International Business Report: Globalization, Trade, and Society

This report on international business delves into the multifaceted aspects of global commerce. It begins by outlining the reasons behind globalization and the benefits of free trade, highlighting their impact on international business practices. The report then explores cultural dimensions, including the characteristics of cultures with high power distance, and the management implications arising from cultural differences, using the GLOBE cultural framework and Hofstede model. Furthermore, it examines various types of economic systems, such as traditional, market, command, and mixed economies, and analyzes their effects on organizational structures. The report also addresses the issue of social inequalities and their implications for multinational corporations. Finally, it differentiates between teleological and deontological ethical theories. The report concludes by summarizing the key findings and providing relevant references.

International Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Reasons of globalisation.............................................................................................................1
Benefits of free trade...................................................................................................................1
Features of cultures high on power distance...............................................................................1
Management implications with cultures.....................................................................................1
Globe cultural framework...........................................................................................................2
TASK 2...........................................................................................................................................2
Types of economic system..........................................................................................................2
Effects of economic system on organisation...............................................................................2
Social inequalities.......................................................................................................................3
Difference between teleological and deontology theory.............................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
International business means when company carries out its activities outside the
boundary of home/ parent country (Dunning, 2012). This project will explain Hofstede model,
types of economic systems and its effect on society and social inequalities, and what implication
does social inequalities have for multinationals.
TASK 1
Reasons of globalisation
 Improved transport, making global travel easier.
 For improving technology which makes it easier to communicate and share information
around the world.
 Reduced tariff barriers
 For raising mobility of capital and labour.
Benefits of free trade
Free trade means when organisations are doing import and export without any tariff barrier.
It helps to all countries because-
 It usually boosts the quality of life for a nation because it provides more options or
opportunities to consumers.
 It develops innovation because the flow of trade circulates new ideas.
 It minimizes the corruption in country.
Features of cultures high on power distance
In this people are dependent on person who have strong power.
 Society doesn't question the decision of leader and there is no close relationship between
people and leaders who only want to earn more money.
 In society, there are inequalities among people and unequal distribution of power
(Minkov and Hofstede, 2011).
Management implications with cultures
They are similar in some respect and different in others. Dimensions can be grouped in
following way-
1

 Society selects that way to cope with the inherent uncertainty of living. In this Hofstede
identifies three dimensions like masculinity, uncertainty avoidance and power distance.
 Hofstede differentiates between a long-term versus short-term orientation (Folsom and
et.al., 2012).
Globe cultural framework
Globe means “Global Leadership and Organisational Behaviour Effectiveness”. It is
research programme extended Hofstede 's work by investing cross cultural leadership behaviour
to help the manager. This framework is different from Hofstede framework in the following
manner-
 Hofstede model has only six dimensions while in GLOBE nine dimensions are exist.
 Hofstede is used in information technological; sector while Globe is used financial and
telecommunication sector (Hofstede, 2011).
TASK 2
Types of economic system
An economic system is a system of production, resource allocation and dissemination of
goods and services. There are four types of it which are as follows-
 Traditional- In this, new generation retains the economic position of their parents and
grandparents. They rely on historic success of social customs.
 Market- This system is based on consumers and their buying decisions rather than under
government control.
 Command- In this, government controls and directs all economic activity. For example-
Communism. In this, market has no role.
 Mixed- In this, there are combination of market quality and command system into one. In
this no one can only control the country and here some resources are allocated by
government and some are allocated by market.
Effects of economic system on organisation
An economic system affects an organisation structure. If there is command system then
company has to work according to the government direction and government will watch the
operation of company time to time (Altaf, 2011).
2

In mixed economy, business and government will work together. There is less control of
government etc. Then business can be run easily.
Social inequalities
When in the society, there are inequalities or difference in opportunities and rewards then
it is known as social inequalities. In other terms it can be said that when there are unequal
opportunities provided and prize for different social positions or status within group then it can
be termed as social inequalities.
If there is implication of inequalities in an organisation then employees will be
demotivated and may leave the company and may not work accordingly (Minkov and Hofstede,
2011).
Difference between teleological and deontology theory
 Deontology is also known as duty based ethics while teleology is known as result-
oriented ethics.
 Teleology evaluates past experience for predicting the result of present action while
deontology follows what is morally right based on the values that are inspires each person
(Difference Between Deontology and Teleology. 2017).
CONCLUSION
From the above study it is concluded that globalization has many benefits like
improvement in transportation etc. There are many types of economic systems like mixed
economy, market system, command system etc. Free trade encourages people to do more import
and export that will help in the development of country.
3

REFERENCES
Books and journals
Dunning, J.H., 2012. International Production and the Multinational Enterprise (RLE
International Business). Routledge.
Folsom, R.H. And et.al., 2012. International business transactions: a problem-oriented
coursebook.
Hofstede, G., 2011. Dimensionalizing cultures: The Hofstede model in context. Online readings
in psychology and culture. 2(1). p.8.
Minkov, M. and Hofstede, G., 2011. The evolution of Hofstede's doctrine. Cross Cultural
Management: An International Journal. 18(1). pp.10-20.
Altaf, A., 2011. The Impact of Organizational Culture on Organizational Effectiveness:
Implication of Hofstede Cultural Model as Organizational Effectiveness Model.
International Journal of Interdisciplinary Social Sciences. 6(1).
Online
Difference Between Deontology and Teleology. 2017. [Online]. Available through:
<http://www.differencebetween.net/miscellaneous/politics/ideology-politics/difference-
between-deontology-and-teleology/>. [Accessed on 8th June 2017].
4