. Therefore, with that in mind there ought to be some recommendations for the international business climate.
Switzerland happens to be one of the leading countries globally when it comes to the IT infrastructure. Some of the factors that do work in its favor comprise of issues like security, telecoms competition and government support. The official currency of Switzerland has remained to be Swiss Franc (CHF). It is one of the currencies that has always been used in the country and is quite strong as well as stable over many years. It is convertible and is not controlled by the government. It also has one of the best banking sectors in Switzerland and one of the biggest commercial bank. The communication systems in Swiss are vast and quite modern.
Its domestic system comprises of an extensive cable as well as a microwave network. It has the best reputation when it comes to transportation as it has the most efficient and extensive public transportation globally. Its economy is the best and all the Swiss citizens are entitled to education. For those who are financially deprived, the government is responsible for paying their meals, transportation, books and other amenities. The citizens are free from other foreign country and are only subject to the laws of their country. Since it is not part of EU and UN, the government is also free from the outside regulations.
Its tri level system of politics is effective since the country and state bodies are usually granted high control levels. The collegial system of Federal council contributes highly to its political stability. Switzerland economy is so effective and has mounted to be the global leading public and medical health infrastructures. It tops the list of all European countries despite the fact it is not a member of EU. As compared to the international business climate, culturally, there main priority has been protection of the environment. Their regulation standards are quite high and efficient making the industry grow at high rates.
It is one of the vast and major exporters of both goods and services and a big supplier within Europe after Japan and USA. The climate of Switzerland is definitely what can be termed as pro business. Just like the international climate, it has also adopted a legislative act that promotes economic attractiveness for all businesses. It has created a wonderful appealing economy for business. They also have an advantage of a having high standards of production. Switzerland was ranked by the World Economic Global Competitiveness Report as the global’s most competitive economy (Ina, 2010).
It has a sound environment, infrastructure, efficient market and a high technological innovation. The major laws that govern the foreign investment are the Swiss Code of obligations, Securities Law, Cartel Law and Lex Friedrich. Recommendations for International Business climate The international business climate is yet to be what can be termed as perfect. It is therefore the duty of each nation to make sure that everything is running smoothly. In most third world countries, the investors are always at risk. There ought to be firm laws governing each country and protecting businesses from being affected by inflation.
Just like in Switzerland, nations need to improve on their efficiency, security and laws in order to have an appealing business climate. The political climate should also be enhanced into one that can accommodate business effectively. It is the duty of the legal system to make sure all social evils are cubed for example corruption in order for businesses to survive. There should be a strong relationship with other foreign countries in order for international trade to survive. Other laws should be introduced whose measures should include tax breaks as well as investment credits for the small companies.
There should be strict safety environmental regulations and the government should also offer subsidies and a wonderful climate for businesses. Conclusion Though the international business climate is so much like that of Switzerland, Switzerland has one of the best business climates that are quite appealing. The international business climate should emulate Switzerland and aim to make their climate appealing. This can be done through adoption of laws that protect businesses, unification of all those who are concerned and eradication of all social evils like corruption.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 26 September 2016
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