As organisations begin to operate in foreign markets structural and environmental complexity and uncertainty increases. "If the domestic environment can be labelled uncertain, the international business environment is doubly so." (Mascarenhas 1982) International managers must know that international business environment is multidimensional that includes cultural differences, political risks, exchange risks, legal and taxation regulations. According to Mascarenhas the multiple factors a multinational faces due to environmental uncertainty are foreign exchange uncertainty, political uncertainty, and employment problems. However most experts of international business environment believe that it can be classified into four categories: administrative, engineering, entrepreneurial, and regulatory. More recently, Guisinger (2001) has put forward some of the main features of international business environment. They are: culture, legal system, political risk, income profile, tax regimes, exchange rate, and restrictions.
Culture may be described as the values, beliefs and attitudes of a country. These tell apart one country from another. International managers need to be aware of this while they travel, communicate or negotiates with people of other countries. Cultural differences are extremely important. An organization must give top priority to learning the foreign countrys proper cultural practices as well as cultural taboo.