Managing across Borders: Impact of Globalization on Business Environment

This paper discusses the concept of globalization and its impact on the business environment. It explores the contribution of outsourcing and offshoring in globalization and analyzes globalization activities in Coca-Cola. The paper also highlights the challenges and opportunities of globalization.

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Managing across Borders 1
Abstract
The objective of managing across border paper is to let the reader attain details about the process
of globalization prevailing in the environment. Globalization refers to the act of making the
world diverse by interacting with people who are present beyond the geographical boundaries of
an organization. This process majorly affects the business environment in both positive and
negative way. It is crucial for the manager to analyse this concept of globalization and then
perform their business functions according. The report details about the contribution of
outsourcing and offshoring on globalization and analysis of globalization activities in Coca-Cola.
The problem and opportunities of the company are defined to get view that how this process
affects various organizations in the environment.

Managing across Borders 2
Contents
Introduction......................................................................................................................................2
Globalization....................................................................................................................................2
Impact of Globalization on Today’s Business Environment...........................................................3
Facts that International Managers should know..............................................................................5
Contribution of Outsourcing and Offshoring in Globalization........................................................6
Analysis of Globalization in Coca-Cola..........................................................................................7
Challenges....................................................................................................................................7
Opportunities...............................................................................................................................8
Problems......................................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The purpose of this paper is to enlighten the reader with the details about the meaning of
globalization in today’s business environment. Globalization refers to the economic action under
which people started interacting with each other by resolving the boundaries present in the
environment. The process of globalization strongly affected trade of goods and services in the
business environment. Globalization has both positive and negative impact on trade and today’s
business environment. Further, below mentioned report highlight the details about the facts about
the globalization and factors that international managers should keep in mind while initiating
globalization strategies in business (Crane, et. al., 2019). Contribution of outsourcing and
offshoring on globalization is discussed in the paper along with the analysis of globalization
activities in Coca-Cola Company. It should be noted that globalization on one hand provide the
opportunity to expand the scope of business and on the other hand increase the competition in the
environment. More details about the concept and its application is discussed below:
Globalization
OECD defined globalization as the geographic dispersion of the industrial and service activities
and uniting the people, companies and governments worldwide to come and work together. The
process of globalization is an economic process of interaction and integration of the social and
cultural aspects present in the worldwide environment. The process of globalization makes the
environment open and flat as it provides opportunities to the companies present to come and
interact with organizations present in diverse geographical location. The process of globalization
provides opportunities to people work and take advantage of facilities beyond their geographical
locations. Introduction of Information Technology in the business environment has given rise to
activities of globalization in the environment (Djelic, and Quack 2018).
Internet holds the power to connect people present in different time zones that help in improving
the process of globalization as well. Globalization is a multi-faced phenomenon that helps both
the parties initiating interaction in the environment. It helps in creating links in the environment
and integrating several things for the better functioning of the environment. The process of
globalization is the intensification and interdependence on the cross border bodies so as to create

Managing across Borders 4
national wealth (Charles, Schmidheiny, and Watts 2017). The trade system has become better
with the initiation of globalization in the international environment. With the introduction of this
type of process, the business units get the advantage to make use of resource present in different
parts of the world and align them together for the successful initiation of work. Globalization has
four dimensions, that are economic, social, political and cultural and the economic dimension is
the most crucial dimension that focuses on changing in the monetary markets and financial
services. The process of globalization reduces the costing of goods and services as the companies
can easily procure the resources directly from the location without intervention of intermediaries.
Globalization also gives rise to creativity and innovation in the business environment by making
diverse minds come together to achieve same motive (Meyer 2017).
This process also improves the standard of living of the people as international interaction
provides benefits to both the parties performing it. However, globalization increases several
challenges in the environment as well. This process eliminates the cultural values present in
diverse environment and makes it difficult for people to survive. Job mobility is another factor
that reduces the competence of several nations, as young and educated people of the country shift
abroad countries like US, UK etc. in search of job due to which growth of own nation stagnates
(Peng 2016).
Impact of Globalization on Today’s Business Environment
Globalization is a leading concept that has become a source of several benefits as well as issues
in the business environment. The business environment has changed and become diverse from
the last decade due to introduction of globalization in the external environment. As discussed
above that the process of globalization affects the lifestyle of people, economy and the business
life as well. In today’s business environment, the companies have started getting assistance and
support from other organization due to introduction of globalization. This process has eliminated
the boundaries and restriction from the trading environment. It gives importance to business
transactions in the worldwide environment (Kopnina, and Blewitt 2018).
Globalization helps the companies to interact with organizations that are present far beyond their
geographical locations, like a company present in Australia can easily communicate with other
organization present in New Zealand market. In this way, profitability of both the organizations

