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International Business Transactions: Major Barriers and Concerns


Over the past years, International Business Transactions have continued to grow as a result of the rapid expansion in technology. International business transaction is basically trade that is carried out among nations in order to expand and diversify their source of sales and obtain more resources. These business transactions are often complex as they entail recognizing and organizing many issues such tax and regulatory requirements. The objective of this paper is to address the major barriers and concerns that are realized in the process of International Business Transactions and how to overcome them. In order to achieve this, the paper first addresses the major barriers and concerns in International Business Transactions. Secondly, the paper discusses how to overcome these barriers and concerns. Finally, the conclusion section provides a review of the areas tackled by this research paper.

Major barriers and concerns

At one point or another, every business transaction has to face challenges, some of which are often risky (Shippery, 2003, p. 7). There is a wide range of business challenges that have to be considered in order to survive during transactions. International Business Transactions are normally affected by such issues such as terrorism, political situations and national laws. Language has always been a barrier in the international trade in cases where business people do not understand a given language (Shell , 2006, p. 5). An example is where a business person from America engages in business with another trader from say, Afghanistan. The Afghanistan could be faced with a handicap of not understanding the English language. Business interactions become difficult as the two business people cannot communicate with one another. It would be difficult to trade with a country which has political differences among the politicians. Cultural factors have also been a thereat to international trade because the transactions involves foreign interactions among different countries. Cultures are normally associated with how people of a given region or country behave. These behaviors therefore influence perceptions by other people or countries. The effects are realized on how products from other countries are viewed by others. Transactions become difficult especially if they are negative perceptions like having unstable governments and economies. Some countries would not prefer to trade with other countries incase there are negative issues associated with them. For instance, if the Germany government was involved in a scandal like corruption, other countries may find it difficult to carry out any business transactions with the country. In such a case, businesses in German would lose a great deal of its capital investment and future earnings. Apart from the other challenges, there are major risks which are common in the business transactions. These risks include damaging of goods, terrorism, exchange rates, existing National laws and labor conditions. Exchange rates have always proved to be a big challenge in business especially for those in the export and import sector (Shippery, 2003, p. 9). Companies or businesses that are involved in business should always consider exchange rates before making any transactions. Exchange rates among countries are always varied and therefore call for verifications in order to avoid risks. These rates affect profits in terms of economic stability of a country. Currencies normally fluctuate time after time and this greatly affects transactions if they are not considered. In terms of labor an international transaction may be affected if labor codes of a country are not followed. Those involved in international trade should be ready to adhere to labor conditions of the countries they trade with. These labor conditions vary from country to country and so business people should not assume them while in transactions. Labor conditions are applicable in business because they determine an expected workforce by a given country (Shell, 2006, p. 24). National laws have adverse effect on international business they regulate transactions that take place in a country.These laws include taxations and licensing of business transactions. Business people often fear taxation because it is a mandatory levy in the international trade. Taxation is a form of revenue for a country and therefore there are always regulations that ensure that the laws are adhered to (Shippery, 2003, p. 7). Failure to follow the laws may lead to consequences which are not favorable to any business transaction. It is because of the fear that makes some business people to engage in smuggling activities. Some business people use smuggling as a short cut of escaping taxations and import duties. By smuggling, an international trade can be at risk because it might be challenged by national laws of a country. There is a risk for goods which are normally damaged during their transportation from one country to another. Depending on the mode of transportation used, an international trade can incur lose of products during transportation. Terrorism is a big threat which affects business transactions. In cases of terrorism, companies or countries normally shy away from countries which involved in dangerous attacks. For security reasons, those in international businesses should consider their safety before interacting with other nations. It would be risky to trade with a country which has a history of terrorism. Terrorist issues can affect business transactions of a country as other nations may fear for their security.

How to overcome barriers and concerns

In order to avoid terrorism attacks, investigations should always be conducted before an international business transaction. Security measures can also be used in cases of business transactions so as to avoid any risks. Before transacting in an international business, it is advisable to get updates concerning exchange rates of different countries. One should be familiar enough with the exchange rates so as to avoid any challenge (Shell, 2003, p. 5). This can be achieved by reading international newspapers or watching international news. During transportation of goods, proper mode of transportation should be used to avoid any damages. For instance, when transporting perishable goods like flowers it is advisable to transport them by air.It would be unwise to transport flowers by sea because they shall have withered before reaching their destination. Regarding national laws, business people should carry out proper research methods for them to avoid any challenges. National laws may include property protection which requires a buyer to understand the rights of a seller concerning a particular product. A buyer cannot use or acquire goods of a seller before paying for them. This fact however depends on national policies for acquiring property in a given country (Shippery, 2006, p. 37).


Before engaging in any international business transaction, one should always carry out intensive research to avoid risks. Research may include getting enough information about a given country. Risks are barriers in international trade that should be avoided at all costs.


Shell, R. (2006). Bargaining for Advantage: Negotiation Strategies for Reasonable People (2nd Edition). London: Penguin Books.

Shippery, K. (2003). A Short Course in International Contracts: Drafting the International Sales Contract for Attorneys and Non-Attorneys. Madison, Wisconsin: World Trade Press


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