Business Development and the Nature Globalization - Essay Example

?Business Development and the Nature of Globalisation Introduction The term globalisation has been in the air since the post war period but has become a buzz in the recent past (Stiglitz, 2003). Globalisation is often mentioned in line with political discourses and or economic affairs; however, every life aspect is affected when the globalisation is mentioned. Globalisation is an extensive concept that has many proponents as well as many opponents; hence, Stiglitz (2003) argues that the concept has different understandings based on individual’s ideologies or political bearing. This paper aims at providing a vivid understanding of the world of business today by exploring the nature of globalisation in relation to the development of business organisations and general growth and development across the globe. The concept of globalisation can be controversial in some way. The IMF defines globalisation as a “...historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders” (Avny, 2007:12). In essence, globalisation can be termed as a process through which governments, companies and people integrate and interact. This process is underpinned by foreign investment and international trade as well as information technology. Taking an economic and development sense, countries will open up their borders for foreign investment and limitless business ventures which eventually spurs the country’s economic growth and development. The globalisation process has been viewed by a number as an instrument of capitalism that is more sophisticated and updated with the aim of dominating the globe (Hertz, 2002). It can be argued that through globalisation, a business entity is presented with the chances or rather the opportunities to grow and or develop both internally and externally. According to Sorensen (2012), business development refers to "the tasks and processes concerning analytical preparation of potential growth opportunities, the support and monitoring of the implementation of growth opportunities, but does not include decisions on strategy and implementation of growth opportunities" (p. 26). These tasks involve sales, marketing, as well as the development of suitable and reliable strategies for the business organisation. The attention of all businesses should be directed towards the establishment of marketing teams with suitable strategies as well as focus on business expansion. Globalisation is all about expansion; hence, Avny (2006) believes that business entities are obliged to embrace the concept in order to achieve immense expansion and generate significant revenue for its self as well as national growth and development. Globalisation, as earlier noted is a product of human innovation and rapid advancement in technology. Technology presents business organisations with numerous opportunities that can be pivotal in the success or rather development of a business entity. The frequent identification of these opportunities presented by technology makes it possible for these small business entities to expand and reach international markets and as a result bring in more income. Thus, Todaro and Smith (2009) opine that business development’s major role is to help firms identify and take advantage of the emerging market opportunities. The Nature of Globalisation Among the phenomena worth taking note of across the last period of the twentieth century is globalisation. By itself, it carries significant importance both in developing or what are referred to as Least Developed Countries (LDCs), and developed nations across the globe. The process’ emergence and expansion can be credited to the advancements made in the transportation sector, communications as well as the rapid technological advancement towards the end of the twentieth century and into the twenty first century (Avny, 2007). The advancements made have helped in the reallocation of human and natural resources or rather manufacturing activities as well as the transferring of industries from industrial nations to least developed countries with cheap cost of labour. Globalisation can have massive impacts on both developed and LDCs. Globalisation is a tool that allows for increased foreign direct investment (FDI) as well as increased import/export business; which in essence is an indicator of business development. The FDI is used in development of infrastructure and new business entities as well growing of the already existing industries in order to spur the economic growth and development of a given country. In order to understand clearly how globalisation affects business development, it is essential for a number of components of globalisation to be understood as well. A global reallocation of industries from the traditional industrialised countries to the LDCs has been evident over the past two decades where cheap labour is available, for instance to South-East Asia, China, Africa and Latin America (Guillermo, 2011). This move has been a path towards development of business in these nations as more and more people venture into trade and as international borders open up; local business goes international as well. An example is where automobile and aircraft industries have entered into agreements with subcontractors in LDCs to outsource greater percentages of their operations. The result of this move is that demand for employment is augmented which in the end contributed hugely to the development of business entity as well as a country’s economy (Guillermo, 2011). Globalisation requires countries open up their borders for international players to come in and go out and as a result it enables LDCs increase their share of the world’s production