Managing across Borders 5
increases as both the companies share their resources and earn. The globalization process has
eliminated several political disputes and trade complications present between several countries as
well. For instance, Russia is very powerful country but it has poor terms with Southeast Europe
so Europe will reduce the opportunity to interact with Russia and earn in the environment
(Hamilton, and Webster 2018).
Thus, introduction of globalization gives advantage to the countries to resolve their matters and
come under an agreement to communicate on legal terms and initiate import and export activities
in the environment as well. Further, globalization provides opportunities to companies to grow
and expand their scope of business in international markets. Companies like Zara, Walmart, and
Colgate etc. have attained such differential position in the market due to their global presence.
Thus, it should be noted that globalization in today’s environment provide opportunity to
companies to grow and attain profitability as well (Adekola, and Sergi 2016).
Globalization also initiates the exchange of technology in the environment. This process helps
the organization to improve the quality of their goods and costing as well by making use of
technology in the business environment. Use of latest technology helps the organization in
increase the satisfaction level of the customers and eliminating the heavy costs as well.
Technology also helps in sharing of information in the business environment due to which
people get to know about different ways and innovative techniques to persuade their business
activities. Transfer of information is the transfer of most importance and expensive resource in
the business environment (Hirst, Thompson, and Bromley 2015). Use of knowledge and
information can make a company succeed in the international environment. For instance,
information about the corporate social responsibility helps the organization to increase their level
of satisfaction in the business environment.
Lastly, it should be noted that most severe impact of globalization in the business environment is
occurrence of high degree of competition in the environment. The process of globalization
reduced the monopoly of several companies’ presence in diverse industries as now international
companies can easily enter in different prospective markets. Globalization leads to high degree
of competition as now all small, medium and large organizations get to compete with each other
at same platform. The market has become flat due to which all companies make use of available
resources and technologies in the environment to initiate sales and succeed (Meyer, and Peng

Managing across Borders 6
2016). Customers get several choices in the environment due to which competence of companies
has started to reduce. Further, trouble of small and medium companies has increased as now
these companies get to compete with the organization that already have an identified position in
the target market. Customers’ expectations from the brand has started to increase because they
have seen several differential features of different products due to which they have started
expecting more from brand which they tend to give their loyalty. Thus, it should be noted that
these are the major impacts of globalization on today’s business environment (Erixon 2018).
Facts that International Managers should know
Globalization can be a gift or a curse for the organizations in the international business
environment. It entirely depends on how the business manages it in the external environment,
therefore, it is crucial for the management of the company to know facts about the process of
globalization so that they can effectively manage it and attain benefits out of it. Furthermore,
below mentioned are the facts related to globalization that the managers need to focus:
Labor Conflict: multinationalization and globalization has created mobility and flexibility of
human resource in the business environment due to which it is important for the international
managers to implement effective human resource management strategies in the environment. It
should be noted that not all the people present in international organization possess same interest
due to difference in background and thinking; thus, it is important for the international manager
to analyse the behaviour of the employees and focus on resolving the boundaries while
respecting every culture present in workplace environment (Sethi 2016). The managers should
implement cross-cultural training so as to get information about different cultures and
simultaneously retain the expatriates by satisfying them in the business environment.
Availability of Resource: technology is the aspect that is not equally available in all the nations.
Just like technology, there are many other resources that are present in home nation of the
company but are costly available in the host nation. Thus, it should be noted that before entering
in the international market, it is important for the manager to consider the availability of the
resources and the regulations prevailing in the nation (Müller, and Hoppstadius 2017).

