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Positive Impacts of Globalization on Businesses

Choose a global fashion, automobile or grocery/supermarket company that has expanded across borders into Asia. Discuss and critique its approach to ‘Internationalisation’ including a clear analysis of the strategies and process it has used to expand across borders. Also provide a detailed analysis of the challenges and problems the business has faced as it has expanded into the Asian market.

Due to the increased speed on knowledge innovation and generation, many firms have turned their operations from being local as they used to be and started engaging in external networks with the aim of optimizing their scope of business and activity developments. Management has turned to be a challenge in this era of globalization as activities must be undertaken with great expertise. The existing research studies have suggested and recognized business management as well as development competences as crucial factors in ensuring success of organizations. Because those studies only tackled the construct tangentially, this research aims at analyzing the part played by a business management and its decisions in the era of globalization (Crane & Matten, 2016, p.123).

In its basic definition, Globalization has been termed as the force that molds contemporary world of business, controlling business, the society as well as the environment where the business activities take place. All the stakeholders in the business transactions including consumers, suppliers and the entire corporation are connected the capital flow, material and information as the process of production expands globally (Kopnina & Blewitt, 2015). Globalization is an ongoing process in nature which links people, regions, cities and countries very closely than they used to be while operating locally. This phenomenon has made people’s lives more intertwined with other across the world through the clothes they wear, food eaten, music genres listened, the information received as well as the ideas they hold (UNESCO, 2010).

Globalization has emerged with its own risks and Opportunities, Globalization (2007) outlines that globalization trend to increase international economic integration is among the greatest forces affecting global economies currently. The current increase in globalization trend will have huge ramifications in the global economies. Globalization process has been in place for decades, but it has enormously expanded over the past half of the century, globalization has however not helped in closing the gap between first world's countries and the third world countries (Hill & Hernández, 2016).

Globalization has led to high competitions in businesses environment. The competition is related to the costs of product s and services, the target markets and the technological adaptations. In a case where some company produces their goods with less costs, they are able to expand their market shares by selling at cheaper prices which attract more customers than the other companies selling at considerably high prices (Forsyth, 2011). As a result of competition becoming stiffer day to day out, companies have been obliged to improve their brand standards as well as consumer welfares which have in turn affected consumers positively across the globe. Although some few negative effects of competition have been pointed out, the positive impacts outweigh them (Porter, 2012).

The Negative Impacts of Globalization

Globalization has facilitated a significant upswing in relation to technology levels utilized in the current business environment. Many innovative and globally oriented business ventures have capitalized on the technology exchanges to feat new industry opportunities. A live example in this scenario is the current E-commerce adoption by the majority of today’s businesses. Technology has also been utilized as tool of competition through its role determining the quality of products and services of a company diverse from other similar producers. Globalization has promoted the rate of technological exchanges and enhanced the overall quality of technology in the business environment (Doh, Jonathan & Hildy, 2013). Most of the companies based in capital demanding markets have been squeezed under risky environments necessitating a demand for them to have efficient and good operational technologies as well as R&D management (Forsyth, 2011).

Additionally, as a result of businesses going globally, people from different countries are able to secure jobs in across the borders especially in countries with inadequate labor force for their industrial and manufacturing sectors (Hoffmann & Kumar, 2013, p.65). Globalization has also encouraged the theory of outsourcing. Specializations like system software support, maintenance and marketing are given to the developing countries like Nepal, India and Pakistan, while other low rank jobs are given to third world countries where employment levels are very low.

As a result of businesses going international, products and service prices have become extremely unstable and fluctuate from time to time across the world in various sectors. As a result of stiff competitions for products and services, businesses in the first world countries have been forced to reduce their product and service prices (Porter, 2016). A good example of such scenarios has been observed in countries like China producing products at low costs than the rest of countries which has made the rest of the firms across the world to lower their product prices to keep their customers satisfied and loyal. The approach impacts businesses negatively as it limits the firm’s ability of sustaining social welfare.

