Question-   Analysis of the Emerging Global Arena

Solution-

Analysis of the Emerging Global Arena

Globalization:Globalization is the process by which businesses or other organizations develop international influence or start operating on an international scale.It differs at worldwide level, at the level of a specific country and at the level of a specific industry.It is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.Likewise, for centuries, people and corporations have invested in enterprises in other countries.

Global Company:There are arguments regarding the definition of Global Company.There is a fact that globality is a multi-dimensional phenomenon and can never be understood fully from just one perspective.In a sentence, a Global Company is a company which operates in at least one country other than its origin.

Four Dimensions of Corporate Globality:

  • Globalization of Market Presence
  • Globalization of Supply Chain
  • Globalization of Capital Base
  • Globalization of Corporate Mindset

Globalization of Market Presence:In this dimension, companies target customers in all major markets.Within the same industry, globalization of market presence can range from relatively low to high.

Globalization of Supply Chains: In this dimension, companies expand their business to the location where they can make their maximum profit, then less than the previous location, after that less than the previous location and it goes on.

Globalization of Capital Base:In this dimension, companies intend to target the most optimal sources of capital.

Globalization of Corporate Mindset: Corporations create a correlation between culture and markets with an ability to integrate across the diversity of them.According to the article, some key outcome indicators of the globalization of a company are:international dispersion of revenue, international dispersion of asset base, intra-firm trade in intermediate and finished goods, and intra-firm flows of technology.

What is Driving Globalization:Globalization occurs because specific managers in specific companies make decisionsGlobalization is becoming increasingly feasible and desirable.Free market ideology, technical advances, shifting of economic center of gravity, opening of borders to trade, investment, and technology transfers-these are the main reasons why globalization occurs.

Why Globalization is Here to Stay:Globalization has changed the world economy forever.Globalization has caused reduction of poverty rate since the capital mainly comes from a few rich families in international trades.Moreover, technological progress is also an effect of globalization.

Key Features of the Digital Economy:Mobile Communication, E-mail communication etc. has put a great impact on globalization.It is no wonder Internets is a blessing for globalization.The usage of internet and other technological equipment results in the benefit of business.

Impact of the Digitization on the Global Landscape: In Business, Digitization has enhanced access to customers, ability to create information-based products.Digitization ensures transparency of information and increased ability to access technology, ideas, and talent from around the world.Moreover, it also has decreased transaction cost.

Globalization for Companies:Every company must keep pace with the dynamic changes in environment.Companies should be unique while adapting those changes so that they can have some extra advantages in this competitive world.There are some fundamental changes in world’s economic landscape which are considered as inevitable.These trends may help companies to bring changes in their steps which should be taken by thinking of future.

Globalization for Managers: A company’s future depends on how it is getting managed in national and cultural borders.With this rapid change in world’s economy, a manager must adapt global knowledge, skills and experience.Formal education regarding development of language skills, knowledge regarding diverse market and culture can help them in this competitive world.Participation in cross-border terms and projects depict coordination with company’s activities across border.Immersion experience in foreign culture can also be another quality.

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