Managing across Borders 7
Balance in Payments and Compensation: It is crucial for the manager to compensate the
employees according to economic trends prevailing in the host as well as home nation. For
instance, an expatriate coming from China to US should also get equal pay according to US
standards irrespective of the fact that cost of living in China is low. Thus, it should be noted that
it is important to maintain a balance I the payments and compensation given to the employees of
the company (Popescu, and Stoica 2015).
Positioning of Business: As discussed above that the process of globalization welcomes several
companies in the existing business environment. Due to which it is important for the managers to
know that they need to create a differential position of the company in the target market so as
that entrance of any other organization does not affect the existing sales of the organization.
Furthermore, it should also be noted that when own business is expanding abroad, then also
positioning strategy of the business should be focused upon because in that way customers create
a mind-set about the products and services of the company. In this way, globalization will not
negatively affect the growth and the profitability of the company in the external environment
(Ainscough, Shank, and Reichgelt 2019).
Contribution of Outsourcing and Offshoring in Globalization
Outsourcing refers to the process in which an organization comes into contract with another
organization (3rd party) so as to get their work done by them. Further, offshoring refers to the
process of getting the work done by another organization belonging to a different country.
Outsourcing and offshoring process are all same, the only difference between them is that in the
process of outsourcing the organization contracts with another organization belonging to same
geographical location and offshoring involves company belonging to different country. These
processes of business have helped many organizations to get work and survive in the business
environment. Several companies like Dell, Nike, IBM etc. outsource and offshore their work so
as to increase their effectiveness in the business environment (Rodríguez, and Nieto, 2017).
The process of outsourcing and offshoring helps the multinational companies to segregate the
pressure of work to another organization. In this way, they get things done effectively without
pressurizing their employees in the workplace environment. Whereas, outsourcing and
offshoring helps the other parties by providing them work and employment. Nike pays a good

Managing across Borders 8
sum to company to whom their outsource and offshore their work. Thus, in this way, work is
segregated in the environment and not restricted to single organization. With the sharing of work,
income is also shared as Nike provide a share of their income of the company to which they
outsource their work. The process of offshoring is conducted in the environment because of low
labour cost in the environment. Thus, it should be noted that with the initiation of this process,
the employees of the international market get the expertise by working with the companies like
Nike (Hansen, Larsen, and Larsen 2016).
This process helps in making the people of diverse small companies capable in the environment.
Companies of developed countries come to the developing countries like India for getting the
work done at lower rates. This provides the advantage to multinational companies to reduce their
burden at low rates in the market and it provides employment to the people of India and expertise
in several fields as well. Thus, it should be noted that outsourcing and offshoring plays a lead in
training the people of different locations and sharing the work as well. This process helps the
multinational organizations in segregating the work to companies of different areas due to which
the rate of employment is increased and the employees get to learn more as well. This process
helps the countries to develop, people to become competent and enhancement of international
relations as well (Pekkala Kerr, Maczulskij, and Maliranta 2016). Talking about the
disadvantages of this process, it should be noted that outsourcing decreasing the control of the
organization on their business functions and leaks price sensitive information of the company.
Risk of security and quality increases and timeframe of complete of activities also increases.
Financial burden is also increased as the company need to pay to the outsourcing organization as
well.
Analysis of Globalization in Coca-Cola
Challenges
The company Coca-Cola is 126 years old and still growing but it would be wrong to say that the
company had not faced any globalization challenges in growing. The initial challenge that the
company faced related to globalization was the problem of uniformity. Positive brand image of
an organization is formed when the organization provides the products and services that they
promise to the customer. However, the organization was facing the problem of uniformity in the

