Main Difference Between Domestic and International Business

Main Difference Between Domestic and international Business are as follows :



 

S.No International Business Domestic Business
1. It is extension of Domestic Business and Marketing Principles remain same. The Domestic Business Follow the marketing Principles
2. Difference is customs, cultural factors No such difference. In a large countries languages likeIndia, we have many languages.
3. Conduct and selling procedure changes Selling Procedures remain unaltered
4. Working environment and management practices change to suit local conditions. No such changes are necessary
5. Will have to face restrictions in trade practices, licenses and government rules. These have little or no impact on Domestic trade.
6. Long Distances and hence more transaction time. Short Distances, quick business is possible.
7. Currency, interest rates, taxation, inflation and economy have impact on trade. Currency, interest rates, taxation, inflation and economy have little or no impact on Domestic Trade.
8. MNC’s have perfected principles, procedures and practices at international level No such experience or exposure.
9. MNCs take advantage of location economies wherever cheaper resources available. No such advantage once plant is built it cannot be easily shifted.
10. Large companies enjoy benefits of experience curve It is possible to get this benefit through collaborators.
11. High Volume cost advantage. Cost Advantage by automation, new methods etc.
12. Global Standardization No such advantage
13. Global business seeks to create new values and global brand image. No such advantage
14. Can Shift production bases to different countries whenever there are problems in taxes or markets No such advantage and get competition from some spurious or SSI Unit who get patronage of Government.

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International Business

The Technology era since the last two decades is bringing a fundamental shift in business around the globe. The national economies are opening up and allowing cross border trade and investments. Technologies are helping to reduce distances and improve business.

Business is a medium of growth for any country. When a business grows internationally country’s economy also grows.

International Business is a combination of two words :
INTERNATIONAL + BUSINESS = INTERNATIONAL BUSINESS

“International Business is doing business across national political boundaries”. The business transactions may be importing, exporting, and in the form of goods in any areas of transactions like transfer of process knowledge, managerial inputs, capital investments, and consultancy.

In other words – when the business of a country that type of business is called international business. It is concerned with the movement of goods and services, capital technology, raw material, manpower, etc.

International business also includes :

  • Cross border transaction in Intellectual property rights for e.g. patents, trademarks copyrighting.
  • Investment in physical and financial assets in a foreign country.
  • Contract manufacturing or assembly of goods.
  • Buying and selling in foreign countries through imports and exports.
  • Establishment of warehousing and distribution system.

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Scope of Employee Welfare

The scope of employee Welfare cannot be limited, since it differs according to social customs and the degree of industrialization indifferent countries and at different times. They have to be elastic and flexible enough to suit the conditions of the workers, and to include all the essential prerequisites of life and the minimum basic amenities. The laws of every country highlight directions to specific application to the working class, the necessity of securing just and humane conditions of work, for them. However, what these conditions actually imply cannot be specified in rigid terms for all times and situations.

Thus, the subject of Labour Welfare is fairly wide and is not limited to anyone country, region or industry. Writers and institutions have described its scope in different ways and from different angles. The line of demarcation cannot be very precise. But what should be common is that a welfare measure should enhance the working and living conditions of the workers and their families and make their lives better worth living. In other words, Labour Welfare policies should “Enable workers to live a richer and more satisfactory life”.

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Objectives of Employee Welfare

Labour Welfare aims at the whole development of the person of the working class. The Labour Welfare Policies of any organization should keep in mind the following objectives:

