The Dynamics of International Business in an Era of Globalization

This essay provides an overview of international business and globalization, defining globalization as the process by which firms organize their structure, resources, and people with a global perspective. It highlights the role of reduced trade barriers and advancements in transportation and communication in fostering globalization. The essay discusses the four aspects of globalization according to the International Monetary Fund: trade and transactions, capital and investment movements, migration, and knowledge diffusion. It further explores the three major areas of globalization—economic, cultural, and political—and the strategic drivers and facilitators behind them. The causes and impacts of globalization are examined, including the increase in international trade, technological advancements, and the role of international organizations. The essay also addresses the negative impacts of globalization, such as increased competition, job losses, and environmental concerns, alongside the positive impacts, including economic boosts, technological advancements, and cultural exposure. Finally, it touches on emerging trends in international business, such as crowd funding, remote workforces, eLearning, and live video advertising.

Running head: INTERNATIONAL BUSINESS AND GLOBALIZATION
International Business and Globalization
Name of the Student
Name of the University
Author Note

1INTERNATIONAL BUSINESS AND GLOBALIZATION
The term Globalization comes from the word globalize. Globalization is a process by
which firms organizes the structure, capabilities, resources and people, viewing the world as one
market. Globalization happens when the trade barriers between countries are removed thereby
helping to transfer goods, labour force, capital etc from one country to another in a fast, efficient
and effective way (Giddens, 2018). Advances in transportation, advances made in the field of
communication like the internet have increased connectivity all over the world and have led to an
increase in globalization between countries around the world. The world today is now a global
village, wherein trade is carried out between all countries. Globalization thus helps to unite the
world.
According to the International Monetary Fund, there are four aspects of globalization
such as trade and transactions, capital and investment movements, migration and movement of
people and the diffusion of knowledge ( Pieterse, 2015).
I feel before going global, one should define one’s business plan. Since it takes time to
build a large global enterprise, one should be patient. One should also build a company website
to advertise one’s product and services and for implementing one’s international plan. One
should conduct research to identify one’s target markets because market research is extremely
essential for exploring and identifying the fastest growing market for one’s product.
The use of various technologies helps multi-national companies maintain customers and
suppliers on a world-wide basis. Globalization is important because companies must realize that
the success of their business depends on efficiency and being able to do business in the global
market thereby expanding the reach of the company.

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There are three major areas of globalization. They are Economic globalization, Cultural
or Social globalization and Political globalization. The removal of trade barriers between
countries so that there is no hindrance in the flow of goods, capital, services and labour is called
Economic Globalization (Pieterse, 2015).
Cultural globalization refers to the process wherein the attitudes, experiences and values
of one’s culture are disseminated throughout the world. It refers to the idea that there is now a
single global culture that is promoted by the internet etc. and shapes the perceptions and
aspirations of people around the world, irrespective of where they might reside in the world.
Political globalization refers to the belief that ‘umbrella’ global organization are better placed to
prevent conflicts than individual states. The creation of the United Nation is an example of
political globalization ( Pieterse, 2015). The strategic drivers of Globalization are to acquire
supplies and resources, to secure and expand markets, to leverage core competencies and to
better compete with rivals (Kolk, 2016 ).
The facilitators of globalization are reduction of barriers to trade and investment,
reduction and removal of tariffs. The World Bank also plays an important role to facilitate
globalization. Technological factors have also facilitated globalization by reducing the time it
takes to communicate and faster and cheaper transportation have also played a role in facilitating
globalization (Giddens, 2018).
The causes and impact of globalization include international trade which has increased
substantially over the years due to globalization which has in turn led to higher economic growth
in several countries. Technological factors like the internet and mobile phones have facilitated
globalization because they help multi-national companies to operate all over the world.

3INTERNATIONAL BUSINESS AND GLOBALIZATION
Improvement in transportation like the development of refrigerated and container transport has
allowed the movement of goods around the world, which has facilitated globalization.
International organizations like the World Bank, International Monetary Fund and the World
Trade Organizations also promote free trade and globalization (Giddens 2018). The growth of
big multinational companies has facilitated globalization and is an effect of globalization. The
investment of multinational companies in farms, mines and factories have also assisted
globalization. Multinational companies are able to sell their goods and conduct business all over
the world due to globalization. Due to globalization, all kinds of food are available throughout
the year and is not tied to any season and we can procure any type of food in any time of the
year. Globalization has led to an increase in trade. Increase in trade means an increase in the
number of transport which in turn leads to the use of more fossil fuels thereby causing pollution
and global warming (Meyer & Peng, 2016). The key activities of a global firm include a direct
import and export of goods and services, direct investment of foreign companies, international
licensing and franchising, alliances, partnerships and joint ventures and international
management contracts. (Ghemawat, 2016)
The negative impact of globalization includes higher competition from foreign
multinational companies wherein the foreign multinational companies remove local competition
and thereby force local firms to close down. Globalization also leads to a low market share,
wherein in an open market situation, there is a possibility of losing a customer to foreign
multinational companies. Globalization also leads to unemployment and loss of jobs due to
increased competition for jobs with foreigners. Due to globalization, developed countries have an
advantage over developing countries in terms of financial and technological advancements.
Globalization also uses finite resources like coal and fossil fuels more quickly. Globalization

4INTERNATIONAL BUSINESS AND GLOBALIZATION
increases the emission of carbon dioxide into the atmosphere thereby causing air pollution.
Globalization also leads to global warming. Over-fishing of the oceans is also linked with
globalization (Cavusgil et al., 2014).
The positive impact of globalization includes a boost to the economy of a country as
bigger markets generate more income. Globalization also leads to technological advancement as
countries around the world adopt new technology in order to stay competitive and vie for a place
at the top. Globalization also leads to an exposure of different cultures, which in turn leads to
companies adopting new ideas and improvising on existing services. Globalization also leads to
an increase in job opportunities and the possibility of living and working abroad (Intriligator,
2017).
One of the major trends in international business is crowd funding. The remote workforce
is another global trend affecting international business. Due to increased connectivity and
advances in communication like video calls, webinars etc we have the option to hire people who
do not live in the same country, and pay them online. Training through eLearning is also very
popular, flexible and inexpensive and also advertising via live video. Social networks like
Facebook provides an option for an user to go live by means of a live video stream which allows
companies to advertise in a way that gives the users an “in the moment experience” which makes
them feel included (Rodricks 2018). Thus I feel that these are some of the trends that will impact
international business in 2018.

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