of manufactured commodities. As a result of the reallocation of the industries, a massive expansion in global trade volumes was, and is still evident (Birdsall, Rodrik and Subramanian, 2008). As more manufacturing and production facilities move towards these underdeveloped nations, more goods, commodities, products and materials circulate the world markets. The growth and development of infrastructure like roads and communication lines have resulted in the reduced intervals between the travel times taken from the production and or manufacturing point to destination and or sale points enabling more countries to take part in the trade. The growth of these activities has seen more opportunities arise for the development of business entities which has been a credible contributor to the advancement in the economy of LDCs. It is easy to see the amount of similar products that are flooding the world markets in the contemporary world; an indicator that the world is moving in the direction of becoming a one-village market and or community. According to Birdsall, Rodrik and Subramanian (2008), these developments result in the fast growth and development of these nations’ economies due to the increased multinational trade. Increased participation in global activities together with increased influence by multinational operations was consequently followed by significant moves of capital between the trading nations. The activities involving movement and or exchange of capital included indirect and direct financial investments in least developed countries (LDCs) with the aim of raising the incomes and or revenue of the countries (Todaro and Smith, 2009). The local businesses and or industries are required to meet international standards as a requirement of globalisation and as a result some are forced to merge with other multinationals in order to increase their operations (Soros, 1998). However, these moves can be a danger to the domestic economy of these developing nations and as a result cause sombre financial burden and or crisis in their capital markets; a case that was witnessed by business institutions in South-East Asia and Russia during the 90s (Hertz, 2002). These has resulted in some pundits criticising globalisation labelling it as some form of capitalism and as result requires some form of government intervention or otherwise, Avny (2006) posits that the prospects are worrisome. In order to measure or rather determine the development of business in different economies, it is essential to examine the volume of exports from these nations (Friedman, 2005). Due to industrial reallocation, manufacturing and production activities and facilities also spread all over the world thus availing more products, commodities and materials in the global market. As a result of this growth in local production, international trade has subsequently grown and is a major factor in major economies. A previous research in EU countries revealed that the last decade has seen a growth or rather an increase in the exportations by 1, 700 billion Euros from 1, 500 in 1998 to 3, 200 billion Euros in 2008 (Guillermo, 2011). Similarly, the report revealed that the imports of these nations also increased. The growth of these industries meant that qualified employees were highly in demand. A qualified employee work force is an indicator of the business organisations’ intent of reaping the maximum revenue from its production. Hiring of such expertise is direct investment that requires direct income, thus the level of qualification is directly proportional to the level of production and hence level of income. The reallocation of industries resulted in the industrial unemployment in the industrialised nations and as a result of the external trade, employment rose in the service industry. The development of business organisations in the service sector was as a result of globalisation which at the same time led to underemployment in the industrial sector of these economies. However, these developments can be used to demonstrate the impacts felt by national economies as a result of globalisation (Birdsall, Rodrik and Subramanian, 2008). Conclusion Globalisation is an evoking concept that still is opposed by an ideological minority unable to deny the benefits associated with globalisation knowledge with respect to development of businesses as well as national economies. The few who view globalisation as some form of capitalism should drop the idea and embrace the concept as a major factor in business development. References Avny, A. (2006) Future challenges for the judiciary. In Kierkegaard S. (ed.) Business law & technology: present and emerging trends, vol. 2, Copenhagen, Denmark: IAITL. Avny, A. (2007) How to cope with the globalisation. In Kierkegaard S. (ed.) International law and trade: bridging the east-west divide, Ankara, Turkey: IAITL. Birdsall, N., Rodrik, D. & Subramanian, A. (2008) “How to help poor countries,” In Giorgio Secondi (Ed.), The Development Economic Reader, Oxford:Routledge. Friedman, L.T. (2005) The world is flat, New York, T. Friedman. Guillermo, P. (2011) ‘Growing Business or Development Priority? Multilateral Development Banks’ Direct Support to Private Firms,’ Centre for Global Development, Washington DC. Hertz, N. (2002) The silent takeover–global capitalism and the death of democracy, United Kingdom: Arrow Books. Sorensen, H.E. (2012) Business development: a market-oriented perspective. John Wiley & Sons. Soros, G. (1998) The crisis of global capitalism, New York: Public Affairs. Stiglitz, J. (2003) Globalisation and its discontents, New York: Stiglitz. Todaro, M. & Smith, S. (2009) Economic development, England, Pearson Education Limited. Read More