Globalization's Impact: Business and Government in a Global Context

This essay examines the evolving relationship between business and government in the context of globalization, driven by technological advancements. It argues that globalization, facilitated by the internet, social media, and e-commerce, has shifted power from governments to businesses. The essay explores how businesses leverage social media to evade taxation, navigate diverse cultural landscapes to influence regulations, and drive innovation, often at the expense of government control. The paper highlights the challenges governments face in regulating global businesses due to their expanding reach and the need for international governing bodies to address these issues effectively. It covers taxation, cultural exchange, rule-making, control over production, and consumer and employee protection, concluding that global businesses are increasingly able to operate beyond the reach of individual governments, necessitating a more coordinated global approach to regulation.

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BUSINESS AND GOVERNMENT IN GLOBAL CONTEXT
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Executive summary
It is true that advancement in technology has increased the connection between people
and states thus leading to globalization which has resulted in increasing shifting the power of
governments to the businesses. The sole responsibility of governments in the business world is to
control their activities through taxations or through implementations of rules and regulations that
govern the running and products of businesses. However this responsibility has been greatly
affected by globalization as the business have gone global whereby there is no solid ground or
rules that can be used to control the activities of businesses. Among many Technological
advancements in the business world that have led to globalization include, the emergence of use
of the e-commerce 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
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,
therefore governments have lost their power over them. For instance, governments can no longer
control the productivity activities of these businesses due to diversity, taxation has become
problematic, consumer and employee protection has been taken up by businesses and formation
of effective and sustainable rules and regulations that control and govern business activities. It
will be therefore advisable for the formation of more active international governing bodies that
will come up with effective strategies of controlling global businesses on a global context.
Introduction
Globalization is the process that has made the world become a global village in that the
once solid a guarded boundaries have become porous in that case there is ease in running of

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businesses. The process has been as a result of advanced technology in the world. For instance
the improvements of infrastructure in the field of telecommunication and increase in the use of
internet sources have resulted to interconnectivity and interdependence of the world markets,
businesses and individuals. It is important to note that the advancements in technology have
aided in the communication and movement of people around the globe for business ventures with
ease thus there is rapid exchange of ideas, culture and policies in the globe. The ease in exchange
of these aspects has greatly affected the rulings and operations of individual governments as it
has created a void of governance , meaning that power has been moved from governments to
businesses. This paper will focus on analyzing the aspects in which businesses have taken power
from the governments and the need for formation of more active international governmental
bodies that will be effective in controlling and governing the activities of businesses globally.
Social media platforms and government taxation
According to Sachs (2011), it is important to note that among the major roles of
government in businesses is taxation. The money governments attain from taxation of businesses
is used to increase the development and infrastructure of countries. However this has not been
the case in the recent era of technological advancement that has led to globalization. One of the
main technological advancements that have led to globalization is the increase and rapid use of
social media platforms such as Facebook, Twitter and Instagram among others as discussed by
Johnson and Turner (2010 pp. 434-455). According to studies, I agree that these platforms have a
very 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 carry
out their operations, advertise or market their products and also hire and recruit potential
members of their staff thus increasing their market coverage and size globally (Sachs,

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2011).When a business grows and develops globally, it gains exposure to different activities of
different 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 to
Wall (2012), some governments tax foreign businesses very lowly in bid to encourage their
establishment and growth so that the economies and unemployment rates in these countries can
be improved. In that case, when companies gain such information, they tend to concentrate more
on the countries where taxation rates are low and as a result they evade paying taxes in their own
countries. Therefore, globalization allows companies to choose the rates of taxation they are to
pay to any government thus in the long run we find that global businesses do not pay their taxes
and the governments cannot follow up because of the diversity and expansion acquired by the
businesses this being in accordance to Scherer and Palazzo, (2011).
In addition, I believe that government power to impose taxes has been compromised by
global businesses that use social media platforms to seek information on the countries that are
less developed and use the aspect of taxation to attract foreign investors. In that case, global
businesses find their way out of taxation by coercing governments around the world. For
instance, a less developed country may grow desperate to improve its economy so that it matches
those of other global countries and as a result let global businesses run within their borders on
the organization’s terms. In accordance to Kluz and Firlej (2016), the administration of the
business may come up with a term that it is allowed to work in the country without paying taxes
and due to the desperation of the particular country the government allows to the terms. It is
important to note that, the global businesses uses this strategy in several countries and their main
aim is to evade paying taxes through this approach. Consequently, businesses are run on their
own terms without being taxed as the governments have already lost the power to compel them

