Labor and Currency Exchange Issues in Global Business

Organized labor constraints for an international business

Organized labor often comes in the form of labor unions, which have the agenda of protecting the rights and privileges of workers or employees from any actions that would potentially threaten their rights, income, or safety. They do so by raising objectives, threatening disruptive behavior, and promoting legislative efforts to restrict the freedom of international corporations to move their facilities freely, often by imposing taxes (Lacoma, 2017). International businesses can counter these constraints in several ways. One way is to lobby political forces that oppose the labor unions and would promote more freedoms for international businesses. Another way of limiting the influence of labor unions for international companies is to use their power to create and take away jobs to force said unions into submission. Either of these methods, however, ought to give the company a bad reputation. Another method involves a shareholder capitalism model, which makes every employee in the company a shareholder. This form of capitalism makes the workers involved and interested in the prosperity of the company, preventing them from raising unreasonable demands for their sakes.

Fixed and floating exchange rates from an international business perspective

Floating the exchange rate is an important governmental tool for conducting an independent and autonomous monetary policy. It allows the government to alter the money supply to adjust the trade balance. The fixed exchange rate, on the other hand, prevents inflation and helps the government avoid monetary speculation and economic uncertainty, which is frequent with floating exchange rates (Heakal, 2017). From a business perspective, the floating exchange rate is optimal, as it protects the businesses from interventions and domestic inflation. Under that form, the exchange rates respond to market fluctuations and are motivated by supply and demand. Fixed systems, on the other hand, are detrimental to international businesses as they make them more vulnerable to international cost competitiveness and artificial depreciation of currencies, which may lead to internal instability within the country, which would result in loss of profits and decreased sales (Heakal, 2017).

References

Heakal, R. (2017). Currency exchange: Floating rate vs. fixed rate. Web.

Lacoma, T. (2017). Labor unions & the importance in global business communications. Web.