In the first world countries, job insecurity risk is increasing in the era of globalization. Globalization has compelled firms to outsource their jobs to the developing and developed countries, which has weakened and reduced labor force quality in the developed countries. Outsourcing in the era of globalization has been taking place because businesses ventures want to produce their products cheaply, as it has been noticed in the developing countries like India, and China where production costs as well as wages are quite low compared to the highly developed countries (Willmott, 2011). As earlier mentioned in this paper, jobs like software programming and maintenance are outsourced to third world countries leading to loss of jobs as many people tend to congest in the same profession

The huge globalization waves which have been observed from its invention in the business market are approaching the last steps. But what is funny on this approach is the fact that the winners have been the companies which established significant international the moment it entered into the business environment pulling them extremely ahead of the domestic companies (Daniels, 2011). For instance, a few decades, Volkswagen, a German car company, has recorded an annual revenues increment of 10.5 %, while Peugeot, its rivals from French, has experienced growth of revenues by average rates of 2.5% only. Similarly, Procter & Gamble, a U.S. major consumer, has recorded an average annual rate of growth by 7.6 %, double the 3.1 % average recorded by Clorox, it’s regionally competitor in US. Besides, in the oil refinery industry, the two main rivals in this industry have taken conflicting paths, with Schlumberger which has gone on the way of globalization getting an average growth rate of 16 % per annum, compared to the 8.6% for Halliburton (Gleick, Wolff, Chalecki & Reyes, 2012).

However, globalization has not hit its end but rather morphing into more complexes and nuanced phase, gaining more inexorable powers that have escalated the previous phases to become livelier. The evolving markets will maintain their role as key sources of growth, considering their auspicious demographics, enhancing middle classes, and the new generations of “challengers” organizations (Johnson, 2012, p.427). As the next phase of globalization is embraced, the gap between businesses which have gone global and those which have not yet made decisions regarding the matter is likely to amplify even further, resulting into real chasms.


So, if a business organization wishes to be successful over the era of globalization, the question which management staff should be asking itself isn’t “Should the company go the global way?” but instead “How can it go the global way in a sustainable and successful way?” a question which should obtain its response from the company CEOs of global companies in general (Dervi?, 2015). Because the fact is, running a company in China or India (the emerging markets) having global ambitions, choices which will be faced are just the same as those being faced by the CEOs of developed markets you face are no different from those facing CEOs in developed markets, because they share those critical factors critical factors of success. Making it a favorable time of making such decisions, when a new and robust leadership becomes a key factor in the emerging markets like China and when a fresh realism in regard to globalization policies is evolving

Business owners are supposed to take stock of what has been achieved before in order to prepare for next phases of global trade. To help him or her meditate on the organizations global future, a framework has been developed from the past experiences of global “winners” and further discussions with spearheads of global organizations around the globe. Of course, each business organization usually exhibit unique features, unique set of opportunities as well as challenges (Weinstein, 2015). However, according to research studies, each CEO is supposed to fully address five issues concerning globalization in order to withstand the pressure of this approach: company’s position geographically, the pace of changes in the industry, the organization’s culture, model, and the CEO’s personal leadership qualities.

Nowadays, it is prevalent to discuss being or turning into a worldwide organization. Be that as it may, you can be worldwide in excess of one way. For example, in the event that you are Pepsi and have a worldwide brand, you can be worldwide in the exemplary path: by possessing all the major created and developing markets with worldwide brands, worldwide items, and worldwide supply chains (Solimano, 2017). What's more, in the event that you are LVMH, with a gathering of worldwide extravagance brands, or any of the major car and shopper hardware organizations, you can be worldwide thusly, as well.

Yet, there is another way. Some really worldwide organizations, for example, P&G, Unilever, and Nestlé have effectively taken after a multi-nearby approach: they have made diverse brands some worldwide, some neighborhood; they have created distinctive value focuses for various markets; and they have built up an assortment of worldwide and neighborhood supply chains (Noe, Hollenbeck, Gerhart & Wright, 2013). As much as by whatever else, their key decision has been controlled by what they offer. Nourishment, toiletries, and minimal effort bundled merchandise such items have a tendency to be created privately, marked locally, and customized to neighborhood tastes.

