U11 Research Project: Globalization's Impact on Car Industry Business

This research report investigates the impact of globalization on the car industry, focusing on performance, quality, and revenue. It defines globalization in a business context, explores its effects on business activities, and examines both opportunities and threats in the global marketplace. The report reviews literature on globalization and business performance, covering definitions, theoretical background, and frameworks. It also proposes a research methodology, including exploratory research design, target population, sampling, data collection techniques, ethical considerations, and data analysis methods. The research aims to provide insights for businesses navigating the complexities of globalization, with a specific focus on the car industry's adaptation and strategic responses to global forces.

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Effect of the globalization on the Operation of Car Industry Business
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Table of Contents
Description of Research...................................................................................................................3
Significance of Research.................................................................................................................4
Literature Review............................................................................................................................5
Definitions....................................................................................................................................5
Forces of globalization.................................................................................................................8
Expansion of Containers Shipments.........................................................................................8
Technological change...............................................................................................................9
Economies of scales.................................................................................................................9
The difference in tax systems...................................................................................................9
Theoretical background................................................................................................................9
Car Industry performance and globalization..............................................................................10
Theoretical framework and hypothesis......................................................................................11
Global Marketplace Opportunities and Car Industry Operations..............................................12
Business expansion through a technological revolution........................................................13
Car quality and cheaper prices...............................................................................................13
Formation of new branches....................................................................................................14

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Free capital movement and goods transportation...................................................................15
International Trade and Profit................................................................................................16
Global Marketplace threats and business Operations................................................................16
Global market insecurity............................................................................................................17
Proposed Research Methodology..................................................................................................18
Introduction................................................................................................................................18
Exploratory Research design.....................................................................................................18
Target population.......................................................................................................................19
Sampling and Sampling design..................................................................................................19
Data collection...........................................................................................................................20
Data Collection Techniques.......................................................................................................20
Questionnaire..........................................................................................................................20
Ethical issues..............................................................................................................................21
Data analysis..............................................................................................................................21
Evaluation of Research Methodologies.........................................................................................22
Conclusions....................................................................................................................................22
List of References..........................................................................................................................24

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Description of Research
The business environmental operations tend to be complex, dynamic that has numerous impacts
on the organization. The business environ is broad and entails human, financial and physical
resources that determine the strength and weakens of the business. In some cases, the
environment tends to change due to many reasons, such as globalization. Over the past few
decades, globalization on the business performance has received global attention. It is estimated
that the economic contribution from the business operations covers about 65% of the GDP of
most of the countries in the world. For example, in East Asia, business organizations form the
significant players of the exporting industry thus accounts for about 45% (da Rosa, de Mello &
de Castro, 2018, p.76). Numerous authors view globalization as an opening of the international
borders that allow free movement of foreign investments, information, and technology, thus
facilitating the development of the country. According to Berge, (2012,p.5), the inter-linkage
between the nations occasioned by the high speed of social, economic, technological and
political is more complex as well as multifaceted phenomena. The paper thus aims at exploring
the impact of globalization on the car industry; with emphasis on the performance, quality and
quality, and revenue collection.
Globalization was initially regarded as approaches to the big business entities, however, in the
current world; both the small and medium business organizations get affected by the effects of
globalization. Certainly, globalization affects business performance in both negative and positive
ways, thus it is instrumental for small business to understand the concept of globalization to
enable them to remain relevant in the current competitive business world (Saeed, Zulfiqar &
Rathore, 2015, p.298). This paper thus explores the impact of globalization on business

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performance in various countries. The study aims at defining the term globalization with respect
to the business aspects, and explore the impacts of the globalization on the business activity; thus
on the performance of the business.
Significance of Research
First and foremost the study is beneficial to me as an individual as it enhances my understanding
on the globalization and its influence on both the local and universal business that will be
essential to both the class work and future professional career. Additionally, at the end of the
paper, I will be able to promote my research work performed. Secondly, the results of the paper
will significantly benefit the academia and researchers that are in the field of globalization and
international business since the study will add value to the existing international business and
globalization information. Thirdly, the information will be beneficial to the Car Industry and
other business organizations that are thinking of going global, since they will have extensive
information to help them determine the best decisions to make by evaluating past information.
Literature Review
The second chapter presents the literature review of globalization and business performance from
the past studies. The study entails definitions, theoretical background, and theoretical framework
and research gaps.
Definitions
It is observable globalization has numerous definitions depending on the context used. A good
number of globalization’s definitions are grounded on economic scopes similar to one accepted

