1000 words to answer the follow the questions at the bottom of the page see attachment A regional bank has decided to open an office overseas for serving those businesses that are expanding internationally
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Opening an office overseas
Opening an office overseas is a good way of growing a business internationally but there are a couple of
challenges associated with it. I will focus on doing business in the second largest economy in the world
which is China. The first challenge is the sensitivity of the Chinese culture and its impact on a business.
Chinese use hierarchy as an integral part of a business where managers are more distinguished as
compared to the United States ( Zhang 228) . The managers expect to be obeyed without any question.
An American subordinate will not be allowed to disagree or make any alternate suggestions to an issue
contrary to his boss. American workers are used to having diverse opinions and make suggestions where
necessary. China has 56 ethnic groups joined together to create Chinese culture. Etiquette is an
important aspect when doing business with Chinese ethnic groups. Older people are given more respect
and the protection of face which represents personal pride. Criticism or confronting a person with high
social status in China can be disastrous for the business ( Boden 219) . The Chinese education system is
monolithic and will increase the social and economic pressure on the business because it is stifled by
intense bureaucracy .
China has a socialist political system with the communist party currently in power. It is headed by the
premier who presides over a de-facto cabinet ( Heilmann 59) . The National People’s Congress party
deals with legislations by enacting and amending laws. Chinese legal systems comprise of fundamental
laws, basic laws, laws other than basic laws and normative documents ( Rutten and Kjeld 74) . Approval
of a business in China is done by the National Development and Reform Commission.
The Chinese government has a strong presence in the private sector with more control when it does not
cooperate with its policies. This intervention induces a crowding-out effect in natural resource
investments which reduces investment efficiency and distortion of investment allocations.
Chinese economic system is referred to as a socialist market economy. This economic system was
initiated in 1978 to meet Chinese centralized political control. International trade in China involves an
enlargement of roles played by the free markets ( Rutten and Kjeld 27) . China has placed a huge role for
foreign investment and trade with several nations to boost its economy. Industrial ministries have
control of establishing their own trade enterprises minimizing the monopoly by foreign trade
corporation handling import and export transactions.
Will your presence in this country be helpful in your attempts to invest in other developing countries?
Is this country involved in any regional integration efforts? How so?
Why did you choose this location for your bank?
As a manager, what would be your overall assessment about whether you want to pursue opening an
office there? Are the financial risks worth taking?
Will it be beneficial to all of the stakeholders?
In pursuing this, what type of presence do you think would be best suited to your objectives?
How should the plant be financed?
Keep in mind that the country that the plant is in does not necessarily have to be where the financing
What is your final decision on the financial center you chose to work with? Write about the logic and
reasoning for your decision?
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