Yet, you may not be a worldwide organization yet. On the off chance that you are established in one nation, your subsequent stage will be to wind up provincial. In the event that you are local, you can sensibly plan to end up worldwide after some time. Numerous organizations appropriately constrain themselves to a local approach maybe as a result of restricted assets or abilities or the particular needs of provincial customers. Among the best locally engaged organizations are Bajaj Auto, Falabella, Siam Cement, and MTN Group But regardless of whether a CEO is resolved to remain provincial, you should acknowledge that everything indicates a worldwide future (James, 2014, p.80). All that really matters is: whatever the current geographic position, the conviction of globalization ought to decide CEO's yearnings, mentality, and, at last, his approach.

Worldwide leaders in local markets are profoundly well-known in the nearby markets: it will appear to be quite steady and if it's a vast organization, it is probably going to use noteworthy impact in the business and political fields. However, remote markets are another issue. They are controlled by vulnerability, subject to quick change, and harder to impact. New governments may force higher duties, costly levies, or laws and directions that farthest point the development of merchandise, administrations, individuals, and capital. Political pressures can prompt endorse or blacklists (Gleick, Wolff, Chalecki &Reyes,  2012). Wages may strongly rise and change the financial aspects of the business. Likewise, by exchanging all around, the administrators are probably going to confront more extensive scopes of dangers. As of late, worldwide calamities, for example, Iceland's volcanic fiery remains cloud that cleared crosswise over Northern Europe in 2010 or Japan's atomic catastrophe at Fukushima and the surges in Thailand in 2011 have shown the risks of depending on single providers, single manufacturing plants, or single coordination tasks.

This implies an organization, anyway expansive it will be, it must be spry, with the goal that the chief can roll out fast fire improvements to setup if neighborhood or local conditions change. The chief must have the capacity to relinquish certain activities without undermining his or her worldwide tasks. So in spite of the fact that he should be heartlessly effective, he should have some slack in the framework, a few "redundancies" so singular issues don't upset his worldwide supply chains (Schmuckler, 2014).


What's more, he ought to have some sort of corporate radar that continually screens conditions the world over. This could be a straightforward month to month revealing arrangement of key financial, political, legitimate, and social pointers. However, it could likewise be a modern "war room" demonstrating every one of his activities progressively. In this time of huge information and progressed investigation, there is no reason not having the exceptionally most recent data at the fingertips, and also alternate courses of action for key episodes with the goal that important changes in accordance with a business can be made.

It is likewise imperative for a business manager to fabricate a broad system of accomplices (Schmuckler, 2014). Numerous fruitful organizations particularly those in the mold, sportswear, and customer hardware ventures seek after an advantage light methodology at whatever point conceivable. They center on R&D, showcasing, and deals and outsource the generation of their items to nearby organizations. In the meantime, in the vitality and mining parts, numerous organizations go into joint-wander courses of action with nearby organizations, in this manner sharing the risks.

In its broad definition, outsourcing refers to the act of contracting out capacities that initially used to be done by the in-house team, a long-lasting U.S. hone. At an instance when a vehicle manufacturer in Michigan purchases brake pads from a middle provider in Ohio instead of producing them locally, that is outsourcing. At the instance when an organization substitutes it’s cleaning staff and cafeteria laborers with an outside temporary worker who does likewise benefits all the more efficiently, that is also outsourcing. At an instance when an organization contracts finance experts, bookkeeping services, and programming activities abroad, that is still outsourcing. Plainly, outsourcing can lead to employment misfortunes especially in a case where the outside service providers are more productive and utilizations less specialists (Ellram, Tate & Billington, 2013, p.148).