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to pay their taxes all due to globalization that has been caused by technology advancement that
has seen the increased use of social media platforms to gain different and diverse information
about the needs and growth of economies and their governments.
Internet use, cultural exchange and Rules and Regulation
Globalization has resulted to the interconnectivity of people in the world therefore flow
and exchange of culture and business ideas has been the order of the day. The interconnectivity
of global persons has been as a result of advancement in technology. I agree with studies that the
aspect of globalization that has been as a result of use of the internet and websites has affected
the ability of making rules and regulations that are effective by governments around the globe
According to Hughes and O’Neill, (2008), globalization enabled by use of the internet has made
the boundaries of the world porous therefore there is rapid exchange of cultural backgrounds and
values. It is important to note that different countries have different and diverse practices and
governments make rules and regulations governing business institutions basing them on the
cultural practices. In accordance to Bremmer (2014), Businesses going global experience a mix
in cultural practices as they end up employee workers from different countries. In such an event,
some cultures may favor running of businesses in a particular direction while some cultures are
opposed to it thus contradiction presents itself. To avoid such contradictions and conflicts that
may be as a result of cultural differences, businesses find strategies to integrate all the cultural
practices so that they can fit in all countries and their workers work in harmony (Rothkopf,
2012). However, this is not the case in governments because the process of making rules and
regulations cannot be compromised as a result of different cultures. As a matter of fact people
are supposed to follow the rules and regulations created by a certain government failure to which
they are held accountable as stated by Simerly (2000). However, on the contrary, in terms of

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diverse culture, global businesses are flexible and can work with any governments’ rules that
favor them whereas the rigidity of governments in the process of masking laws to control the
activities of businesses results to conflict of interest. In that case, the cultural diversity robs
governments stability and a solid grounds in which they can base their laws and regulations. In
that case, businesses are left with the power to control their activities as there are no effective
government rules and regulations put in place that can control them fully hence the power of the
government in making laws to govern businesses is shifted to global businesses.
Internet use, innovation and Control of business productions
According to Wall (2012), the internet has improved the movement of information and
ideas in the business world therefore businesses are growing in bounds and are effortlessly fitting
in the global markets. Exchange of ideas globally is resulting to insights on effective ways to run
businesses and achieve success in the globe. In that case, innovations are on the rise and are
being used in all aspects by global companies. Innovation is the transformation of business ideas
to strategies that can have a monetary value. In this case the use of the internet and websites is
increasingly allowing businesses to come up with different and diverse innovations that are
aiming at reducing their input and increasing their sales. When sales are increased, the profit
margins and revenue of businesses increase and as a result the size of the company physically
and financially increases important for business growth as discussed by Zwass (2003 pp. 7-37).
Some companies have grown over the years in countries all over the globe in that their profit and
revenue margins exceed budgets of some countries. In such an event, these companies may bride
their way into establishing branches in these countries and as a result, the businesses carry on
with business activities without being checked by the government. In some instances, the
businesses use the power they have attained through government bribery to make their own rules

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and regulations that are to be followed by all organizations in a particular country. The rules
made by these global businesses may not include consequences to be followed in the event of
production of fake goods or substandard goods. It is unfortunate most of these rules favor the
global foreign industries and workers while they adversely affect the running of local businesses
but the local government cannot regulate the emergent situation as its power has already been
taken through bribery. In addition, innovations that have been as a result of information
exchange due to extensive use of the internet and websites thus globalization have increased the
rate at which global businesses relate with each other. These relationships are advantageous to
the growth of businesses globally and some result to mergers as discussed by Henry and
Springborg (2010). Global mergers usually consist of different people and workers who have
different aspects and hold different views on the best ways to make the mergers successful. In
most cases, production of substandard goods and counterfeit products is usually an easy way out
to establish a quick ground in global markets because they are often issued at lower prices. In the
process of global merging, the involvement not of governments is not sort because different
governments hold different views on merging of companies in relation to their individual rules
and regulations that are rigid. In that case, the governments lose their power to control the
productivity by companies, and are not able to effectively control or wipe out substandard or
fake goods produced by companies therefore the power to control business activities is shifted
from governments to businesses.
Self-service and consumer and employee protection
According to Weill and Woerner, (2013 pp. 72-78), technological advancement in the
business world that has led to globalization has improvement of the relationship between
businesses and global customers and workers. One of the major responsibilities of governments

