Question

What major factors are driving the internationalization of business? List and describe the major challenges to the development of global systems. Explain why some firms have not planned for the development of internationalization systems.

Answer 1

The correct answer to this open question is the following.

Although the question does not provide any options or particular references, we can say that factors that are driving the internationalization of business are the necessity of countries to establish free trade agreements to compete in the international arena, the developing of cultural factors that penetrate to other countries creating similarities and affinities, the openness of countries that in the past followed protectionist trade rules, and the endless possibilities that new communication technologies are creating to stay connected worldwide.

On the other hand, the major challenges to the development of global systems are cultural restrictions in traditional countries that try to preserve their history, culture, customs, and traditions. And the other big factor could be the political stability of the country that maybe does not have the proper political conditions to be attractive to foreign investment.

Some firms have not planned for the development of internationalization systems because their owners still have the traditional approach of only competing in their former country, not taking the calculated risk of looking abroad for the many opportunities that are out there.