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Globalization's Impact on Government-Business Relations

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Added on  2021-06-15

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Among many Technological advancements in the business world that have led to globalization include, the emergence of use of the e-commerce platforms through use of internet and websites to carry out business activities and use of social media platforms, customer care and satisfaction software and many others. These advancements have increased the coverage of businesses in the world, increased innovation thus increasing competition and increased expansion in terms of market size and labor as a result of ease in cultural exchange, idea exchange and transformation and formation of international mergers,

Globalization's Impact on Government-Business Relations

   Added on 2021-06-15

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Business and Government in Global Context 1BUSINESS AND GOVERNMENT IN GLOBAL CONTEXTNameCourseProfessor’s nameInstitutionCityDateLine spacing: Double
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Business and Government in Global Context 2Executive summaryIt is true that advancement in technology has increased the connection between peopleand states thus leading to globalization which has resulted in increasing shifting the power ofgovernments to the businesses. The sole responsibility of governments in the business world is tocontrol their activities through taxations or through implementations of rules and regulations thatgovern the running and products of businesses. However this responsibility has been greatlyaffected by globalization as the business have gone global whereby there is no solid ground orrules that can be used to control the activities of businesses. Among many Technologicaladvancements in the business world that have led to globalization include, the emergence of useof the e-commerce through use of internet and websites to carry out business activities and useof social media platforms, customer care and satisfaction software and many others. Theseadvancements have increased the coverage of businesses in the world, increased innovation thuscompetition and increased expansion in terms of market size and labor as a result of ease incultural exchange, idea exchange and transformation and formation of international mergers,therefore governments have lost their power over them. For instance, governments can no longercontrol the productivity activities of these businesses due to diversity, taxation has becomeproblematic, consumer and employee protection has been taken up by businesses and formationof effective and sustainable rules and regulations that control and govern business activities. Itwill be therefore advisable for the formation of more active international governing bodies thatwill come up with effective strategies of controlling global businesses on a global context.IntroductionGlobalization is the process that has made the world become a global village in that theonce solid a guarded boundaries have become porous in that case there is ease in running of
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Business and Government in Global Context 3businesses. The process has been as a result of advanced technology in the world. For instancethe improvements of infrastructure in the field of telecommunication and increase in the use ofinternet sources have resulted to interconnectivity and interdependence of the world markets,businesses and individuals. It is important to note that the advancements in technology haveaided in the communication and movement of people around the globe for business ventures withease thus there is rapid exchange of ideas, culture and policies in the globe. The ease in exchangeof these aspects has greatly affected the rulings and operations of individual governments as ithas created a void of governance , meaning that power has been moved from governments tobusinesses. This paper will focus on analyzing the aspects in which businesses have taken powerfrom the governments and the need for formation of more active international governmentalbodies that will be effective in controlling and governing the activities of businesses globally.Social media platforms and government taxationAccording to Sachs (2011), it is important to note that among the major roles ofgovernment in businesses is taxation. The money governments attain from taxation of businessesis used to increase the development and infrastructure of countries. However this has not beenthe case in the recent era of technological advancement that has led to globalization. One of themain technological advancements that have led to globalization is the increase and rapid use ofsocial media platforms such as Facebook, Twitter and Instagram among others as discussed byJohnson and Turner (2010 pp. 434-455). According to studies, I agree that these platforms have avery large following of people around the globe and their influence on individuals in great.Therefore as a result, business ventures have taken up the use of social media platforms to carryout their operations, advertise or market their products and also hire and recruit potentialmembers of their staff thus increasing their market coverage and size globally (Sachs,
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Business and Government in Global Context 42011).When a business grows and develops globally, it gains exposure to different activities ofdifferent governments thus can easily dodge the follow up of its home government. For instance,different countries have different taxation rates on different types of businesses. According toWall (2012), some governments tax foreign businesses very lowly in bid to encourage theirestablishment and growth so that the economies and unemployment rates in these countries canbe improved. In that case, when companies gain such information, they tend to concentrate moreon the countries where taxation rates are low and as a result they evade paying taxes in their owncountries. Therefore, globalization allows companies to choose the rates of taxation they are topay to any government thus in the long run we find that global businesses do not pay their taxesand the governments cannot follow up because of the diversity and expansion acquired by thebusinesses this being in accordance to Scherer and Palazzo, (2011).In addition, I believe that government power to impose taxes has been compromised byglobal businesses that use social media platforms to seek information on the countries that areless developed and use the aspect of taxation to attract foreign investors. In that case, globalbusinesses find their way out of taxation by coercing governments around the world. Forinstance, a less developed country may grow desperate to improve its economy so that it matchesthose of other global countries and as a result let global businesses run within their borders onthe organization’s terms. In accordance to Kluz and Firlej (2016), the administration of thebusiness may come up with a term that it is allowed to work in the country without paying taxesand due to the desperation of the particular country the government allows to the terms. It isimportant to note that, the global businesses uses this strategy in several countries and their mainaim is to evade paying taxes through this approach. Consequently, businesses are run on theirown terms without being taxed as the governments have already lost the power to compel them
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