Published on April 13th, 2018 | by Jelena D0
Intercultural Business Communications: World Economics
Companies worldwide have become increasingly affected by economic, political, and competitive pressures from companies in other countries. Although it is well known that the automobile, steel, textile, and electronic industries face worldwide competition, it may not be as well known that many small- and medium-sized firms also have to compete in world markets.
The United States maintained a substantial technological lead after World War II during the 1950s, 1960s, and the beginning of the 1970s. Today this competitive edge is gone, and the macroeconomy of the world affects the performance of U.S. industry. Many U.S. industries were not prepared for this change in the macroeconomy, and the U.S. government had to provide temporary protection for industries and negotiate with foreign firms to limit their exports to the United States. In addition, the Department of Justice relaxed antitrust rules, thus allowing more joint ventures.
When a particular industry is caught in the growing complexity of global economics, many smaller firms, regions, and communities may face adverse economic times. Although U.S. companies are facing intensive foreign competition, the groundwork has been laid to increase productivity, reduce capacity requirements, and increase flexibility, making the United States able to compete in the long run.
A successful domestic company learns and operates within the existing political situation. A company that moves into the international environment must learn how to manage and predict politics in other nations. In fact, some people are concerned that because of the size, wealth, resources, and knowledge of some multinational companies, the organization will become political bodies themselves. Interestingly, in many countries, the multinational firm exercises power that parallels that of the country’s government.
All in all it surprises many how powerful multinational firms can be in the world of economics. So ultimately do presidents and leaders of countries control their prospective countries or do multinational firms? That is a question that stands firm in today’s environment and leads to the prospective ideas that multinational companies may very well be an agent of change in the future.