The Impact of Globalization on Business

Business 1
THE IMPACT OF GLOBALIZATON ON BUSINESS
Name
Institution
Course
Tutor
City/State
Date

Business 2
Introduction
Increased interaction between nations and continents has resulted into a situation where
management of businesses and other organizations is not done on the local level but rather
internationally. This results to globalization which can be translated to mean the integration of
various nations to work together for the common good of the world (Lewis 2016, p. 94).
Businesses are no longer being operated at the domestic level but rather they shoot to the
international level where consumers all over the world use its services and products.
It is quite surprising that most part of the globalization has been fostered by offshoring and
outsourcing of good and services to other oversea contractors. The introduction of these activities
has sped up the need of firms to operate globally (Beckers & Kawakami 2017, p. 23). Despite all
this improvement, globalization has got its impacts on the current business in that it can either
affect the positively or negatively.
Positive impacts of globalization on business today include the creation and rise in opportunities
among other benefits as indicated in appendix 1. With reference to Siemens Company, job
opportunities have been created by the firm in various countries that it deals with thus offering
source of income to many people all over the world (Berge 2012). This has led to the rise in the
rate of immigration as individuals are posted to work at different branches of the firm. This is an
opened opportunity to the firm and its stocks of competence which otherwise would not have
found seen any improvements in their lives economic wise. Some of the positive impacts
discussed below include technological advancement and other increased competition which work
in favor of the consumers. The negative impacts of globalization include production of generic
products in the market that may harm the health of the consumers and deter other genuine firms

Business 3
from participating well in the business. A fluctuation of currencies as the firm operates across
nations. This research is based on the Siemens Company which has been in operation for more
than 155 years since its incorporation.
Literature review
The market arena of this contemporary world calls for the dire need to conduct business across
countries and continents if an organization wishes to remain at the top of the game. This brings
us to the term globalization which is not a new word in the business world (Zammuto 2012,
p.34). Globalization refers to geographical expansion either through integration and interaction
of business organizations which have gone beyond their mother country to operate across nations
and cultures. This causes the firms to be called international businesses for they are not managed
locally by the nation. It can either be through the sale of goods or services to foreign countries
and consumers. Globalization does not just emerge from mere vacuum but rather through
outsourcing and offshoring (Davila 2016, p. 32). Outsourcing refers to giving or issuing out
contracts by one firm to another firm from the same country. Offshoring on the other hand refers
to the state where by a company outsources the contract oversees which can occur using
subcontractors. It mostly takes place when goods and services do not require direct activities of
interaction with the local market area thus hey are globalized.
Basing the research on Siemens Company based in Europe, we bring out clearly how offshoring
and outsourcing lead to globalization (Naomi & Tomohiko 2015, p. 45). This in turn opens
opportunities for growth of the firm but also raises threats that must be addressed for the firm to
remain competitive globally. Given the fact that the company has been there for more than 155
years, it has grown big and cannot be managed independently by executives from the same firm.

Business 4
The company engages in outsourcing services such as IT- intensive business process in Human
and financial services, maintenance of the hardware and software products, infrastructure
services among others. All this come from areas such as solutions for businesses, business
processing outsourcing, services that relate to operation and lastly product services.
Involvements in these kinds of businesses have opened doors for the company in relation to other
firms to see an opportunity of operating internationally instead of domestically (Beckers &
Kawakami 2017, p. 23). This is because the high demand of services by other companies is taken
as an opportunity or a niche in the international business arena thus opening door for
globalization arising from issuing of contracts.
According to the research on the Siemens Company, outsourcing and offshoring has opened a
global opportunity for the firm to operate in more than 192 countries in relation to various
continents. The firm outsources its services from European companies such as IBM, Fujistsu,
and caspita just to mention a few (Rae & Rowley 2011, p. 402). It leads to automatic
globalization of the firm since outsourcing and offshoring calls for global sale presence. The
involvement of the firm in the global business makes it to enjoy lots of benefits. With this in
mind, it implies that globalization impacts a firm both positively and negatively.
Positive impacts of globalization on business today include the creation and rise in opportunities.
With reference to Siemens Company, job opportunities have been created by the firm in various
countries that it deals with thus offering source of income to many people all over the world
(Berge 2012). This has led to the rise in the rate of immigration as individuals are posted to work
at different branches of the firm. This is an opened opportunity to the firm and its stocks of