Global Business Environment

The global business environment can be defined as the environment in different sovereign countries, with factors exogenous to the home environment of the organization, influencing decision making on resource use and capabilities. The global business environment can be classified into the external environment and the internal environment (This book will focus primarily on the external environment.) The external environment includes the social, political, economic, regulatory, tax, cultural, legal, and technological environments.

To function effectively and efficiently, companies operating internationally must understand the social environment of the host country they are operating in. Today there are thousands of MNCs which operate in many parts of the globe. Such companies should acquaint themselves with the language and culture of the country in which they are operating.