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a) Describe ONE social or cultural influence that managers should consider when conducting business with overseas clients - HSC - SSCE Business Studies - Question 23 - 2009 - Paper 1
Question 23
a) Describe ONE social or cultural influence that managers should consider when conducting business with overseas clients. b) Analyse the impact of TWO financial in... show full transcript
Worked Solution & Example Answer:a) Describe ONE social or cultural influence that managers should consider when conducting business with overseas clients - HSC - SSCE Business Studies - Question 23 - 2009 - Paper 1
Step 1
Describe ONE social or cultural influence that managers should consider when conducting business with overseas clients.
Answer
One significant social influence that managers should consider is the cultural communication style prevalent in the overseas market. Different cultures interpret communication differently; for example, in high-context cultures (such as Japan or China), much of the communication relies on implicit cues and the context surrounding the conversation. In contrast, low-context cultures (like the United States) prioritize direct and clear communication. Understanding these nuances can help managers avoid misunderstandings, establish trust, and navigate negotiations effectively.
Step 2
Analyse the impact of TWO financial influences on a business wishing to export.
Answer
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Foreign Exchange Rates: The fluctuations in foreign exchange rates can significantly impact the profitability of exporting goods. A stronger home currency relative to the foreign currency can decrease the exporter's competitive edge because their products may become more expensive for overseas clients. Conversely, a weaker home currency can enhance competitiveness but may lead to reduced profit margins.
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Access to Financing: The availability of financing options can greatly affect a business's ability to export. Companies may need to secure loans or credit to manage production costs and shipping expenses. If financial institutions are hesitant to lend, businesses may face cash flow issues which can hinder their ability to fulfill export contracts and maintain inventory.