Globalization and Transformation - Essay Example

Reflective Portfolio Table of Contents Discussion and Critical Analysis 3 2.Overall Reflection on the Module 7 Reference list 10 Discussion and Critical Analysis The scope of Global Marketing evolves when the organizations decides to sell their goods by conducting international trade with other nations (Meunier, 2007). The reduced trade barriers and increased international trade between the nations influences the organizations of both developed as well as the developing nations to participate in trade activities. A company is able to gain an easier access to the international markets with wider range of supply of products and the firms would have an opportunity for future growth (Disdier and Head, 2008). Thus it must take part in the international markets in order to improve their efficiency in producing wide range of goods for their customers. However the participation of the company in the global market also depends on the comparative advantage of the firms that is the firms can export goods in which the firm specialises as well it needs to consider the cultural as well as the political issues of the trading partners. The entrepreneurs within a market focus on technological progress. Through internalisation a new product can be known that the firm may produce and then export the goods to other countries. (Ethier, 2005; Hoekstra and Hung, 2005). The products produced by the firms also depend on the demands of the customers and the entrepreneurs apply various strategies related to internalisation in order to increase the production capacity of the firms. International trade links the home and the host countries through the export and the import of goods that take place. The main factors that play a key role in promoting the globalisation within the economy are the technological innovation that brings in a change within the economy, economic and political changes that take place. The technological innovation within the economy enhances the transportation and communication process at low costs. A large investment in the road infrastructure allowed greater share of trade to be conducted by trucks moving between North America and Western Europe (Lane and Milesi-Ferretti, 2008). The shifting of the coal miners towards oil and gas industry is also considered as an important element of Globalisation. The currencies were convertible and the balance of payment restrictions was eliminated. The birth of the Euro Dollar market in the global economy was a move towards the availability of the international liquidity and the cross border trade relations that was set up in Western Europe (Chen, 2006). The organizations are expected to carry out the exchange of goods so as to promote international trade between nations. However they need to be careful with the fluctuations in exchange rates. The multinational enterprises within the economy promote international trade through the Foreign Direct Investment that they carry out in other countries. The enterprises plan to expand their business by making some investments in other countries that they find profitable. The multinational companies and the licensed joint ventures that take place between organizations bring in highly advanced technologies as well as the superior means for producing that leads to a higher productivity in the domestic economy (Phene and Almeida, 2008). The technological innovation brought by the multinational companies contributes to the rise in production levels and the increase in the imports and exports between the trading partners. The multinational companies undertake joint ventures in order to expand their business in the international markets and also to have control over the new technologies. The joint ventures are important for the companies as they can handle new projects. The multinational firms often form subsidiaries such that they trade with other parts of the world and undertakes franchising that is the firms can follow their own business model and tge brand that they produced over a period of time (Dahan, Doh and Guay, 2006). However the government has created a set of rules for the multinational corporations which are known as the Trade Related Investment Measures (TRIMs) which were created to reduce the ability of the government to impose export and import requirement on the multinational companies (Narula and Dunning, 2010). There are multinational companies that are seen to exploit the resources of the developing countries but can introduce efficient technologies in industrial sectors. Nonetheless the multinational enterprises are reactive to the domestic political issues in order to develop healthy industrial processes that bring in development within the economy. Hence they need to overcome the challenges and set up their reputations in the international markets. International trade between countries is said to bring in globalisation by the import and export of goods between the developed and the developing countries (Woodward, Skrbis and Bean, 2008). With the agreements in trade and liberalization there has been a transformation of culture between the trading partners as globalisation has brought advanced technologies to the economy. Hall suggested that the culture can be categorised in high as well as low context. The culture within the multinational organization of developed countries is of high context. However the cultures of the emerging economies on which the companies invest in order to expand their business are of the low context. Cultural factors also depend on the Hofstede’s individualism vs collectivism which considers the people of various backgrounds who participate in the globalisation process. The corporate culture within a country depends on the computers and electronic gadgets and hence it has reduced the human labour. Though depending on electronic gadgets has accelerated the production processes in the economy but it has also resulted in the problems of unemployment that is the companies are adopting technologies which are operated electronically and thus reducing the manpower (Randeria, 2007). The impact of globalisation has been severe in the developing economies as the multinational enterprises invest in emerging economies the infrastructure in the educational institution as well as the hospitals increases but it becomes difficult for the poor people to afford such improved technology (Young, et al., 2006). Thus it creates a cultural difference between the rich and the poor as the poor people cannot afford the services offered by the multinational enterprises. As a result despite bringing in technological advancement, the globalisation also has a negative impact on the culture and tradition of the nations. However it is recommended to the organizations participating in the international markets that they utilise the positive impacts of globalisation that contributes to the company’s future growth prospect. The political issues that affect globalisation are the reduced trade barriers among the trading partners that promote the export and import of goods and services. There was a treaty designed to promote international trade within the countries which is known as the General Agreement on Tariff and Trade (GATT) which is used to promote free trade by reducing the tariff as well as the non-tariff barriers. Tariffs are considered as the tax levied on the traded goods that the importers have to pay in order to import goods (Banks, 2008). The revision of the treaty also provided explanation regarding the intellectual property rights which is used to protect the goods produced by the companies through the use of trademarks and copyrights. However the GATT failed to enforce the world trade rules. World Trade Organization is an organization that promotes the international trade by following various rules and regulations (Benson and Saguy, 2005). The trade that WTO promotes involves three goals that are to ensure the free flow of trade, to negotiate the further trade opportunities and settle the trade conflicts among the member countries of WTO (Benson and Saguy, 2005; Kriesi, et al., 2006). 