Globalization in World History - Essay Example

? Business Essay The extent to which the understanding of the history and development of business help in the understanding of business today The extent to which the understanding of the history and development of business helps in the understanding of business today depends on the effectiveness of economic policies instilled in the past. An examination of the history of some of the successful corporations reveals that most big companies were based on diversified groups. This is because they could take advantage of the economic scales easily because of the characteristics of the internal markets. It is also evident that authoritarian regimes helped in the development of businesses. This can help in the development of business today because it enables individuals make wise choices regarding the development of the economy (Trompenaar, and Wooliams, 2003). An understanding of the history behind the development of business helps in understanding of business today because the economic policies that were used in the past. This is because they ensured the restriction of imports and the growth of exports, which enhances the development of businesses in terms of investments. It is evident that, in the past, companies did not pay attention on light labour intensive sectors. This is likely to help in the development of business today because the cost of labor will be low, causing the company to gain extra profits. History also depicts that there are governments that intervened by supporting private companies, therefore, enhancing the development of businesses. This can be used by governments today in enhancing business development through subsidizing firms, the protection of businesses through tariffs, ensuring stifled labour conflict and granting credit to businesses at favorable terms (Trompenaar, and Wooliams, 2003). In the past, governments put objectives to help businesses such as private firms to meet their export targets. History also depicts that the creation of business models, in the past, have contributed to the creation of a rationale that can help organizations today deliver and capture maximum value of the business. The constructions of businesses in the past have helped in the development of business strategies that are used by businesses today. The development of business models has enhanced the establishment of businesses by enhancing businesses with architecture of value creation. An examination of the history of development of business reveals that the development of business ethics has also helped in enabling businesses adhere to their daily dealings. Business ethics help in the development of business by enhancing the interaction of businesses all over the world (Trompenaar, and Wooliams, 2003). How does the nature of globalization help in the understanding of business today? Globalization refers to the expansion of investments, trade and business interactions worldwide. The nature of globalization has helped in understanding business today in that it has enhanced prosperity for most businesses. Most people who support free trade claim that globalization enhances the creation of opportunities for businesses. It is thought that when a business is allowed to offer its resources to the global market place, then the business is likely to improve. Globalization tends to increase competition resulting to the growth of businesses because of the development of new products (Hopkins, 2004).  Globalization has enhanced the development of business today because it not only increases the need for the acquisition of knowledge concerning cultural differences, but it helps in the establishment of cooperate cultures. History depicts that globalization has caused businesses to transfer experts from one country to another in an attempt to enhance the development of the business. Globalization helps in the development of the business because it enhances an understanding of the communication styles, cultural influences and the social behaviors of different societies. It has enhanced an understanding of business today because it tends to conceptualize a modern phenomenon that involves the breakdown of borders. It is through globalization that new technologies have emerged resulting to the increased connections in the world. It is this that has resulted to the development of business today (Hopkins, 2004).  The history and development and the nature of globalization has helped in the understanding of business today because interactions between most business enterprises has been enhanced. This can be attributed to the increased importation and exportation of goods between countries. It is argued that true globalization involves procurement by one firm, manufacturing, and selling of goods to different countries (Hopkins, 2004).  The development of business can be attributed to globalization because of the increased trade that it has enhanced across boundaries. It has helped in the understanding of business today because most companies tend to have subsidiary companies in many other countries in an attempt to develop their businesses. Companies have also attempted to sell their products in different countries hence enhancing business development. It is through globalization that technical collaboration and the growth of joint ventures between different companies across the world has normally been enhanced (Hopkins, 2004).  Globalization has helped in the understanding of business organization globally because of the rapid growth in business that has been recorded in the twentieth century. It has enhanced an understanding of business in the modern world because it has ensured the occurrence business interactions beyond political boundaries of countries. It is evident that when businesses engage in such interactions involving economic resources such as human resources and capital, then international production is also likely to be enhanced. It is such activities that have enhanced an understanding of business today resulting to the development of businesses (Hopkins, 2004).  Research reveals that when such international business organizations occur, then multinational enterprises, which have a worldwide approach to marketing, are likely to be developed resulting to the development of businesses. Globalization helps in understanding business today because it enhances the sourcing of services, goods, materials and labor. This is likely to result to the development because for the different businesses to survive in the global markets, they will need to upgrade their products. This implies increased competition for different businesses enhancing development (Hopkins, 2004).  The implications of understanding the history and development of business and the nature of globalization The existence of international trade has enhanced understanding of the absolute trade advantage that exists when businesses from different countries produce commodities at low costs compared to other trading partners. Research reveals that there are gains that businesses obtain from trade as a result of globalization. For example, the comparative advantage enhances an understanding of business today because businesses can offer their goods and services at an opportunity cost and marginal cost that is low. This enhances the development of a business because of the extension exchanges that are mutually beneficial. An evaluation of the globalized business environment reveals that comparative advantage has enhanced competition between businesses leading to the development of businesses (Bridges, 2002). The implications of understanding of the history and development of business and the nature of globalization have had both advantages and disadvantages. Despite the operational improvements that have been experienced as a result of globalization, it is evident that there has been a decentralized fashion in the establishment of the economy. This is likely to affect the development of businesses today. The other challenge that the creation of international cooperation has posed to businesses today is the increased interaction it enhances for the employees of different companies. It is thought that this may cause problems for the businesses (Bridges, 2002). Globalization is thought to have led to the creation of disconnects between states and businesses. For example, it is thought that it has led to the creation public companies where the shareholders come from different countries causing the focus to be on the return of investments. It is thought that, despite the development, it is likely to enhance for the business; most of the decisions made will be based on the company’s interests and not the environmental and social needs of the country in which the business is located. The other problem that globalization has caused to businesses today is the establishment of a tipping point. This is thought to have caused the relocation of western businesses to low wage third world countries (Bridges, 2002). An understanding of the nature of globalization has led to the creation of economic blocks, trade agreements and special trade zones. For example, the creation of special economic zones has enhanced the development of businesses through the creation of economic laws that are free market oriented compared to the laws that govern a nation. It is thought that the creation of such structures is likely to enhance business development because of the increased foreign investments it creates among international businesses. The other implication of globalization is the creation of designated is of business where companies are normally taxed lightly this enhances the development of businesses because of the increased encouragement of economic activity (Bridges, 2002). The other implication of understanding the development of business and the nature of globalization is evident in the enhancement of economic independence. The other implication is evident in the creation of a capital flight. This is thought to be advantageous to the growth of businesses today in that it enhances the free flow of money and assets. Despite the free flow of money, it is evident that globalization has resulted to a liquidity crisis. This is evident when countries increase labour costs, tariffs and taxes causing a disturbance to most investors. This is likely to affect the development of a business as it results to the disappearance of wealth. The creation of capital flights is also an impact of globalization in that it poses a difficulty to market participants creating a difficulty in the location of trading partners. Research reveals that this is likely to cause limited participation of businesses or a decrease in cash because of the money that is normally held by the financial market participants. It is believed that this is likely to have an implication in business today as asset holders may have to sell their assets at prices that are below the long-term fundamental price (Bridges, 2002). Works cited Bridges, G. (2002). “Grounding Globalization: The Prospects and Perils of Linking Economic Processes of Globalization to Environmental Outcomes”. Economic Geography 78 (3): 361–386. Hopkins, A.G. (2004). Globalization in World History. London: Norton, pp. 4–8. Trompenaar, F. and Wooliams, P. (2003). Business Across Cultures. Chichester: Capstone Publishing Ltd. Read More