Business and Globalisation - Essay Example

A third reason is the arrival of the information age, with computers and the internet which means that people and businesses can receive instant news about developments all across the world. New links, for example between raw material suppliers, manufacturers and markets for finished products can be spotted, created and managed very easily. Some people think that it is a very positive phenomenon, for example Dehasa (2006) who believes that this increased circulation of goods across the world will be a win-win situation, and that everyone will make money from it.

Others see that there are also disadvantages, for example Steglitz (2002) who points out that when a small business, or a community which depends on one or two main products comes into a much bigger market, then it has very little control over what happens in that market. In countries like Colombia, for example, with its dependence on coffee production through the first half of the twentieth century, exporting their goods was a great benefit for a while, so long as the price of coffee was high and people in other countries wanted to buy it.

There are problems, however, when for example competition grows and the price drops, or when major buyers get involved in war, for example, and the demand is suddenly no longer there. This kind of event can be absorbed in a bigger and more diverse business field, but it can be devastating to smaller or tightly focused business areas. There is also a significant inequality between developed countries, who often set the quality standards and the prices, and less developed countries, who have very little choice in the deals that are set up.

A further dimension of globalisation is the effect that it has on the world’s resources, and this includes both materials for production, and the environment in which these materials are produced. Some resources, like the hardwood forests of the Amazon, are limited in size and the destruction of rainforests may bring short term gains for businesses, both in South America and in the countries where their trading partners are, but there will be longer term effects which are potentially serious for the whole world.

When business is international, crossing national boundaries and involving transnational organisations and multi-national companies, then it is often hard to see who should be responsible for the effect on the planet. Many companies have good ethical policies which prevent extreme damage from occurring, but there are also many others which exploit scarce resources with no thought for the consequences on the earth, or on local people. One of the ways that these issues can be addressed is to combine globalisation with sustainable development.

This can work with renewable resources like wood, but it is not a solution for finite resources like oil and some rare minerals and metals. If a business wants to take advantage of globalisation, then it must make very careful preparations before launching into a big venture. People use terms like “the global village” to refer to the way that the world is increasingly connected, but very often there are huge cultural differences that make true communication very difficult (Brysk, 2000). A good example of this is the