  1. To increase the standard of living of the. Working class: The labourer is more prone to exploitation from the capitalists if there is no standardized way of looking after their welfare.
  2.  To make the management feel the employees are satisfied about the work and working conditions.
  3. To reduce the labour problems in the orgnisaton: There are various problems affecting the workers, problems like absenteeism, turnover ratio, indebtedness, alcoholism, etc., which make the labourer further weak both physically and psychologically. Labour Welfare looks forward to helping the labourer to overcome these problems.
  4.  To recognize human values Every person has his own personality and needs to be recognized and developed. It is in the hands of the management to shape them and help them grow. The management employs various methods to recognize each one’s worth as an individual and as an asset to the organization.
  5.  Labour Welfare helps to foster a sense of responsibiJjty in the industry: A person works both in a group and as an individual. If the person is given responsibility he will act better or else he will be only a slave to the direction of the superiors and will not show any initiative to prove his worth,
  6. Labour Welfare improves industrial relations and reduces industrial disputes: Industrial dispute in any industry is a sign of unsatisfied employees. Labour Welfare measures act as a preventive tool to most of these disputes.
  7. To retain the employees There should be fixed policies: This calls in to prepare the policies, to conduct different training programmes, to have various motivational schemes, to create interest in the job. The employees who feel secure in an organisation, backed by fixed welfare policies have less chance of looking for a job elsewhere.
  8. To show up their positive mind in the work: Positive mind refers to the development of one’s attitudes. This is to change the negative attitude into positive.
  9. To influence over other employees: This means Labour Welfare helps to change one’s personality – presentation skills, communication skills, inter-personal relationships, etc. This is best achieved when their morale is kept high by the different welfare schemes.
  10. To increase the bargaining power of the employees: Bargaining means to systematically extract something from the opponent. The better bargaining power, the better influence on the opponent. Labour welfare measures like formation of works committee, worker’s participation, Trade Union, etc., will surely help them to have better bargaining power.

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Non Statutory Welfare Schemes

Many Non statutory welfare schemes may include the following schemes:

  1. Personal Health Care (Regular medical check-ups): Many businesses have facilities for comprehensive safety inspections
  2. Flexi-time: The primary purpose of the flextime program is to provide workers with the ability to work with flexible work schedules. Flexible work schedules are developed by employees and accepted by management to meet business obligations while meeting personal life needs of employees.
  3. Employee support programs: Different assistant programs are structured such as external counseling facilities so that employees or members of their immediate families can get help on various issues.
  4. Harassment Policy: To protect an employee from harassment of any sort, instructions are given for disciplinary action and also for the protection of the employee who has been grieved.
  5. Maternity & Adoption Leave: Workers can take maternity leaves or leaves for adoption. Various businesses have adopted parental leave programs.
  6. Medi-claim insurance plan: This insurance program offers sufficient medical coverage to workers for hospitalization costs due to sickness, illness or accident or pregnancy.
  7. Employee referral scheme: Worker referral scheme is introduced in many organizations to allow workers to refer friends and relatives to the company for jobs.

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Statutory Welfare Schemes

The statutory welfare schemes include the following provisions:

  1. Drinking Water: At all the working places safe hygienic drinking water should be provided.
  2. Facilities for sitting: In every organization, especially factories, suitable seating arrangements are to be provided.
  3. First aid appliances: First aid appliances are to be provided and should be readily assessable so that in case of any minor accident initial medication can be provided to the needed employee.
  4. Latrines and Urinals: A sufficient number of latrines and urinals are to be provided in the office and factory premises and are also to be maintained in a neat and clean condition.
  5. Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to provide hygienic and nutritious food to the employees.
  6. Spittoons: In every work place, such as ware houses, store places, in the dock area and office premises spittoons are to be provided in convenient places and same are to be maintained in a hygienic condition.
  7. Lighting: Proper and sufficient lights are to be provided for employees so that they can work safely during the night shifts.
  8. Washing places: Adequate washing places such as bathrooms, wash basins with tap and tap on the stand pipe are provided in the port area in the vicinity of the work places.
  9. Changing rooms: Adequate changing rooms are to be provided for workers to change their cloth in the factory area and office premises. Adequate lockers are also provided to the workers to keep their clothes and belongings.
  10. Rest rooms: Adequate numbers of restrooms are provided to the workers with provisions of water supply, wash basins, toilets, bathrooms, etc.

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Employee Welfare – Its Benefits and Principles

The Employee Welfare describes “efforts to provide good work-life at the workplace” “Employee welfare is a descriptive concept that encompasses different programs, incentives, and facilities that workers & employers are provided. The employer makes life worth living for workers through such generous fringe benefits.

Welfare includes all that is done to ensure employee comfort and improvement and that goes beyond wages. Social welfare contributes to maintaining employee morality and motivation so that employees can stay longer. The social welfare acts should not only have to be political but in every way. Employee welfare includes monitoring work conditions, building industrial harmony for workers and their families via health infrastructure, industrial relations, disease insurance, and accidents and unemployment.

Employee benefits encompass all of the employer’s acts aimed at delivering such facilities and services to workers, aside from compensation or wages.