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is to protect their citizens and their employees from exploitation by businesses. However this
power has been taken by global businesses as a result of direct communication to administrators
through self service and satisfaction platforms and software. The self-service and satisfaction
software is used by global businesses to gain accesses to the needs and wants of their customers
and employees. Vilchez (2016) states that, some global businesses may feel the need not to heed
to their promises to their employees and customers because of their global nature hiding their
practices in the excuse of being global. For instance, consumer rights and employee privileges
differ from one country to another, so for global companies that are out to exploit consumers and
workers may take up the interests that favor the company only and provide explanation that it is
working under the guidance of a particular and different country (Falkner, 2017).Therefore as a
result, the activities of the global businesses against their workers or customers cannot be
attributed as wrong because probably they are acceptable in other countries. In short, global
businesses use self-service and satisfaction feedback platforms to their advantage. In this line of
thought, governments are not able to follow up the systems being used by global businesses to
cater and provide for customers and their workers this being as a result of the diversity the
companies have attained through globalization and the limitation of governments to follow up
the diversity due to their rigid aspect. Also, local governments do not have the ability to protect
global workers and global employees beyond these are areas beyond their jurisdiction in that
case the power to uphold employee protection and consumer rights are left at the mercy of global
businesses and snatched from governments.
Formation of international governing bodies
I am in total agreement with the formation of more powerful and more active
international governmental bodies that will have the ability to come up with rules and regulations

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that will control the activities of global businesses effectively efficiently and sufficiently. In that
case, strategies should be put in place to ensure that globalization also happens in governments.
The international governmental bodies should be come up with a system that will contain the
activities of global businesses as a result of advanced technology. For instance, these bodies
should ensure that all the rules and regulations governing the taxation of businesses are similar as
discussed by Goldin (2014). In that case, the global companies taking advantage of less
developed economies to evade taxation are contained and obliged to pay their taxes. In the event
that all the countries find it hard to take up the rules and regulations then the international body
should reserve its own international laws that will allow it follow the payment of taxes of each
global company. Secondly, the international governmental bodies should be formed in such a
way that all cultures of the world are closely integrated to reduce the aspect of contradictions or
conflict of interests in running or formation of business ventures despite the size of the company.
According to Vogel (2010 pp. 68-87), the international bodies will be expected to look deeper
into the actions and aims of the business in becoming global and close all the loophole provided
by culture for them to carry out businesses in unethical manner. For instance, when global
companies result to bribing governments of low economies so that they can carry out businesses
in their countries without taking heed to quality production and unnecessary competition that
cannot be controlled by these governments, international bodies should possess a power that they
can hinder government bribery instances despite the influence the business has on its economy
thus protecting the power of controlling local business from shifting to businesses from
governments. According to Goldin (2014), it is important to note that the formation of the
international bodies will be based on a global context therefore the rules and regulations they
will be based upon will reflect a global interest. In that case, the use of internet and website by

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global businesses to get information about other economies will be limited as the international
body will have used the same information to come up with rules and regulations that fit global
standards thus controlling the practices of global businesses. For instance, the body will take up
the different standards of different countries that aim at protecting the rights of consumers and
workers, integrate them together and come up with a solid ground and similar strategies that can
easily check the standard of goods being produced, the protection of rights and privileges of
workers and the protection of consumers globally. Also, the body will be obliged to come up
with strategies that follow up the activities and the information exchanged through self-service
and satisfaction feedback platform and software by the workers, consumers and the business thus
they will have the ability to control the way global businesses treat their employees and
consumers (Vogel, 2010 pp. 68-87).
Conclusion
Globalization has been as a result of advancement in technology thus businesses are
gaining more power and the governments are losing it. The increased use of the internet and
websites and social media platforms has resulted in an exchange of information and ideas by
global people thus businesses are gaining a global position. Attainment of global position is
compromising the ability of local governments to control the function and the operations of these
governments being as a result of the diversity they attain and the rigidity of the governments.
Innovations are being the order of the day for global businesses with the need to thrive globally
in that case, the businesses are growing in size and their financial ability is leading them to
coerce and bribe governments of low economies. In that case the rules and regulations governing
business activities become void as the new business entrants form a path that is to be followed by
the governments without interference. it is therefore important for the formation of more active

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international governing bodies that will base their operations on a global context so that they can
easily control the activities of the global companies, control their use of financial power on poor
economies and control their treatment to workers and consumers thus restoring the power of
governments in the field of controlling businesses despite their sizes or influence.

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