Academic Master

Human Resource And Management

Financial Implications of the Exporting Activities in Exporting

In business, expenses are a must, and some, if not taken care of, can lead to losses for the company. Expenses include payments to the employees, transportation costs, promotion costs, buying of equipment, phone and related utilities, taxes and licenses, rent of the house or the land, professional services, and insurance. All these expenses are a must; hence, a company should always be prepared to solve. Some of them can be avoided; some can only be minimized, while others can only stay constant. All these expenses are different in different regions. One of the factors that determine the cost of an expense is the country in which the business operates. The context explains some of the expenses the ECC could experience if they were to export things to Dubai.

One of the common expenses that the ECC will incur is the payroll expense. If they were to export their survey services from Dubai, it means that they need more employees to be left in the organization while others go out to other countries to deliver the company services. For this to happen, the employee needs allowances (Sundarakani, 2017, p. 115). In the other regions, the employee needs accommodation, food, security, transportation, and other necessities. An employee cannot provide all these by himself/herself since it is not his/her work. The expense can really be high due to factors like currency fluctuations and currency strength. The UAE uses the dirham currency, which is less strong than the US dollar (Shenkar, 2014, p.1. If an employee is sent to the US, they need more money due to this factor.

For an employee of a certain company like ECC to be sent outside the company to give services, he/she needs to be licensed. There is no way one can approach another company and claim to be an architect or a land surveyor. There is a need for proof. Some countries have certifications or licenses that they need to prove a service provider in that field. The company needs to incur the cost to secure the contract (Serrano, 2015, p. 1).

There are other minor costs like phone and utilities, rent and insurance (Sáez, 2015, p. 1). There must be a serious communication between the employee and the company. That is a cost that can be incurred.

In conclusion, there are costs that one can incur when exporting goods and services as a business. The most common one are the payrolls, taxes, licenses and no other minor utilizes. Most of these expenses can only be minimized but if reduced at a higher rate can lead to poor services.

References

Sáez Carmona, C., 2015. Marketing plan for business expansion.

Serrano, R., Fernández-Olmos, M. and Pinilla, V., 2015. International diversification and performance in agri-food firms. Documento de Trabajo1.

Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.

Sundarakani, B., 2017. Transforming Dubai Logistics Corridor into a Global Logistics Hub. Asian Journal of Management Cases14(2), pp.115-136.

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