Managing across Borders 9
environment. There was no uniformity in the looks of the bottles and the packages of products of
Coca-Cola. Resulting in which, the customers started attaining mixed feelings that the brand is
fake. Secondly, it should be noted that globalization caused a problem for the company in
analysing the interest of the customers and expectations of the brand in the business environment
(Steenkamp 2019).
Three years after the new coke debacle, the shares of the company started to reduce because of
the customers of some regions started avoiding carbonate drinks in the environment. Thus, it
should be noted that difference in the expectation of the customers from the brand makes it
difficult for the organization Coca-Cola to analyse the mind-set of the customers and provide
them products and services differently. The company also faced advertising challenge in the
business environment that affected its sales and profitability in the external international
environment. The Coca-Cola advertisements shocked the customers at several international
locations due to which they started avoiding the products of the company in the market. Thus,
these are few issues of globalization that the organization faced in the international business
environment (Rajan 2016). However, it should be noted that irrespective of the challenges the
company Coca-Cola is still progressing with great speed in the business environment.
Opportunities
As the company Coca-Cola entered in the global market in the most appropriate manner that
opened doors for the organization to implement its activities in the external environment. The
company effectively promoted the brand in several events like Olympics etc. that brought up
several franchisee partners for the organization and with the help of them, the organization
performed the globalization activity. This company Coca-Cola is world’s largest beverage
company that is progressively growing with its range of non-alcoholic beverages in the market.
Talking about the opportunities present with the company Coca-Cola, it should be noted that the
organization has diversification opportunity in the environment. The company has already
captured the market using beverages but they can increase their product line by severing food
products as well. This segment can help the organization to target more customers in the target
market. Secondly, it should be noted that the company is already present in the worldwide
market but still there is scope of the company to settle in location where the customers will get
delighted to get carbonated drinks (Anwar 2018).

Managing across Borders 10
The company can setup their outlet at different locations so as to avoid extra charges and serve
the demand effectively as well. Thirdly, it should be noted that the organization gains the
opportunity to improve the supply chain process by effectively making use of globalization
aspect in the environment. It should be noted that the company could avoid the cost of
transportation and distribution. They can possibly improve the supply chain activities in the
environment by decentralizing the functions and sharing the responsibilities as well (Crawford,
et. al., 2017).
Problems
With the process of globalization, company faced several criticisms in the environment as well.
The company Coca-Cola faced environmental issues in the market that affected its growth. The
company serve beverages to the customers in bottles that are made of non-degradable substance
resulting in which level of satisfaction of the customers reduces in the business environment. The
organization makes use of ineffective CSR techniques in the environment that harms the nature
and environment. Secondly, the company also faced the human rights issues in the environment
that affected its long term growth in the environment (Kayaba, Boyraz, and Derdiyok 2017).
The activities of the business risk the actual and potential health of the employees, resulting in
which the employee turnover rate started increasing in the environment. Along with the bottling
and packaging issue, the company also faced the problem of water use in the environment. The
company use water quantity more than expected which started decline the water quantity given
to the local farmers of that area. Thus, these are few problems faced by the organization Coca-
Cola in international business environment (Samiee 2019).
Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the
aforementioned paper highlighted details about the globalization and its impact on the business
environment. Globalization refers to the process making the world flat and increasing the
international interactions in the environment as well. The impact of globalization on today’s
business environment along with contribution of outsourcing and offshoring activities in
globalization is discussed in the paper. The facts that the international managers should consider
are also given along with the analysis of the globalization activities of a beverage company

Managing across Borders 11
Coca-Cola in the international business environment. It should be noted that globalization is
important activities in today’s environment as it provide opportunities to the companies to grow
and expand their scope of business as well.

Managing across Borders 12
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Managing across Borders 13
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