Suitability of United Kingdom for Multinational Business Research Paper

Suitability of United Kingdom for Multinational Business - Research Paper Example The UK has a special relationship with foreign countries such as the USA and France. It is also a member of NATO, G8, G7, OECD, Commonwealth, and EU. This membership enables it to develop a good business and political relationship with foreign countries. However, the types of distance between the UK and these countries affect these relationships a great deal. According to Ghemawat (137), the different types of distance between different countries influence global trade and multinational business strategies. The specific types of distance identified by Ghemawat which affect the UK in its international trade and multinational strategies include Cultural, Administrative, Geographical and Economic distances (CAGE). In terms of cultural differences, the UK may be considered to experience distance dimension in international involvements through language differences with foreign countries, different ethnicities, different religions, and different social traditions and norms. The main featur e that makes the UK different from other countries is its British culture. For instance, the language spoken by UK citizens is British English. This differs from other languages spoken by UK’s trading partners. The language spoken in France is French while that spoken in Spain is Spanish. The language spoken in the Netherlands is Dutch while that spoken in the USA is American English. This difference in language affects multinational business strategies of multinational companies intending to enter the UK market. According to Alkema, Koster, and Williams (5), one of the most important business strategies for a multinational corporation is to maintain its core business products and services while attempting to meet the needs of its customers in the foreign country. This is always hampered by language differences because certain services are better offered and communicated using the local language of the host country than in British English. Furthermore, the social traditions, religion and ethnic communities of the UK may also not accept the products and services offered by multinational companies. Another example is that UK companies selling pork may not thrive well in countries like Russia. The second type of distance between the UK and other countries is Administrative distance. In this case, multinational business strategies and international trade between UK companies and foreign companies will be affected by the absence of shared monetary and political associations, political hostility and government policies. If the multinational companies from hostile countries intend to enter the UK market, they may face political resistance and may not thrive in those markets. For instance, some Middle East countries such as Iraq are not politically friendly to the UK because of the UK’s affiliation with the US. This makes them not to get appropriate reception in the UK. However, the UK political system is welcome to most countries and is, therefore, an a ppropriate destination for international business. Geographical distance also affects the international involvement of UK and other foreign countries (Ghemawat 142). For instance, if a country lacks a common border with the UK e.g. US, it becomes difficult for US companies to trade within the UK market. This is because it may take time to transport products from one country to another.