Issues in Global Business - Coursework Example

Issues in Global Business Issues in Global Business Introduction Globalization is a complex that has had significant impacts on various fields like business, governance, and international development. It is, therefore, unsurprising that globalization has gained many emotive meanings and become a highly debated topic in current economic and political discourse. At one end, people perceive globalization as an irresistible and good force for creating economic prosperity to populations worldwide. At the other end, it is seen as a source of modern ills. However, it is impossible to deny that globalization has had a massive impact on commerce (Smith, 2013). The impacts have been largely positive, with most businesses taking advantage of greater economic freedoms cross-border trading to enhance cooperation and increase their presence. It is commonly accepted that the main features of globalization are the liberalization of global trade, the emergence of major cross-border financial flows, and the growth of FDI. This has led to increased competition in international markets (Telo, 2012). It is also widely accepted that this has resulted from the combined impact of two fundamental factors: the impact of new technology, particularly in the area of information and communications, and policy decisions to limit national barriers to global economic transactions. Discussion The cumulative and interactive effect of globalization has had a varying and significant impact on various economic sectors, categories of workers, business types, and social classes. The emergence of globalization is associated with the economic growth and capitalistic motivation to achieve growth by using existing resources and increasing the level of efficiency in which businesses conduct operations (Nakagawa, 2012). Consequently, globalization has also been closely linked with outsourcing operations in which businesses seek to transfer their current production units to different regions, where the salaries of the workforce are more financially sensitive. A current and widely researched aspect of such outsourcing operations has been the development of call centers in countries like India where large banking corporations have relocated their customer service support there (Weinstein, 2013). In addition, it is claimed how businesses strive to exploit the financial and regulative system between nations and that can vary to different degrees. The level of bureaucracy and the amount of taxes firms have to pay, for instance, varies between countries (Umemura, 2012). Developing nations provide less taxation compared to developed nations, and are keen on providing less bureaucratic constraints, with the effect of making them more viable targets. In addition, the growth of globalization is also linked to the fact that businesses must not be limited within the customers of one country for selling their services and products (Marmolejo, 2013). By targeting various clients as well as more markets, businesses can optimize their financial profits by attaining economies of scale. A vital feature of this is the standardization practices they adhere to and which are cost effective because business do not have to drastically alter the specifications of services or products. Consequently, by designing marketing and advertising procedures that are thought to satisfy the customers’ personal needs and culture, businesses can eliminate excess inventory and grow sales (Urata, 2012). Besides the above issues associated with globalization, it is vital to recognize how the term has been hard to define in most literature due to its plurality of meaning. The major advantages of globalization are associated with novel competing relations that are established between businesses, and which also help advance the customers’ needs by providing same or better services (Lohr and Wenzlhuemer, 2013). Businesses are thought to provide more competing value for the services and products that consumers pay for while maintaining equal quality levels and affordability. This is due to the pressure emanating from competition and that forces businesses to find more efficient approaches to managing their current resources. The fact that businesses are not constrained by their economic and geographical boundaries helps nurture opportunities for investors that may not have been feasible otherwise. For instance, it is clear how the technological development in Asian markets as part of providing more competitive salaries to businesses, has also led to a rapid growth of learning and education that enabled the development of new skills (Kumar and Quinn, 2012). The peoples’ collective learning is important in strengthening a nation’s knowledge economy and social capital, and this can positively affect the growth of the nation in the long term. As such, people may not recognize the necessity of immigrating to another nation in order to work/study with the outcome of helping maintain current employment rates (Weinstein, 2013). A complimentary impact to this is when people invest domestically. This contributes to the nation’s annual GDP. Moreover, there is also the issue of knowledge transfer that occurs when a business shifts its operations to another country. The business’ presence is contended to offer some form of “knowledge spillover effect” to national citizens. It is also argued how businesses are not only helped by the growing trends of globalization, but also how they are similarly being threatened by the concept (Lohr and Wenzlhuemer, 2013). This is due to the fact that the strategic scope between businesses is not only reliant on their poor or strong productivity in one market, and businesses cannot just outrival others by having knowledge of their results in a specific market niche (Kaplinsky, 2013). On the same vein, businesses can outrival competitors by identifying innovative approaches to production and by making better use of available resources. Consequently, the rich history of a corporation’s strong presence in a specific market does not offer assurance in that it will keep sustaining its growth. This means that businesses are facing the increasing pressure of creating innovative techniques of staying ahead of their rivals and, without depending on their current market share. In addition, businesses can make very diverse use of intangible or tangible resources via globalization practices. For instance, by minimizing operational costs in one country, businesses can optimize the marketability of their products and grow profits without compromising quality (Hill, 2014). In spite of this, it is also known that businesses operating in the service segment have faced more challenges in maintaining their clients’ trust when moving their operations offshore from manufacturing firms. In having offered a broad outlook of the benefits of globalization, it is now important to analyze three distinct dimensions that have encouraged businesses to embrace globalization (Lohr and Wenzlhuemer, 2013). The first aspect concerns standardization policies where the manufacturing and design processes enable the production of the same product. Such products are marketed to various consumers and in various countries with little or no change in their manufacturing. Standardization policies are especially dominant in food-related services and products. Companies