International Business Management Essay Example | Topics and Well Written Essays - 1000 words - 1

International Business Management - Essay Example For example, cost of wages paid to casual employees in a company. Indirect labor refers to labor that is not directly related to converting raw material to finished products. An expense refers to all cost incurred in the production of finished goods other than material and labor costs (Drury, 2008: p28). Revenue is an increase in the net worth resulting from a transaction. In business, revenue is the money received from selling products or services. It is collected when it is earned. Revenue consists of three items; total revenue, average revenue and marginal revenue (Jain, 2011: p43). Total revenue (TR) is the total income of the firm. TR= Quantity * Price. If a firm sells 1000 blankets at a price of $200 each then the TR will be $200,000. Average revenue (AR) is the revenue per unit of sold output. AR= TR/Quantity. For example if the revenue for sell of 1000 blankets @ $200 is $200,000 then AR= 200,000/1000. AR= $200. Marginal revenue (MR) refers to additional revenue incurred from the sale of additional output. For example, if the TR realized in the sell of 1000 blankets id $200,000 and that from the sale of 1001 is $200,400 the MR of the 1001st blanket is MR= $200,400 – 200,000. MR= $400. Managers need to scan for factors that affect the viability of their organization in order to maximize their profits and remain competitive. These factors are both internal and external. They include politics and law, technological factors, culture, and governance. The success of the organization is dependant on how managers strategize these factors in order to achieve prosperity. In the current global marketplace, culture is a key influence on the success of the firm. Culture influences the entrance and sustainability of an organization in the international market (Hill, 2012: p 235). Managers have to learn and understand cultural differences with their international suppliers and consumers in order to create a direct contact.