Introduction
The Macroeconomics as seen in an international context affects the business decisions and strategies of not only the governments but also the private firms operating in international business arena. The macroeconomic forces present an environmental background to the International business players and the way it affects them is discussed below.
Discussion
Macroeconomic forces affect us at all levels on a day to day basis. For instance the current oil prices reduction internationally has affected many economies in an adverse manner, while a few others like India are at an advantage. This augurs well for the International businesses operating from India. There are numerous macroeconomic factors such as employment and productivity affect the overall business environment of a country. In the International business terms, this extends to the macroeconomic forces of one country interacting with those of another to produce a unique International business environment for the global businesses to operate and affect their policies and strategies.
Macroeconomics essentially has to do with national outputs produced by its citizens. In International trade between countries, in many situations one country would want to exchange its output with another country and this lays the basis for trade surpluses or deficits which affect the business policies of one country to the businesses of another country.
In this context, it is important to point out the observation as to the balance of payments which are the key accounts in the area of International macroeconomics. This is essentially a statement of the economic activity of a nation and affects International trade and investments in a country by both government and private multinational firms.
Scholars have suggested that Macro economic conditions affect and influence the business decisions which pertain to the entry into, maintenance and expansion of business markets at not only regional and national levels but also International level. The macroeconomic conditions at a global level such as International interest rates, trade deficits, savings and unemployment rates, foreign debt ratios, consumer and industrial spending ratios as well as public sector expenditure ratios affect the way the International Business environment is shaped and the business conducted.
In an international business context, macroeconomic productivity of country which is directly associated with the labour rates in a given country form an important background scenario affecting the International business strategies. Quite notably, the strategic alliances with multinational customers or sometimes even with the competitors help manage the changing macro economic environment and vice versa .
International business structures a competitive macro economic environment which characterizes an integrated macroeconomic strategy . The integrated strategy combines the competitive efforts to seek superior market performance and non market efforts that help build the International Business Environment. The Macroeconomic forces operate as per certain conceptual frameworks such as the bargaining theory, which provide a basis for the outcomes of international trade between various International businesses and their proclivity and stakes in the business.
In International Business, the economic interests of various nations affect their bargaining positions, it is important to see the interest groups and their role in moulding the International business scenario is important .
For International Business to be effective, efficient management of finance, personnel, product development, marketing and communication has to be efficient. All these factors at international level are affected by macroeconomic factors such as labour rates, balance of payment or trade surpluses and the interest rates and inflation. Since the need for globalization of business is increasing, so is the need for better understanding of macroeconomic forces .
Conclusion
The above discussion suggests that the Macroeconomic forces lay the foundation for the international businesses to operate on. It is the macro economic forces such as national output, productivity and inflation as well as trade balances which determine the political and economic policies and financial policies of a country, an International business is operating in. Thus a thorough understanding as well as monitoring of global macroeconomic conditions is vital for International Business success.
Works Cited
Baron, David P. "Integrated Strategy, Trade Policy and Global Competition." California Management Review (1997): 145-170. Web. 2 January 2016. <http://www.citi.columbia.edu/B8210/read3/Baron.pdf>.
Geiserbach, Niki. "The Impact of International Business on the Global Economy." Business Intelligence Journal (2010): 119-129. Web. 2 January 2016. <http://www.saycocorporativo.com/saycouk/bij/journal/vol3no2/article_8.pdf>.
Huszagh, Sandra M., Frederick W. Huszagh and Gwen F. Hanks. "Macroeconomic Conditions and International Marketing Management." International Marketing Review 9.1 (1992). Web. 2 January 2016. <http://www.emeraldinsight.com/doi/abs/10.1108/02651339210009243>.
Moss, David. A Concise Guide to Macroeconomics, Second Edition: What Managers, Executives, and Students Need to Know. Harvard Business Review Press, 2014. Web. 2 January 2016. <https://books.google.co.in/books?id=sF4ZAwAAQBAJ&printsec=frontcover&dq=David+A.+Moss+%282014%29+A+Concise+Guide+to+Macro+Economics,+IInd+Edition+Harvard+Business+Publishing&hl=en&sa=X&ved=0ahUKEwj_1eXGidbKAhWTBI4KHYWMDXsQ6AEIGzAA#v=onepage&q=David%20A.%2>.
