International Business paper Essay Example | Topics and Well Written Essays - 2250 words

International Business paper - Essay Example Australian newspapers have similarly been blazing on about the changes in the economic policy and big business. The Age reported on February 25th about the Australian clothing company Pacific Brands moving its manufacturing facilities to China (Draper 2009). This has been in line with moves by a range of such businesses in the country deciding to place their facilities in Asia. Brands espoused by the company have been seen to be quintessentially Australian with a large following. This decision has been seen with a reflection of how many other local manufacturers in the food industry and others have slowly been taken over by foreign based companies. However, The Age reports that Pacific Brands, which retains Australian ownership, stresses that it remains very much Australian. Despite its manufacturing facilities now located in Asia and the subsequent layoff of workers in the country, the company's top management is quick to point out that the idea generation and organization will always remain Australian and thus it will not lose its focus towards the country (Draper 2009). In another article, The Canberra Times comments on the possible measures being contemplated by the Government to limit free trade by ranking up tariffs and subsidies (Barnett 2009). This is seen as a possible deterrent to the adverse effects of the international financial crisis and that it would help local businesses to stand up. Globalization is seen by some circles to be blamed for the recession that is leading to layoffs and a drop in production. It is believed that such restrictive measures can be used, despite remaining WTO legal to help the Australian economy. However it is argued that it could potentially be devastating since the country now has a big population and in recent years has been witnessing floods in rural areas and bush fires along with other troubles. It requires the elements of free trade to be present so that cheap imports can be brought in to meet local needs as the local economy may not be as self sufficient as is predicted (Barnett 2009). Question 1 Both these articles can be said to fall into the study of international business. The article by The Age speaks of the move by one Australian company that is typical of the trend being adopted by companies worldwide to find cheaper labor costs and costs of manufacturing to get higher profit margins. This shows the emergence of the global economy that we are witnessing today and the worldwide marketplace such that it is viable for businesses to shift their facilities to different parts of the world as comparative advantage shifts (Hirst 2002). It further has implications for local employment and that in the area to which the company shifts where the company will have to adapt to the local culture and practices in the case of its workforce there. It may further have to deal with exchange rate changes, a possible reliance on hedging techniques and be involved in the foreign exchange market which further links the company with others around the world. The other one by The Canberra Times talks about the Australian government's response to a global financial crisis and the ensuing recession. This is relevant to international bus