Performance, safety, commitment, and happy labor force for the company are the underlying reasoning behind delivering welfare schemes. The goal of providing these facilities is to improve their working lives and to increase their living standards.

This activity comes either through a law formed by the State or through a local tradition or through a collective agreement or at the initiative of the employer:

  • To make philanthropic and paternalistic sensations known.
  • To win the loyalty of the employee and to increase his moral standards.
  • Fight against socialist ideas and unionism.
  • Strengthening secure jobs, reducing labor income and absenteeism.
  • Developing workplace performance and productivity.
  • Save yourself from high surplus taxes.
  • Goodwill and public relations enhancement.
  • Reducing the possibility of further government interference.
  • To increasing the efficacy of recruitment (because these incentives contribute to the work appeal).

Benefits of Employee Welfare

The major benefits of welfare can be summarized as follows:

  • Provide staff with improved physical and mental health and foster a safe working atmosphere.
  • Facilities such as accommodation, medical care, and schooling and leisure facilities for the families of staff help raise their living conditions. It allows staff to concentrate more on work and thereby increase productivity.
  • By having healthcare services, workers provide a stable workforce. Workers are deeply involved in their roles and work with a sense of engagement.
  • The welfare measures of employees increase organizational productivity and promote sound industrial relations, maintaining industrial peace.
  • The welfare policies are raising the social evils prevalent among work such as drug abuse, etc.

Principles of Employee Welfare Schemes:

In general, the principles to be followed in establishing a welfare service for employees are:

  • The service should meet the workers’ real needs. This means that the manager must first determine with active involvement by the employees what the true needs of the employee are.
  • A cafeteria will be used to manage the operation. Benefits are significantly different due to their variations in sex, age, marital status, the number of children, the nature of the job, and the amount of wages for workers. This is known as the cafeteria Approach. The value method is individualized under such an approach, though procedures and administration can be challenging.
  • The employer should not take a caring position.
  • The cost and funding of the operation should be measured in a reasonable manner.
  • A periodic review of the service should be carried out, and input should be received in a timely manner.

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Human Resource Management

This article is on HRM or Human Resource Management in an Organization. Employees are the organization’s main assets. HRM or Human Resource Management focuses on hiring, training, managing, analyzing performance appraisal, dispute settlement or grievance handling, and giving direction to the employees of the organization. Human Resource Management role is to tackle grievances related to the employees such as compensation, recruiting, performance appraisal, growth of organizations, welfare, benefits, engagement of staff, communication, administration, training, and retention. HRM also helps to shape the community and climate of individuals and of the workplace.

Good or Efficient HRM

Good HRM or Human Resource Management allows employees to perform efficiently and productively for the success of the organization and to achieving the goals and objectives of the organization. It is expected that HRM will bring value to employee strategic efficiency and that employee services will affect the company in tangible ways. HRM’s new role involves strategic direction and measurements for proving value. HRM contributes to organizational development by attaining optimum efficiency.

Duties of HRM

The duties of human resources administration shall be as follows:

Human Resource Planning

Human Resource Planning is known as the method of predicting the potential demand and supply of an enterprise in the right number for the right category of people.

Job Analysis

Job Analysis is the method of researching and collecting knowledge about the activities and obligations of a specific work. Job analysis includes job specifications and job description.

Recruitment

Recruitment is the method of identifying and recruiting qualified job applicants. The cycle starts as new hires are found and finish as they submit their applications. The outcome is a pool of applicants who selects new employees from.

Selection

Selection is the method of distinguishing between candidates in order to classify (and hire) those who are more likely to succeed in a job.

Placement

Placement is known as allocating people to jobs. This is an employee’s promotion or reassignment to a new position or another position.

Training and development

Training is provided to enhance the current or potential performance of employees through improving the capacity of an employee to succeed by training, usually through modifying the attitude of the employee or improving knowledge, working attitude, and skills. Need for Training and Development (T&D) defined by the performance deficiency of the employee, measured as follows:

Training Need = Standard performance-Actual performance

Remuneration

Compensation that an employee receives for his or her work and targets achieved for the growth of the organization.

Motivation

Motivation begins by appreciating employees to perform well. It can be in the form of monetary and nonmonetary benefits.

Participative management

Employees’ participation can be taken widely to include all terms of the interaction of employees and their superiors in the decision-making process, ranging from knowledge exchange, meetings, decisions, and agreements to more institutionalized ways such as the involvement of staff on management boards or supervisory boards.