2. Overall Reflection on the Module I had an interest in studying various aspects of the globalisation and so I conducted a study on the impacts of globalisation on the various organizations. I decided to study about the strategies political and legal issues faced by the trading partners because it would provide me a lot of knowledge regarding the strategies adopted by the companies in order to participate in the international trade. My study reveals the trading partners have comparative advantage on one particular good and exports that good. However, the reduced trade barrier has further promoted international trade among nations which also resulted in the future development of the nations. I have learnt that the multinational companies help in promoting international trade by carrying out foreign direct investments in the developing countries which has been beneficial to some extent for the countries to follow a path of development but the highly improved infrastructure proves to be expensive for the poor people in the economy. I learnt that globalisation can be beneficial as well as harmful to the society. However according to me the globalisation is necessary for the emerging economies because with the improved techniques the countries can enhance their production levels such that they can export large amount of goods to the developed countries. My study suggests that globalisation brings in interconnection between nations and they can compete with each other which helps in future growth prospect of the companies. There were treaties signed by the countries like GATT that reduces the trade barriers and promotes free trade within the economy. The free trade in turn strengthens the relationship within the trading partners. It seems to me that the countries participate not only in international trade but also regional trade due to the restrictions imposed on participating in the trade activities. The assignment has helped me to gain some knowledge regarding the impact of globalisation on the cultural diversity. The globalisation brings in multinational companies to emerging economies in order to develop infrastructure that would contribute to the progress of the developing economies. Hence the research carried out by me was quite helpful to enhance my knowledge related to the issues of Globalisation. My study indicates that the political environment within the economy plays a key role in affecting the trade that takes place and the import and export of goods are decided based on the tax imposed on the goods. In case there is free trade the exchange of goods takes place smoothly between the nations but in order to control the excess demand within the economy the government of the trading nations impose tax on the goods and services exported to other countries. I got to know that globalisation is essential for the growth of the developing nations. By having trade relations with the developed nation the emerging economies can undertake technological advancement by adopting specialised techniques. Through this study I even gathered knowledge regarding the disadvantages that globalisation brings in the economy that is the high cost techniques used by the multinational firms in producing goods for a vast population. In case of multispecialty hospitals the treatment has become so advanced that even the harmful diseases like cancer are cured through various new treatment processes and advanced techniques. However these techniques are very expensive and unaffordable for the poor people. My analysis has revealed that most of the poor families in the developing as well as the less developed economies die due to the lack of treatment and mostly the low income groups cannot afford to undertake such costly treatments. However the study carried out by me was a good learning experience for and I plan to use my knowledge and experience in future to carry out further analysis on the impacts of globalisation. The impact of globalisation has advantageous to some of the organizations as they could bring in technological advancement within them in order to compete with their rivals. I can create my presentation on the impacts of globalisation and the strategies that the organizations have adopted to set up their reputation in the international markets. My study has also provided me knowledge regarding the comparative advantages of different countries and the kind of trade relations the nations have maintained within them. I plan to carry out a thorough study in future on the global marketing context and this analysis would help me to form a base for my future study. It has also helped me to develop the analysing skills that I can utilise in future to set up my career growth path. Reference list Banks, J. A., 2008. Diversity, group identity, and citizenship education in a global age. Educational researcher, 37(3), pp. 129-139. Benson, R. and Saguy, A. C., 2005. Constructing social problems in an age of globalization: A French-American comparison. American Sociological Review, 70(2), pp. 233-259. Chen, Y. C., 2006. Changing the Shanghai Innovation Systems The Role of Multinational Corporations R&D Centres. Science Technology & Society, 11(1), pp. 67-107. Dahan, N., Doh, J. and Guay, T., 2006. The role of multinational corporations in transnational institution building: A policy network perspective. Human Relations, 59(11), pp. 1571-1600. Disdier, A. C. and Head, K., 2008. The puzzling persistence of the distance effect on bilateral trade. The Review of Economics and statistics, 90(1), pp. 37-48. Ethier, W. J., 2005. Globalization, globalisation: trade, technology, and wages.International Review of Economics & Finance, 14(3), pp. 237-258. Hoekstra, A. Y. and Hung, P. Q., 2005. Globalisation of water resources: international virtual water flows in relation to crop trade. Global environmental change, 15(1), pp. 45-56. Kriesi, H., Grande, E., Lachat, R., Dolezal, M., Bornschier, S. and Frey, T. 2006. Globalization and the transformation of the national political space: Six European countries compared. European Journal of Political Research, 45(6), pp. 921-956. Lane, P. R. and Milesi-Ferretti, G. M., 2008. International investment patterns.The Review of Economics and Statistics, 90(3), pp. 538-549. Meunier, S., 2007. Managing Globalization? The EU in International Trade Negotiations. JCMS: Journal of Common Market Studies, 45(4), pp. 905-926. Narula, R. and Dunning, J. H., 2010. Multinational enterprises, development and globalization: some clarifications and a research agenda. Oxford Development Studies, 38(3), pp. 263-287. Phene, A. and Almeida, P., 2008. Innovation in multinational subsidiaries: The role of knowledge assimilation and subsidiary capabilities. Journal of International Business Studies, 39(5), pp. 901-919. Randeria, S., 2007. The State of Globalization Legal Plurality, Overlapping Sovereignties and Ambiguous Alliances between Civil Society and the Cunning State in India. Theory, Culture & Society, 24(1), pp. 1-33. Woodward, I., Skrbis, Z. and Bean, C., 2008. Attitudes towards globalization and cosmopolitanism: cultural diversity, personal consumption and the national economy. The British journal of sociology, 59(2), pp. 207-226. Young, O. R., Berkhout, F., Gallopin, G. C., Janssen, M. A., Ostrom, E. and van der Leeuw, S., 2006. The globalization of socio-ecological systems: an agenda for scientific research. Global Environmental Change, 16(3), pp. 304-316. Read More