Implications of Globalization and Technology on Negotiation - Essay Example

? “The Implications of Globalization and Technology on Negotiation” Enter the Number or College of the 11th July, 2011 The Implications of Globalization and Technology on Negotiation: INTRODUCTION: Our world is dynamic in nature and it has become more advanced with the boom in technology and rapid globalization. These two factors have given an enormous boost in advancing the economies of the already developed countries to those which are termed as developing or under-developing countries. Globalization and technology has given a new direction to the international business all around the world. Acquisitions and mergers are the examples of globalization. The term globalization refers to the expansion and fusion of world’s economic order through various trade activities at international level which further help in lifting of other trade barriers. The basic aim behind globalization is to promote and increase the trading exercises among different countries. This leads to the equal distribution of material wealth, goods and services which enhances the remarkable growth in overall structure of the economy in any country. Furthermore, it also helps in building sound international relations as well as competition at different levels among different countries. Globalization has left its deep effects on regional economies, trading activities, policies, societies and cultures. It has given a new definition to terms such as communication, trade and transportation. It has been commonly thought that factors like technology, economy, politics and other socio-cultural have played an important role in coining the term known to the world now as “globalization” (Bhagwati, 2004). However on the other hand we cannot underestimate the importance of technology in today’s world of extreme modernization and advancement. Technology has played a vital role on the horizons of business and more specifically it has left its deeper impacts on international business. We cannot deny the fact the technology plays a significant role in shaping economic growth and giving rise to competitiveness. Technology has not only changed the mode of doing business today but it has also changed the mode of implementation of various strategies for running successful businesses to a greater extent. It has also been observed that technology is one of the basic driving factors after globalization in giving rise to various mergers and acquisitions all around the world. In years ahead, this technological advancement will lead to the increased demand in skilled and highly efficient workforce; higher growth in productivity as well as it would have its impact on changing the overall environment of businesses and other employment relations and activities (Berger, 2006). Furthermore, we cannot neglect the importance of rapid technological change as it will increase the international competition between the largest and most developed economies. This will enhance the need for more knowledge-based but skilled workforce to compete at international level for the survival of such economies in years to come. Some people see globalization and technological advancement as a threat for developing and under-developing countries due to their lack of resources and shattered economies. IMPACT OF GLOBALIZATION AND TECHNOLOGY ON NEGOTIATIONS: Now the question that rises over here is; how globalization and technology have their impact on negotiations and what changes are brought about by both of them? It is worth mentioning that globalization has given rise to tough international competition and in today’s world of advancement it has become a game of the survival for many growing economies and more specifically economies of the third-world countries are already considered as under-threat by such tough competition with technology as a second most important element collaborating directly in this game of survival (Stroper, 1992). The implication of globalization and technology on negotiations can be explained by a very simple example that due to globalization and advancement in technology majority of the well-known companies have shifted their manufacturing plants to China due to cheap labor and security. This major shift will effect greatly on the negotiations if any company wants to merge or acquire another one who already has its plants functioning in China. It is important to have a basic understanding of the term “negotiation” with context to international business. Business negotiations are the roots of developing a strong but successful international business relations with other entities through mutual dialogue and framing a set of policies to be followed mutually by both the parties agreeing on the terms and conditions defined. The nature of such business negotiations can be between the companies, between a company and a government, it could be only be some interpersonal interactions regarding any business affair such as mergers, joint-ventures, acquisitions or licensing (Weiss, 1993). Globalization and technology have grown rapidly due to these mergers, acquisitions and rise of multi-national corporations which have added not only a definite meaning to economical growth, created employment opportunities, enhanced competition and increased knowledge-based skill workers but they have also given a new direction for unlimited business opportunities particularly in third world countries where labor is cheap but resources are limited and economic growth is at zero. This new trend will help such countries to avail the opportunity and boost their economic development. The implications of globalization and technology on negotiations can further be explained by a simple example of China’s Air Cargo industry, the implication of globalization and technology on it and WTO’s accession to provide China with the services of the latest and more technologically improved other foreign air cargo logistic companies. As we already know that air cargo industry in China is shattered with limited market exposure for its operations. The industry being occupied by local players particularly with some government agencies provided with weak policy infra-structure. However, it was found out that the existing shattered air cargo system did not meet the basic requirement and need of the modern world which was imperative for the air cargo industry of China to meet the demands in order to stay in competition with the rest of the world. Analyzing the weaknesses in air cargo industry of China, there were many foreign companies who showed their interest because of China’s unlimited business potential and its geographical importance in the region make it viable for business negotiations with other foreign companies. In the whole process of changing the trend of its air cargo industry, China found out many issues such as domestic regulations, policy constraints, weak infrastructure and limited exposure coming in this process of change. Recently China’s accession in WTO solved many of its business matters and provided security and liberalization for the equal distribution of rights and levied many restrictions from it (Fung et., al, 2005). Finally this provided a platform to both the foreign air companies and to China to initiate and tie strong business knots among them which will provide a two-way prosperity to both the country and the investors in terms of exchange of more advanced technology, better employment opportunities, regional prosperity and strong economic development in the world. CONCLUSION: It has been concluded that globalization and technology have left their deeper impact on the overall international business structure giving rise to many opportunities and growth to many countries around the world including the developing and under developing countries which would result in strengthening their economic roots and also will help them to create unlimited opportunities for their people and developing sound international ties with the other nations. List of References: 1- Bhagwati, Jagdish (2004) – “In Defense of Globalization.” Oxford, New York: Oxford University Press. 2- Berger, S., (2006) - “How We Compete: What Companies around the World are Doing to Make it in Today’s Global Economy”, Random House, New York. 3- Michael Stroper (1992) – “The Limits to Globalization: Technology Districts and International Trade.” Economic Geography Vol.68, No. 1, Rational Choice, Collective Action, Technological Learning p.p. 60-93. Published by Clark University. 4- Weiss, S. E (1993) - “Analysis of Complex Negotiations in International Business.” The RBC Perspective. Organization Science 4(2): 269-300. 5- Michael Ka-Yiu Fung; Anming Zhang; Lawrence Chi-Kin Leung; Japhet Sebastian Law (2005) - “The Air Cargo Industry in China: Implications of Globalization and WTO Accession.” Transportation Journal; 44, 4; ABI/INFORM Global pg. 4 Read More