Communication

Communication is the Information flow in the organization. This can be a transfer of information through HR and various departments. Communication is necessary for the effective working of the organization.

Safety and health

The company has to take measures for the safety of its employees. The company has to provide safety equipment and materials for the employees working in a risk condition.  The HRM is focused on healthier jobs and health care to ensure better health employees.

Welfare

The Employee Welfare describes “efforts to provide good work-life at the workplace” “Employee welfare is a descriptive concept that encompasses different programs, incentives, and facilities that workers & employers are provided. The employer makes life worth living for workers through such generous fringe benefits.

Transfer

Transfer entails a shift in an employee’s job (accompanied by a shift in the place of work) without adjusting the duties or compensation.

Separations

Employers are separated by lay-offs, resignations, and dismissals.

Employee Relations

Employee relations is concerned with the processes, rules, and procedures that trade unions and employers use to establish the compensation for contribution and other employment conditions, to safeguard the right of workers and their employers and to control how employers handle their workers.

Disputes and their settlement

Labor disputes are any disputes or discrepancies between employers and employees.

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Define : Grievance

Defining a grievance is very difficult. However, personnel experts have tried to differentiate between dissatisfaction, complaint, and grievance. In general, dissatisfaction in any form declared orally between employees is known as a complaint. A grievance is often related to work and is reported to the management’s attention. Often this meaning is changed to include the fact that a complaint should be in writing and not orally communicated.

grievance

In a broader sense, some organizations understand the word grievance; they insist that a complaint should be processed through normal channels of the grievance procedure. Consequently, the term grievance has been described differently by various authorities and authors. For example, Dale Yoder defines it as “a written complaint lodged by an employee and alleging unfair treatment.” And Keith Davis defines it as “any actual or perceived feeling of personal injustice that an employee has in relation to his employment relationship.”

According to Jucius, “a grievance is any dissatisfaction expressed or not, valid or not valid, arising from anything related to the organization that an employee believes or even feels unfair.” Pigors and Myers identified that terms – dissatisfaction, grievance, and complaint – clearly indicate the type and level of dissatisfaction. Dissatisfaction is, they say, anything that disturbs an employee, whether he expresses it in words or not. A complaint is a spoken or written dissatisfaction that is brought to the attention of representatives of the management or the trade union.

A grievance is simply a complaint that can be ignored, over-ridden or, dismissed without consideration; and the employee feels an injustice has been done, especially when the complaint was submitted in writing to a manager or to a trade union official. Beach has described a grievance as “any frustration or injustice feeling related to work and is brought for attention of management.” Often a grievance is characterized as “Anything an employee thinks or feels wrong and is typically followed by an aggressively disturbing feeling.” It (grievance) is usually more formal than a complaint in character.

It can be valid and must grow out of something connected with the operations or policies of companies. This may have an explanation or modification of the labor contract provisions. According to International Labor Organization (ILO) grievance is “a complaint by one or more workers regarding wages, allowances, working conditions and the interpretation of service-related issues, covering areas such as overtime, transfer, leave, promotion, job assignment, seniority, and termination of service.”

On an analysis of these different definitions, it may be noted that “Grievance” is a word that covers dissatisfaction and has one or more characteristics as follows:

  • It may be explicitly reported or unvoiced by an employer;
  • Could be either written or verbal;
  • It may be valid and legitimate, false or altogether false, or ridiculous, and
  • It may come from something relevant to the company or the job In other words, grievances are feelings, sometimes real, sometimes imagined, that an employee may have in relation to his situation in employment. Whenever there’s some tension among workers, it’s bound to lead to chaos that can very adversely affect management interests.

Grievances typically give rise to unhappiness, anger, disappointment, job indifference, poor morale; and eventually contribute to worker inefficiency and low productivity. Therefore, a personal administrator will see to it that complaints are remedied as soon as possible, dropping which can shake the entire edifice of the organization. He needs to learn and understand the reasons behind complaints, and how they can be addressed. He will assist the foreman and boss as well as other line staff members in ensuring they resolve disputes properly.