have managed to minimize their operational expenses and focused on developing global brands or products that satisfy an average consumer’s needs. For instance, some economists cite how Unilever and Nestle are corporations that concentrated on homogenous consumption trends across nations and macro-regions (Lohr and Wenzlhuemer, 2013). By investing heavily in the advertisement and marketing aspect of the products and services, such firms strive to maintain the customers’ interest in the brand (Dunning, 2014). An example of a company that has employed this approach is Coca-Cola. The features of its products are always constant, regardless of where they are marketed. They are marketed as the same quality products across regional and international boundaries, allowing consumers to relate to them easily (Weinstein, 2013). Businesses that embrace globalization can also affect the consumers’ spending habits on a large scale. This notion signals the existence of power in firms that can manifest through their corporate international presence, and this is a problem that should be researched more in later studies (Weinstein, 2013). Porter argued that global firms that encourage standardization are threatened by substitute goods, and this is why they focus on marketing their brands so that customers can exhibit loyalty to the businesses and not just the service or product (Das, 2014). Besides standardization, another benefit of globalization is associated with the development of global value chains. This aspect plays a vital role in the operation activities of manufacturing-related businesses. The idea of global value chains is employed in the characterization of the development of various production components of a business, and which are partly liable for the production of various parts of a product. The development of such value chains has been partly driven by the fact that firms want to exploit countries’ tangible or intangible resources. It has also been driven by the need to spread out the risk of likely causes of failure that could be focused on one factory (Lohr and Wenzlhuemer, 2013). Nike has mainly exploited this benefit by distributing its design facilities in American or European countries and then operating the manufacturing components of the products in countries like India and China (Chorafas, 2012). In this context, the company sells its footwear products at premium prices despite the manufacturing costs being extremely cost-effective. Economists argue that today a dress may be designed in New York, made from material made in China and cut in South Korea, assembled in India, and finally distributed in Britain. Car manufacturers have also exploited such practices with the assembly factories spread across the world. Specific parts are made at factories with skilled labor and a rich history of quality of distinct production units (Cerra and Easterwood, 2013). For instance, car manufacturers can employ German facilities that focus on engine manufacture and assemble the cars in other regions. Another globalization trend which is beneficial to businesses is the financial relations that companies create with the financial segments in the countries in which they operate. Business can benefit from changes in between the economic policies between countries. For instance, issues concerning property rights, corporate governance policies and financial infrastructure, the management of work practices, or bureaucracy and taxation vary between such financial models (Weinstein, 2013). By creating links and knowledge while implementing such regulations, businesses develop experience and can always gain from them. The biggest disadvantage of globalization to businesses, which pales in comparison to the benefits it brings, involves the lack of a regulatory framework that manages business practices (Weinstein, 2013). Although corporations are subject to legal and social regulations on how they conduct their operations, the quest for economic expansion has demonstrated how workers can always become vulnerable beneficiaries of such operations (Caselli, 2012). Economic researchers and analysts state that a detailed assessment of the nexus between rapid, technologically enabled globalization and dysfunctional businesses reveals that the risks created by globalization inspire societal conspiracy perspectives and ambiguous commercial structures that enabled the development of criminal and dissonant conduct. The rapid pace of change and growth that defines business practices is not clear, and it is usually not effectively managed by public agencies (Lohr and Wenzlhuemer, 2013). Consequently, how businesses legitimize their operations becomes a politicized activity. At its core, there is not only a tussle for power between the employees and the management, but also between the businesses and governments’ policies (Ardalan, 2014). In this context, researchers argue for how a vital drawback of globalization is the unknown effect that businesses have on the environment. In addition, there are the organizational challenges that governments encounter when negotiating with such firms, and particularly within developing nations that pursue maximized capital investments. For example, Nike’s outsourcing operations seriously tainted its public reputation because of the way its management treated workers (Wheelen and Hunger, 2014). Consumers often avoided the firm’s products when they learned about such accusations. Conclusion The economic development and growth between businesses over the last three decades has indicated intensified pursuit of corporate economic growth, while using competitive strategies that transcend geographical boundaries. Businesses are no longer constrained within their geographical and economic limits for marketing their products and exploiting their capacity to optimize profits (Adams, 2013). The objective of this paper has been to evaluate the benefits of globalization against the costs, and to show that businesses have more to gain than to lose from globalization. The paper has focused on the economic advantages that are believed to be enjoyed by the different types of global trading, including their social impacts. This paper has argued how businesses can capitalize on globalization to expand across the world and grow their revenue. Even though people and business might benefit from the globalization trends, they are also socially threatened by it. This is because their statuses and perspectives of identity change impact how they relate within their communities (Weinstein, 2013). It also affects how businesses relate with their customers on a social level; that is why they need more corporate social responsibility to balance the benefits of globalization with social responsibility and brand loyalty. References Adams, F. (2013). Globalization, today and tomorrow. Abingdon, Oxon: Routledge. Ardalan, K. (2014). Understanding globalization: A multi-dimensional approach. Chicago: Transaction. Caselli, M. (2012). Trying to measure globalization experiences, critical issues and perspectives. Dordrecht: Springer. Cerra, A., & Easterwood, K. (2013). Transforming business big data, mobility, and globalization. Indianapolis, IN: Wiley. Chorafas, D. (2012). Globalizations limits conflicting national interests in trade and finance. Farnham, UK: Gower. Das, K. (2014). 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