Offshoring on the other hand is seen as the overall cousin to outsourcing services. Instead of swinging to family service providers, organizations may acquire goods or an organization from abroad suppliers so as to cut down costs. On its own too, Offshoring has a considerable history in U.S. economics; for instance, business organizations in Mexico supply arrange spreads and wiper sharp edges to Detroit vehicle manufacturers. Seems, by all accounts, to be new approach to offshoring that has been impacting experts in the organization division who never foreseen that would see outside competition for their occupations data administrators, PC programming engineers, therapeutic transcriptionists, et cetera (Ellram, Tate & Billington, 2013, p.148).

The response to this inquiry will center around three imperative issues that are in some cases ignored in the exchange. In the first place, globalization suggests that financial circulation streams in two headings; in spite of the fact occupations may be lost to the foreign workers, employment opportunities may be picked up the economy expands (Contractor, Kumar, Kundu & Pedersen, 2011, p.1417). For instance, past information indicates that, in regard to office jobs, the U.S. insources much more compared to its outsources; that is, similarly as most U.S. organizations utilizes the leadership capabilities of nonnatives, outside organizations make considerably more prominent utilization of the leadership of U.S. inhabitants. "Office work" refers to the classification of business, expert, and specialized leadership that comprises of PC programming, broadcast communications, legitimate leadership, saving money, building, leadership counseling, call applications, information passage, and other sequestered administrations. In 2003, U.S alone purchased almost $77 billion worth of those expertise’s from outsiders, yet the estimation of the experts it sold to nonnatives was more, more than $130 billion (Egger & Egger, 2016).

Here's another arrangement of intriguing numbers. In the vicinity of 1991 and 2001, the U.S. based multinationals corporates made near 3 million employments abroad. Be that as it may, they also made 5-1/2 million occupations inside the U.S.an up surge of about 30% in labor force. That is an essentially quicker rate of occupation development than absolutely residential organizations created. Furthermore, it shows that you can't expect that a vocation made abroad essentially infers one isn't made internally. For instance, outspreading an abroad system every now and again implies you need to contract more laborers in the U.S., as well—individuals in administration, coordination, innovative work, and global IT.

My other point is to show that open exchange makes openings in the countries involved by helping remote economies wind up more grounded. As salaries increase in different countries, so is their interest for merchandise and enterprises, huge numbers of which those countries won't have the ability to come up with just as it has be seen in U.S. This rise in remote curiosity for imports has been an open chance for U.S. organizations to resist to give those products. Also, it would be shameful to miss that open chance in the light of exchange boundaries our policymakers raised. It would imply lost fair deals and lost employment opportunities in those regions (Bhat, Gupta & Murthy, 2016).

At last, globalization can help build profitability development in the U.S. The case of offshoring's impact on its spread in the U.S. what's more, in this way, on our monetary development outlines the point. As per one gauge, the globalized creation of IT equipment that is, the offshoring of PC related assembling, for example, Dell PC manufacturing plants in China diminished the costs of PC and media communications hardware by 10%-30%. These value decreases helped its spread all through the U.S. economy and raised both profitability and development (Bhat, Gupta & Murthy, 2016).

Offshoring offers the possibility to bring down its costs programming and administrations too. This will advance its further spread and of new business forms that exploit modest IT. It additionally will make employments for U.S. laborers to outline and actualize IT bundles for a scope of enterprises and organizations. Albeit a few occupations are in danger, similar patterns that make offshoring conceivable are making new openings and new employments all through the U.S. economy (Bhat, Gupta & Murthy, 2016).


I've said profitability a few times up until this point, and I need to center around it quickly, in light of the fact that I think it assumes a noteworthy part in the discourse about occupations in the U.S. In the course of recent years, U.S. efficiency in the nonfarm business division has developed at a 4.8% yearly rate. Temporarily, this expanded profitability has given organizations a chance to fulfill the interest for their yield without hiring new specialists on net. Along these lines, it gives the idea that this remarkable surge of expanded effectiveness in our economy clarifies considerably more about the occupations circumstance than offshoring, outsourcing, or globalization does.