Grievance Procedure

When a grievance is brought to an employer’s attention, the employer usually has a formal means to address the employee ‘s concerns and attempt to reach a resolution. Usually called this formal means the grievance procedure. The collective bargaining arrangement in effect for unionized workers usually includes a specification of how disputes, such as the use of arbitration or mediation, should be treated. Many non-union employers often have structured processes for managing complaints and grievances from workers. The grievance procedure that is in place may be unique to the organization, but often a series of steps will be followed to try to get resolution.

For example, many grievance procedures begin by identifying where the grievance of the employee has to be started, such as with the direct supervisor of the employee, who must then meet with the union rep to decide whether the grievance is legitimate (i.e., they determine whether the provisions of the collective bargaining agreement are being breached or misapplied). Of course, this is just an example, but it’s often how grievance proceedings begin; it could be different in your workplace. In our example, they may take steps to resolve it after the supervisor and the union representative meet and agree that the grievance is valid. Even after that, the employee remains dissatisfied things might need to be escalated.

Again, collective bargaining agreements generally have specific steps outlining the exact procedure to be followed when a grievance is filed – and even non-union workplaces often have formal systems for handling and resolving complaints from employees. collective bargaining agreements can be helpful for both parties to have a formal grievance handling and resolution procedure. collective bargaining agreements define the way to report complaints and seek suitable resolutions without having recourse to lawsuits. This offers employers the ability to settle conflicts before litigation takes the shape of such problems.

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Need of Grievance Procedure

Without an analysis of their nature and pattern, the causes of employee dissatisfaction cannot be removed. The personnel administrator of an organization should go into the details of the grievances and find out the best possible methods of settling them. He should help the top management and the line managers; particularly foreman and supervisors, in the formulation and implementation of the policies, programmers and procedures, which would best enable them to settle employee grievances. These policies, programmers and procedures are generally known as the Grievance settlement.The grievance procedure is a problem solving, dispute-settling machinery which has been set up following an agreement to that effect or an employee makes and processes his claim that there has been a violation of the labour agreement by the company.

The grievances settlement procedure is a device by which grievances are settled, generally to the satisfaction of the trade union or employees and the management. This procedure is an important part of labour relations. It is essential, whether a plant is an organized one or not. The grievance machinery enables a management to detect any defector flaws in the working conditions or in labour relations, and undertake suitable corrective measures. If good morale and a code of discipline are to be maintained, it is essential that the grievance procedure is worked honestly and without prejudice, failing which there is likely to be an explosion, and production schedules would be shattered and the morale of the employees would be irrelatively impaired. A grievance procedure is essential because it brings uniformity in the handling of grievances. It gives confidence to the worker, for if he does not get a fair deal, he knows what to do and whom to approach to ensure that he does get justice.

The adoption of the grievance handling procedure is essential for a variety of reasons. For example:

  •  Most grievances seriously disturb the employees. This may affect their morale, productivity and their willingness to co-operative with the organization. If an explosive situation develops, this can be promptly attended to if a grievance handling procedure is already in existence.
  • It is not possible that all the complaints of the employee would be settled by first-line supervisors, for these supervisors may not have had a proper training for the purpose, and they may lack authority. Moreover, there may be personality conflicts and other causes as well.
  • It serves as a check on the arbitrary action of the management because supervisors know that employees are likely to see to it that their protest does reach the higher management.

It serves an outlet for employee gripes, discontent and frustrations. It acts like a pressure valve on a steam boiler. The employees are entitled to legislative, executive and judicial protection and they get this protection from the Grievance Settlement, which also acts as a means of upward communication. The top management becomes increasingly aware of employee problems, expectations and frustrations. It becomes sensitive to their needs, and cares for their well-being. This is why the management, while formulating plans that might affect the employees- for example, plant expansion or modification, the installation of labour-saving devices, and so on, should take into consideration the impact that such plans might have on the employees.

The management has complete authority to operate the business as it sees fit-subject, of course, to its legal and moral obligations and the contracts it has entered into with its workers or their representative trade union. But if the trade union or the employees do not like the way the management functions, they can submit their grievances in accordance with the procedure laid down for that purpose.

A well-designed and a proper grievance procedure provides:

  1. A channel or avenue by which any aggrieved employee may present his grievance;
  2. A procedure which ensures that there will be a systematic handling of every grievance;
  3. A method by which an aggrieved employee can relieve his feelings of dissatisfaction with his job, working conditions, or with management; and
  4. A means of ensuring that there is some measures of promptness in the handling of the grievance.

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