Issues in Global Business Essay Example | Topics and Well Written Essays - 2000 words

Issues in Global Business - Essay ExampleModern franchising can perhaps best be thought of as a method of organization that combines adult and small rail line into a single administrative unit. In a license system one large firm, often called the parent company, grants or sells the right to distribute its products or use its trade name and processes to a number of smaller firms2.The use of contracts in franchising withal varies from the standard approaches used in national operations. Because of the importance of consistency across outlets (both franchised and corporate-owned), the primary research focus of franchising has been on understanding how best to ensure that the franchisee delivers the business format service as specified by the franchisor. Typically, it is believed that this can be achieved through well-designed contract mechanisms such as fees and royalties. However, contracts become more difficult to admonisher and enforce in the international environment as a resu lt of time and distance3. The use of standard contracts that is common in the domestic setting is little common internationally where contracts are usually modified for host country laws and cultural differences. Even the use of a contract often takes on a different meaning in the diverse cultural and legal environments of international business4. (Table 1).Finally, the importance of the foreign franchisee to overall operations relative to that of most individual domestic franchisees is often greater as well. First, in international franchising, the foreign franchisees are often major multinational firms rather than small, independent entrepreneurs. This may be a result of greater awareness by the larger host country firms regarding the franchisors business concept5. Such firms also are attractive franchisees due to their muscular financial position and longevity in business making them less risky partners in an unfamiliar business environment. In Japan, Burger Kings franchise par tner is Japan Tobacco, one of