The Effect of Globalization on Business

This report highlights different arguments from credible sources to compare and contrast present literature on effects of globalization on business. The study contributed by various authors show that globalisation has many implications for business strategies and businesses that are able to respond global changes are the ones who will survive and flourish in future.

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WHAT IS THE EFFECT OF GLOBALIZATION ON BUSINESS?

WHAT IS THE EFFECT OF GLOBALIZATION ON BUSINESS?
Table of Contents
Introduction................................................................................................................................2
Critical analysis..........................................................................................................................2
Conclusion..................................................................................................................................4
References..................................................................................................................................6
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WHAT IS THE EFFECT OF GLOBALIZATION ON BUSINESS?
Introduction
Globalization provides various opportunities for businesses and at the same time, new
challenges are also been introduced where companies need to adapt competent strategies to
achieve success in global marketplace. Moreover, global trend imposes many requirements in
the organisations to enhance their competitiveness for realising success in local as well as
international market (Katerina & Aneta, 2014). This report will highlight different arguments
from credible sources to compare and contrast present literature on effects of globalization on
business. The study contributed by various authors show that globalisation has many
implications for business strategies and businesses that are able to respond global changes are
the ones who will survive and flourish in future.
Critical analysis
Fundamentally, globalisation has changed how business were conducted and
visualised before which means, the effect of globalisation on business is both extensive and
pervasive. Therefore, Muciimi & Ngumo (2014) asserts that existing global business
approaches must be reviewed innovatively where all the business strategies require
configuration of resources as per changing global environment which can meet international
market demand and fulfil stakeholders’ expectations. Similarly, Savrul & Incekara (2015)
reveals that a comprehensive transformation of economic development due to globalisation
resulted in generalization of international market economy, circulation of information, people
and product, increase in production and implementation of technology in contemporary
business. Nations have not remained self-sufficient and therefore, they included international
trade at diversified levels to sell what is been produced and obtain what are needed by them.
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WHAT IS THE EFFECT OF GLOBALIZATION ON BUSINESS?
Such countries usually produce more than required in economic sectors than their trade
partners.
Arguably, Witt (2019) claims that negative effects of globalization have made de-
globalization apparent in future that would induce many qualitative shifts in behaviour and
strategies now observed in international business. The research conducted by the author on
two theories of globalization from political perspectives, realism and liberalism predicts de-
globalization that have led different expectations for world economy in future. Where
liberalism reveals patchwork of economic connections, realism predicts rise of economic
blocks around various countries. Comparatively, Edwin & Okpara (2015) stressed that
globalization of business has although opened new avenues like employment and wider
market, it creates disparity in economic development and structural employment. Developed
countries firm’s move their factories to under-developed or developing nations where labours
are available in cheap rates. Such policies generate higher revenues for the host country
thereby creating wider gap among both developing and developed nations.
On contrary, Mahmutović, Hadžiahmetović & Talović (2014) claims that
globalization has brought many opportunities for business and it simultaneously pushes them
to increase competitiveness by providing access to various necessary factors that can help
them in building enhanced competitive capabilities. However, the author also suggests that to
sustain in new global business environment, businesses must constantly develop and enhance
their competitive advantages rather than depending upon other inherited and comparative
advantages. This is significant as competitive advantage has become temporary due to
globalization effects and can be easily lost by companies for example, if the firm advances by
20%, overall competition may get advanced by 30%. Even Muciimi & Ngumo (2014) asserts
that globalization have affected international business operations considerably and therefore
globalization related strategies must be developed in away that can help multinational
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organizations flourish and survive in international markets. The authors also emphasised
upon significance behind being responsive to market conditions in local environment as they
can lead to strategic imperatives that can be used in global marketing rather than depending
totally upon standardization only. Global operations can be tailored to maximise efficiency
for long-term development however, effectiveness in local market shall remain inevitable for
gaining sustainable factors and thus business must “think global” and “act local” (Muciimi &
Ngumo, 2014, p. 69).
Conclusion
The above essay reveals that globalization is been defined as every commercial
transaction taking place in general that occurs between two or more countries or regions
beyond political boundaries. After analysing present literature on effects of globalization in
business it can be said that worldwide global changes seen in economic, political and
business activities have made many business organisations struggle for survival due to which
they have to constantly go out of their territories and change business strategies. Competitive
pressure, limited market, dynamics of post-modern age and cheaper resources demands has
forced business leaders shift their traditional targets towards alternative measures to enter into
global markets and survive successfully in future (Katerina & Aneta, 2014). Moreover,
greater restrictions on investments and trade accompanied by global developments have made
many researchers anti-globalists as they believe that globalization has negative effects upon
businesses especially in developing nations. This is because of imperialistic tendencies in
which developing economies remains dependent on dominant power in terms of employment
and economic development (Witt, 2019). Nevertheless, most of the current literature claims
that globalization has brought many positive changes in business operations where firms are
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been given access to superior technology, manpower, resources, trade opportunities and
forces that are beyond political boundaries. Globalization of business is been referred to as
openness to greater world by such thinkers as they consider globalization as a new trend that
can promote growth in businesses as well as in country economics by converting the world
into one global village.
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References
Edwin, A. & Okpara, A., 2015. Strategic review of the impact of globalization on the
sustainability of communities and business organisations. International Journal of Business
and Management Invention, 4(4), pp. 55-62.
Katerina, R. & Aneta, R., 2014. The Impact of Globalization on the Business. Economic
Analysis, 47(3-4), pp. 83-89.
Mahmutović, H., Hadžiahmetović, A. & Talović, S., 2014. Globalization Oportunities and
their Implications on Business Operations and Competetivenessof Companies in Bosnia and
Herzegovina. Asian Economic and Financial Review, 4(11), pp. 1638-1652.
Muciimi, E. N. & Ngumo, E. M., 2014. Implications of Globalization for International
Business Strategy: A Multi-Sectoral Approach. International Journal of Science and
Research, 3(4), pp. 68-78.
Savrul, M. & Incekara, A., 2015. The Effect of Globalization on International Trade: The
Black Sea Economic Cooperation Case. [Online]
Available at: https://www.avekon.org/papers/1374.pdf
[Accessed 09 06 2019].
Witt, M. A., 2019. De-globalization: Theories, predictions, and opportunities for international
business research. Journal of International Business Studies, pp. 1-25.
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