Challenges of Operating a Business in a Global Economy

by Linda Ray, studioD Google

Even as a small business, you operate at some level in the global economy, and the fate of world economics may ultimately impact how you do business. While the world faces global environmental issues, your small piece of the environmental infrastructure plays a role. Foreign competition impacts local competitiveness, and security is a priority that challenges every business owner. To maintain your viability in the increasingly global marketplace, you must consider the challenges and how you will address them.

Compliance and Regulations

Whether you are a small business shipping homemade handbags through a website or a consulting firm offering your services to multinational corporations, you must understand and follow various rules and regulations that govern your goods and services. You must comply with the tax laws of different countries as well as statutory export regulations. Some countries have strict policies about the types of business practices allowed in their countries that often include human resource and pension restrictions and rules if you hire a foreign workforce.

Culture and Language

One of the advantages of a global economy is that more small businesses can compete competitively. However, few small businesses are prepared to handle the customer service calls from China, Vietnam and other emerging markets key to the success of a global competitor. If your sales are increasingly going overseas, you have to find ways to navigate the language barriers that may crop up in emails and phone calls. At the same time, cultural differences can play a big role in your success in the global market. For example, in China, the color red is a symbol of luck, while in other countries, it represents a warning sign. Religious and cultural boundaries must be understood to run effective marketing campaigns abroad.

Environmental Impact

Recycling is rapidly becoming a common practice in most U.S. companies as business leaders realize the impact their behavior has on global environmental issues. You may be challenged to incorporate successful recycling programs because they may be cost-prohibitive or just inconvenient. Energy-saving devices such as compact fluorescent light bulbs make a dent in world energy consumption, but they may not be viable for your office. Challenges abound for developers looking to build new factories or office space. Food, energy and transportation companies all face environmental pressures to use fewer natural resources and offer products made with recyclable materials.

Technology and Communication

One of the biggest challenges facing globally competitive marketplaces is the communication issues that crop up when technology doesn’t keep up in every sector. When your company relies on disparate systems that can’t communicate with each other, your bookkeeping gets bogged down, and orders slow or cease. Access to vital information may be compromised when technological systems are not standardized. You’ve got to rely on translations and reports from foreign staff members instead of using a centralized system when the technology you rely on to run your business isn’t compatible with the technology used by your buyers, foreign offices and global sales force.

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