Albeit, plainly, profitability for an organization means torment for laborers who are dislodged, most financial analysts agree that higher efficiency is something to be thankful for the economy. Why? Since, over the long haul, higher profitability is the most promising way to create higher anticipations for everyday economy stability. The American specialist's ability to provide more products and ventures has been the secret behind the U.S’s. astonishing economic growth all through its history. Think about the assembling and horticultural parts, where more yield would now be able to be delivered with less laborers. A similar pattern has been observed in leadership: U.S. used to have lots of lift managers, phone managers, bank employees, and corner store chaperons, but now the technological advances have presumed control over huge numbers of these occupations. In like manner, the Internet has assumed control numerous normal errands from movement specialists, stock dealers, and bookkeepers. What's more, with fast information interfaces, a great deal of office work should be possible all the more economically abroad (Bhat, Gupta & Murthy, 2016).

In summary, globalization has been depicted as good, bad but inevitable. What has been achieved in the scrutiny of globalization is the comparison of its advantages and disadvantages. People usually compare its advantages and disadvantages to determine whether it is desirable or not under different circumstances. But the prolonged exposure to globalization has proved to be inevitable. The sole solution is making use of resources available in the best way possible in order to benefit both businesses ventures and society

References

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Hill, C.W. and Hernández-Requejo, W., 2016. Global business today.

Porter, M., 2012. Corporate strategy. New York. New York, NY.

Doh, Jonathan P., and Hildy Teegen, eds. Globalization and NGOs: Transforming business, government, and society. Greenwood Publishing Group, 2013.

Hoffmann, J. and Kumar, S., 2013. Globalisation–the maritime nexus. In The handbook of maritime economics and business(pp. 65-94). Informa Law from Routledge.

Porter, M.E. ed., 2016. Competition in global industries. Harvard Business Press.

Willmott, M., 2011. Citizen brands: Putting society at the heart of your business. John Wiley & Sons Incorporated.

Daniels, J.D., 2011. International business: Environments and operations. Pearson Education India.

Gleick, P.H., Wolff, G.H., Chalecki, E.L. and Reyes, R., 2012. The new economy of water: The   risks and benefits of globalization and privatization of fresh water. Pacific Institute for Studies in Development, Environment, and Security.

Johnson, D.G., 2012. Globalization: what it is and who benefits. Journal of Asian Economics, 13(4), pp.427-439.

Dervi?, K., 2015. A better globalization: legitimacy, governance, and reform. Ctr for Global Development.

Weinstein, M.M. ed., 2015. Globalization: what's new. Columbia University Press.

Solimano, A., 2017. Can reforming global institutions help developing countries share more in      the benefits from globalization? (Vol. 2518). World Bank Publications.

Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2013. Gaining a competitive   advantage. Irwin: McGraw-Hill.

James, B., 2014. Reducing the risks of globalization. Long Range Planning, 23(1), pp.80-88.

Gleick, P.H., Wolff, G.H., Chalecki, E.L. and Reyes, R., 2012. The new economy of water: The   risks and benefits of globalization and privatization of fresh water. Pacific Institute for            Studies in Development, Environment, and Security.

Schmuckler, S., 2014. Benefits and Risks of Globalization: Challenges for Developing      Countries.

Ellram, L.M., Tate, W.L. and Billington, C., 2013. Offshore outsourcing of professional services:  A transaction cost economics perspective. Journal of Operations Management, 26(2),   pp.148-163.

Contractor, F.J., Kumar, V., Kundu, S.K. and Pedersen, T., 2011. Reconceptualizing the firm in a    world of outsourcing and offshoring: The organizational and geographical relocation of  high?value company functions. Journal of Management Studies, 47(8), pp.1417-1433.

Egger, H. and Egger, P., 2016. INTERNATIONAL OUTSOURCING AND THE    PRODUCTIVITY OF LOW?SKILLED LABOR IN THE EU. Economic Inquiry, 44(1),   pp.98-108.

Bhat, J.M., Gupta, M. and Murthy, S.N., 2016. Overcoming requirements engineering    challenges: Lessons from offshore outsourcing. IEEE software, 23(5), pp.38-44

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