Fundamental of International Buisness - Essay Example

Fundamental of International Business The basic sphere of globalisation is the international economic system, i.e. global manufacture, national economies and the world market. The arguments proposed by opponents of globalisation have no merit, because globalisation process proposes great opportunities for Southeast Asia market helping to overcome economic crisis looms. Today, capital movements become the key driving forces and production is uncoupled from employment. In general, the processes of globalization include: "changes in societies and the world economy that result from dramatically increased internatiohal trade and cultural exchange.

It describes the increase of trade and investing due to the falling of barriers and the interdependence of countries, particularly trade liberalisation or "free trade" (Globalization, 2005). So, the main driven forces of the Southeast Asia market include political, social and economic changes. Political driven forces were caused by changes in political doctrines. Primarily, a struggle between socialist and capitalist countries is over (Buckley, Ghauri, 1999). If we assume that "the essence of globalization is a subordination of human rights, labor rights, consumer right" (Ralph Nader), we should accept the view that trade and market relations is nothing more than subordination of human rights.

But it is not true. To support this point of view, it is possible to use the theory of Adam Smith who wrote that markets function without conscious control because individuals take their private decisions in response to publicly-known signals (Himmelweit, et al. 2001). It is possible to agree that American and European companies create jobs overseas at the expense of domestic jobs, which does not break the rights of workers from the poorest countries. In addition, the globalization of industries has created surplus production capacity on a massive scale.

Proposition of quality products which compete with the national brands does not humiliate consumers rights. Quite the contrary, every consumer has the right to buy and use quality products which do not harm (Tayeb, 2000). It is possible to agree that "there is no guarantee that globalization will necessary helps people". On the other hand, without globalization the poorest countries will be deprived from such opportunities as innovations and technological changes, FDI and free trade. They will not be able to compete on the global market and renovate and restructure their economies.

The process of globalization increases rates of growth of economies, it brings new developments such as opening up of markets in developing and emergent economies, technical changes that are creating new opportunities to sell and identification of long-term economic and demographic factors that are altering demand patterns (Emmott, Crook, Michlethwait, 2002). FDI Confidences Index shows that investments give great opportunities to less developed countries to maintain a stable economic growth and be able to compete on the global scale (FDI Confidences Index, 2004).

For instance, a detergent plant opened by the company will create new jobs for thousand of people in a particular region. The government of the country will receive additional inflows (taxes). Technologies used by the American (European) companies are usually cheaper and more environmentally safe than traditional manufacturing in Southeast Asia countries, and the products are of high quality than those proposed by the national suppliers. Globalization does not "homogenizing" the world, but brings new perspectives to low developed countries helping them to speed their economic development.

In any case, cultural diversity in Multinational enterprises should be managed in order to overcome cultural differences and create healthy climate in the company. It is possible to conclude that new ideas and technologies do not destroy neither cultures nor languages aiming to increase revenue per capita and reduce the risk of crisis which usually has an impact on global economic situation, because recent years, the global economy becomes a dominant one while individual countries do not play a significant role in global market.

If a production function exhibits increasing returns to scale then higher growth rate should generate rising real living standards for the community as a whole. The principle of territorial integrity retreats before a principle of the right of nations on self-determination ever more. References1. Buckley, P.J. Ghauri, P.N. (1999). The global Challenge for Multinational Enterprise. 2. Emmott B., Crook C., Michlethwait J. (2002). Globalisation: Making Sense of an Integrating World, Economist Books.3. "Globalization".

From Wikipedia, the free encyclopedia. (2005). Available at: http://en.wikipedia.org/wiki/Globalisation4. "FDI Confidences Index" The Global Business Policy Council,( 2004). October Vol.7. Available at: www.atkearney.com/shared_res/pdf/FDICIOct_2004_S.pdf5. Himmelweit, s. et al. (2001). Microeconomics: Neoclassical and Institutional Perspectives on Economic Behaviour. Thomson Learning.6. Tayeb M. (2000). International Business: Theories, Policies and Practices, Harlow, Pearson Education.