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by the World Economic Forum. According to W .E. F, Globalization refers to the digital
revolution and economic development that are supported by the enhancement of communications
and transportation infrastructure, and elimination of capita transfer barriers (da Silva, Santos &
de Morales, 2017, p.77). On the same note, IMF refers to globalization as the interdependence of
the country’s economic status that results from the free movement of money across the borders.
According to globalization refers to the process of enhancing the inter-connection of social and
cultural aspects, gaining of the political interdependence, growth of economic status, integration
of the financial and market (Aman, 2018, p.568). For the purpose of the study, globalization thus
refers to the enhancement of the market and trade beyond the borders of a nation.
Small and medium-size business organizations refer to the organizations that are operating
within the boundaries of the country. The Car Industry plays weighty roles in increasing the
country's economy through asset creation, job opportunity provision, and innovation input. In
most of the countries, the large percentage of GDP is collected from the Car Industry, since they
are the most populated than the multinational business organizations. Jürges, Sahi, Rios, Reich,
Bhamra, Howard, Slater & Nick(2018,p.5) denotes that Car Industry do not only positively
impact the economic status of the country but also eliminate monopoly by the MNEs through
entry into the market, thus relieving them the power to determine prices of the different product.
A conceptual model of globalization on Car Industry
The conceptual model that describes the effect of globalization on the quality of life (QOL); the
model offers relevant understand the influence of globalization on the industry since it denotes

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globalization as the diffusing of products, services, capital, technology and workforce across
countries.
In the current world, globalization is a buzzword that has transformed numerous aspects of life,
business operations included. The constant integration growth of societies and national
economies thus has formed the basis of global discussion. Globalization aims at eroding the
national boundaries to integrate national economies, thus facilitating easy movement,
communication and capital transfer across the nations (Martens, Caselli, De Lombaerde, Figge &
Scholte, 2015, p.220). There are difference globalization concepts: political globalization,
financial globalization, cultural globalization, and economic globalization. For the purpose of the
study, the researcher covers the economic globalization that is interconnected to the globalization
of production, globalization of market, globalization of competitions, globalization of technology
and globalization of corporations and industries.
Globalization aims at increasing and developing countries status to achieve greatness through
interconnecting the exchange streams, enhancing technology, back, allowing free movement of
people, transforming the cultural composition and purchase behaviour, and among many others.
The constant growth needs a country’s’ needs such as workforce, quality of cars among others
tend to create a market space for acceptance of international goods thus developing the business
entity within the country. Evolving worldwide business thus is directly related to the speeding up
of global cooperation’s and practices; since the development of the overall transport and
correspondence business designs expands the dispersal of thoughts, products , data, capital, and

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individuals(Hagiu & Bărbulescu, 2017,p.186). Globalization may influence the improvement of
development capacities in the organizations.
Different impacts on the development abilities of the organizations incorporate the dissemination
of learning identified with licenses and other licensed innovation rights. With the transnational
enterprises, innovation interests in the organizations are expanding. The most critical explanation
behind finding universal corporate innovation exercises in the travel industry firms has prepared
their staff. Scattered innovation exercises of firms require superb correspondence, what's more,
other infrastructural offices. The nations looking to pull in innovation ventures ought to build up
such infrastructural offices on a need premise.
Figure 1: Shows the dimension of Economic Globalization, obtained from (Hagiu & Bărbulescu,
2017, p.186)

