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Unit 5 - International Business
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Voorbeeld van de inhoud
Nabeel Choudhury
Unit 5 – International Businesses
Assignment Two
External Factors and Cultural Differences
I enquired to create a two-part investigative journal article on two different countries that
might be suitable for it to trade in. The two counties which I have selected are:
Iran
North Korea
Introduction:
Iran
Iran is one of the largest countries that is located within the Middle East with over 81 million
inhabitants that is also known as Persia. 1 It is also one of many Islamic republic states which
means it is officially ruled by Islamic laws for example they use Sharia law as its basis for
government, laws and social norms. Iran officially became the Islamic Republic on April 1,
1979, when the monarchy was overthrown and clerics assumed political control under
supreme leader Ayatollah Khomeini.2 The official language spoken within Iran is Persian with
70 million native speakers and 110 million in total. 3
,Nabeel Choudhury
Unit 5 – International Businesses
Assignment Two
North Korea is a country located within East Asia with over 25 million people and is led by
the supreme leader Kim Jong-un since 2011. 4 According to the ‘Risk Advisory Group’, North
Korea is the most secretive and autocratic state alongside an opaque government. 5 Its
government doesn't like people from outside the country going there and finding out what's
going on. The official language is also Korean with 75 million speakers of whom live in North
Korea, South Korea, China, US and Japan. 6 North Korea also shares a border with South
Korea however, both North Korea and South Korea separated from each other due to
conflict of an unexpected casualty of the escalating Cold War between two rival
superpowers: the Soviet Union and the United States. 7 Kim Jong-un has not stepped foot in
South Korea for 65 years and the leaders of the countries have not met for 10 years.
However, this changed in 2018 when both leaders met with each other on the border of
both countries to declare ‘a new history’.8
McDonald’s
McDonald’s is one of the largest American fast food company with new headquarters in
Chicago, Illinois, United States from Oak Brook, Illinois. McDonald’s was founded by Richard
and Maurice McDonald in 1940 and in 1954 Ray Kroc joined as a franchise agent after
witnessing the potential McDonald’s had with their 6 franchises. He later proceeded to buy
the chain from the McDonald brothers by taking 1.9 percent of the gross sales whereas the
McDonald brothers got 0.5 percent with maintaining a small number of restaurants that
caused conflict. Ray Kroc eventually bought them out for $2.7 million-cash in 1961 as he
wanted full control however, he wasn’t aware that the deal did not include the original
McDonald’s in San Bernardino. He was able to get them out of business by creating a
franchise one block away and now Kroc was able to successively run McDonald’s.
Unfortunately, Ray Kroc died on January 14, 1984 at the age of 81 as the chain had thrived
that year with 7500 outlets in the United States and 31 other countries and territories. It
was then taken over by James A. Skinner who started off as a restaurant manager trainee
without graduating from college and worked his way up to become CEO of McDonald’s.
Political Factors – Iran
Iran have a president that is elected for a four-year term by direct vote and not permitted to
run for a third term or serve for more than 8 years. Their current president is Hassan
Rouhani that took office on 3rd August 2013 and is frequently described as a moderate for
, Nabeel Choudhury
Unit 5 – International Businesses
Assignment Two
his work with domestic policy, women’s right and diplomatic relations. 9 He is the head of the
government and their system is an autocratic council/committee based system, in which
councils and committees made up of religious elders, overseen by a council chosen by the
Supreme Leader.10 Iran also have a unitary Islamic republic with one legislative house. 11
Nevertheless, Iran’s political structure is democratic with elements of theocracy like other
Islamic states that maintains religious laws and has religious courts to interpret all aspects of
law.12 Iran have universal suffrage for both men and women which allows the right of almost
all adults to vote in political elections. 13 Universal suffrage is about having equality in the
realm of human rights and this impacts society because every vote counts, issues in a
society receive their appropriate weight in terms of importance and urgency. If McDonald’s
decided to conduct their operations within Iran, it will heavily affect the way they operate
on a day-to-day basis as Iran’s decisions are based on Islam. Consequently, McDonald’s will
need to adapt to Islam by ensuring their food is Halal as Iran is a 100% Halal destination
unlike America where only some businesses offer Halal food. 14 This could have a negative
impact on McDonald’s as they may need to change their recipe which would not only cost
money but will take time to find new suppliers in Iran. McDonald’s currently conduct their
operations within Saudi Arabia and they use 100% pure Halal meat as the slaughtering
process is carried out by a licensed Muslim butcher. They import the 100% pure Halal beef
from the ‘Australian Food Corporation’ in Australia and the Halal chicken meat is supplied by
the Brazilian ‘JBS Foods’ and the Malaysian ‘McFood’ Company. 15 McDonald’s can use these
suppliers if they decide to conduct their operations within Iran as they have a strong and
close relationship with their suppliers. However, there could be a possibility where the new
recipe doesn’t taste better than their universal menu which could put them in a large
dilemma or they could simply have their suppliers slaughter animals according to Islamic law
(dhabiha), as instructed in the Quran. The state of human rights in the Islamic Republic of
Iran has been criticized both by Iranians and international human right activists. Their rights
under the constitution consists of “equal rights among races, ethnic groups (article 19)
gender equality (article 20), protection of the rights of women (article 21), freedom of
expression (article 23), freedom of press and communication (article 24) and freedom of
association (article 27)."16 McDonald’s are committed to respecting the human rights of
diverse locations and cultures like Iran as their founder mentions “The basis of our entire
business is that we are ethical, truthful and dependable.” which are words that are relevant
to this today. Iran’s human rights are an advantage for McDonald’s to promote dignity,
fairness, equality and respect when they will work with their stakeholders so that they can
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