Globalization and International Business - Essay Example

Business globalization involves a change in the business operations of a business from operating within geographical boundaries to operating in multiple counties.
b. Definition of International Business
International business entails all commercial transactions both governmental and private between parties that originate from two or more countries.
How globalization affects international business
Globalization affects international business by requiring firms to adopt new global strategies in terms of operations, distribution, sales, and marketing to ensure the success of the international business.
2. a. Why companies engage in international business
Companies engage in international business as a measure of accessing new markets for their unique products, accessing economies of scale, spreading R&D costs, and access to higher profits owing to some benefits of operating in the international market including low production cost, low competition, and fiscal & export incentives.
b. Why there has been an acceleration of international business
The growth of international business has accelerated due to economic liberalization in tariff structure and regulation owing to the actions of WTO allowing firms to set base internationally and still make profits without being affected by tariffs and regulations. The other reason acceleration of international business is breakthroughs in technology in terms of manufacturing, communication, and information, transportation technologies making the world a global village. The result has been the ability for mass production, a reduction in transport costs, and a reduction in the significance of distance as a factor in determining the country of operations. International economic integration, WTO & GATT, and the movement to free market systems are other reasons that have facilitated the acceleration of international business growth (Herrmann, May 2012).

3. a. Discuss the future of globalization
The future of globalization is that of the continued increase, especially in the education sector through global outreach of universities, student flows, migration of people, and systems for global food production. With increased interconnectedness, globalization will continue at a fast rate leading to the exchange of ideas, goods, jobs, and money. Augmented globalization in the future will result in easier access to information, increased volatility, and economic uncertainty.

b. Criticisms of globalization
The criticisms of globalization include that it has led to the devastation of the environment, unequal development of countries with the developed countries having a better advantage over developing countries, and neocolonialism. Other critics believe that globalization has been achieved at a cost of human rights, a rise in global terrorism, and international crimes spanning beyond geographical boundaries including Al-Qaida and Taliban (Wendy, January 2013).
4. Illustrate the different ways a company can accomplish its global objectives
A company can achieve global objectives by augmenting the complexity of the supply chain by increasing the distribution of goods to these countries and setting up operations in new countries. The choice of country of operation depends on low production costs, augmented market, and access to factors of production to result in increased profits. Motor vehicle companies often achieve global objectives by manufacturing parts in different low costs locations and shipping them to a central location for assembly to achieve the lowest costs augmenting profitability. Setting up operations in rapidly growing countries and where markets are easily accessible is another manner of achieving global objectives by firms.

5. Recognize the need to apply social science disciplines to understand how international and domestic business differ
Social science as a discipline aims at investigating individual behavior and the influences of individual behavior on the world. Social science is done by studying how people live in a society and the relationships among individuals. Social science as a discipline allows the understanding of the disparities between international and domestic business through the need for building new subsidiaries and offices in international business, which is not the case in domestic business (Herrmann, May 2012). Setting up operations beyond domestic boundaries requires social science to understand better the difference in country and corporate cultures, the need to know differences in language, and allow for communication with the customers and employees in the new area of international business. Other social needs for setting up international business include understanding communication styles, sub-cultural differences, and social behaviors of the society to allow for the success of the international business.