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Forces of globalization
Pandian, (2017,p.910) identifies majorly four forces of globalization: Macroeconomic such as
society’s rapid population growth and acceleration of technological transfer; political factors
include deregulation and trade liberalization ; organizational factors include global strategic
plans; and lastly the technological factors such as the improvement of the communication and
transport channel help in advancing the business activities.
Expansion of Containers Shipments
Over the past few years, the cost of shipping in the oceans has dramatically dropped as a result of
the containerization. The low cost of cauterization thus have enabled bulk shipping alongside
other efficiencies, thus it has made for the manufactures to bring car brands such as Fiesta close
to customers making the global market contestable.
Technological change
Due to the rapid sustainable technological advancement across the world, the cost of passing
information from one person to another in different geographical location has reduced, thus
making it very easy to gain information. The technological growth has enabled the car industry
production quality, quantity and quality as a result of the new strategic operations that are the
major source of convergence and divergence (Pavlínek, 2012, p.280). The application of
technology and innovation tends to vary across the countries, thus resulting in the varied car; for
example, Honda and Toyota have a similar manufacturing level of quality and quantity but differ
in the manufacturing practices. Honda assembling point is under one building that allows better
integration, while Toyota has separate assembling points.

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Economies of scales
Numerous economists believe that the increase in the minimum efficient scale in some industries
has increased (pirková, Stehlíková & Zúbková, 2016, p.1768). The rising of the small and
medium business tends to satisfy the selling requirements of the industries.
The difference in tax systems
The desire of business to gain from the minimum labour cost, production and distribution costs
has impacted business organization s to adjust the amount of tax to attract foreign investment.
Theoretical background
According to some historians, globalization dates back during the Maurya Empire in India
formation of the 320 BCE. Maurya Empire became the first societies to come up with a cross-
border business. The first international trade conducted by Maurya was between Europe and
Asia, thereafter in the second century BCE, China established the Silk Road that cut across Asia,
Persia, India, and Rome that facilitated both trade and religious organization’s movement.
Kwame, (2014, p.19) states that globalization was initiated through the environmental; aspects
such as the exchange of crops and animals between the communities that continued to develop
across the centuries. By 1300s, international trade was facilitated through ocean transport,
leading to slavery among many nations. During the 1700s, slavery formed the cultural
globalization after the entry of colonials into many African nations, however, the colonial during
the nineteenth and twentieth century, the slavery business deteriorated following the rise of new
nations with business relationships facilitating more international flow of goods. During the
twentieth century, most of the nation’s begun to utilize the resources to build a military for

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protection and settle international disputes; thus prompting the establishment of the World Bank
followed by the International Monetary Funds in 1945 and 1947 respectively. These
organizations were aimed to assist in the regulation of the economic relationship among the
countries. In the past few years, the development of radio, television, and internet facilitated the
information passage across the world thus speeding the globalization rate.
Car Industry performance and globalization
Car Industry in different countries is affected by the globalization in the same manner but
address the effects differently to remain relevant in both the local and international markets. The
most common approach adopted by business organizations are the: acquisitions of the local
government support in safeguarding them against stiff competition from the international
business organizations; and clustering into one category to enhance competitive
advantage(Solticzky & Bíró,2013,p.28). The car industries have made tremendous development
and growth as a result of globalization According to James and Steger (2014, p.19) car industry
is characterized by the multi-country region production of spare parts; some of the regions
include NAFTA, MERCOSUR, and ASEAN among many others. In the past years like between
170s, the car manufacturing sites were majorly constructed based on the incentives, however,
with the development of the consumer markets across the world, the car industry production sites
intensified in many regions.
Theoretical framework and hypothesis
The study aims at identifying the impacts of the globalization on the business performance, thus
the drawing will occur from the environmental organization literature. However, because of the

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numerous environmental dimensions, extensive exploration must take place to understand, and to
reduce conceptual ambiguity (Blanton & Blanton, 2016, p.665). Among the major environmental
conceptualizations: macro-envelopment, task environment, resources pool, aggregation, and sub-
envelopment, the paper thus focuses on the macro-environment or the globalization. The macro-
environment tends to be the most significant environmental conceptualization since it
encompasses both the lower and the higher constructs stated above.
The business environment offers numerous resources that directly or indirectly influence the
growth and sustenance of the business in the market. Thus the major three sub-dimensions of the
environmental dimensions include capacity; growth/decline; opportunities/threats. According to
Kochuthara, (2014, p.57) during globalization, business organizations are directly or indirectly
affected by these sub-dimensions, thus the study hypothesis that there is a candid association
amid globalization’s dimensions and the business performance as shown in the figure.