Globalization: A Future Business Opportunity

As a village, the world is becoming more and more a global community. The advance of technology and innovations in the world of communication has facilitated transactions and reporting without geographical barrier (Cox, 2016). This is why it has become easier to run businesses. Globalization has, therefore, played a key role in enhancing the global business. Globalization includes the interconnection of international markets and the management of business activities in the world industry for business activities. In this context, this paper explored the effects that globalization has to business activities across the world and how businesses can maximize the opportunities that come with globalizations. This paper also evaluated the negative effects of globalization and how business organizations can counter those effects. From this evaluation, this paper highlighted the dynamics that surround globalization in the business context, especially, in multinational organizations. It then pointed out the opportunities that come with these dynamics for business operations.

Table of Contents
1. Foundation of the study
2. Background of the problem
3. Problem statement
4. Research question
5. Findings from research
i) Opportunities from globalization
ii) Negative effects of globalization
iii) Countermeasures for the negative effects of globalization
6. Conclusion

Future Business opportunity: Globalization

Foundation of the study

The association between different regions in the world is constantly increasing. More countries are signing international agreements and regional agreements and guide the business practices of their economies. For this reason, businesses are coordinated between different countries in various locations of the world. In the process, the businesses emphasize on the principles of equality and focus on cooperation and coordination, which is the tendency of business: Globalization.
Most governments in developed countries have privatized many industries in their countries, hence, leading to the emergence of larger markets in those economies. In such environments, most companies in those industries strive to extend and expand their value chains to an international level to increase consumer demand. In this manner, when the businesses enter the global business environment, they are bound to benefit from the foreign economies and the enormous markets. The increase in globalization can be observed from the increasing business transactions across the borders exposing businesses to larger markets. In the recent decades, it has become a trend for every large business to establish branches and subsidiaries in different countries to protect their yields and maintain competitiveness (Cox, 2016).

Background of the problem

Globalization is the exchange of cultural traits, products, services and ideas aimed at integrating businesses, governments, and people across the world. It is aimed at ensuring free and easy corporation between different individuals and organizations in different geographical locations across the world. For this reason, globalization exposes businesses to relatively cheap labor and a wider market, hence, enabling them to devise strategies that increase the market share and retain a global competitive advantage.
Businesses can maximize the use opportunities that come with globalization by creating strong associations and relationships with relevant companies and organizations from other countries. This would enable the companies to get first-hand information and knowledge on the trends and happenings in those economies as well as the business regulations and legislations set by authorities in those companies. This concept is similar to the issues of technology transfer in the global markets. The constant change of technologies requires a system that enables faster transfer of information and knowledge across countries to enable companies to adapt technological advancements in their production. The constant changing of global markets requires multinational companies to adopt systems that enable quick transfer of information and efficient usage of that information and knowledge. For this reason, businesses can maximize on globalization by adoption systems that expose them to emerging information and knowledge that is relevant to the industry in which they operate.

Problem statement

Through globalization, businesses than transfer products derived from their core competencies to international markets where the native businesses lack those products or the core competencies. As such, multinational organizations will derive greater returns from these business practices. For this reason, there are various advantages that come with globalization. However, globalization also has negative effects to superiority. The ability to cope with these negative effects is the priority of every multinational organization.

Research question

The central research question explored in this paper is: What effects will globalization bring to business activities, and how can businesses maximize the opportunities that come with globalization?

Findings from research

This research found out various ways in which businesses will benefit from globalization. Some of the opportunities that arise from the association of people, organizations, and governments across the world include:

a. Expanded markets

One of the greatest opportunities that globalization will have to business operations is the expansion of markets. Globalization enables businesses to open branches and subsidiaries in different other countries, hence, benefiting from the markets of those countries. This implies that a business that initially only sold its products or services in its domestic country will start selling the products and services in other countries.

b. Exchange of Technology

Another opportunity that comes with globalization is the use of technology to improve business operations. With globalization, internationally oriented businesses use technological advancements to exploit new business opportunities in new territories. Businesses can also apply technologies used in domestic markets to expand and improve their operations in international markets. For instance, businesses can use e-commerce and the Internet to expand their involvement into new global markets. Businesses can also use technological advancements to improve their competitive strength in global markets by producing high-quality goods and services.

c. Knowledge/Information transfer

Through globalization, businesses can also benefit from an easy transfer of information and knowledge across different countries and geographical locations. In the contemporary competitive global environment, information is one of the most expensive and valuable production factors in many industries. Globalization enables an easy transfer of information from country to country. As such, a business organization that uses knowledge and information can easily adapt to global economic changes. By enabling the coordination of companies and organizations in different countries, globalization makes it easy for these entities to share information and knowledge on important business aspects such as consumer trends and technological advancements.

d. Foreign Trade

Globalization also provides an opportunity for foreign trade for businesses. Globalization has led to the increased expansion of foreign trade in the world. Products and services that were only offered in developed countries can now be found in other countries across the world. With foreign trade, consumers can now buy whatever goods or services that they want from any country. This has provided opportunities for businesses to invest in many different countries in the world since many people are increasingly developing trust in products produced by foreign companies.
Many countries have also played a crucial role to promote foreign trade in the wake of globalization. These countries facilitate businesses through international trade, whereby they clear businesses to export and import goods across the globe. Countries that export goods have a comparative advantage, hence, companies in those countries enjoy a competitive strength in the production and export of those goods. In this context, businesses can maximize on this opportunity by making use of the available foreign trade in their economies. Governments also encourage the establishment of companies to regulate and control the trade activities of different countries around the globe so as to facilitate fair trade.

Negative effects of Globalization to business activities

Despite the numerous positive effects and opportunities that globalization has to businesses, it also has several severe impacts to business operations. This research found some negative impacts of globalization to include?

i. Outsourcing work

While globalization might expose businesses to a wide range of cheap labor and resources, it might also lead to poor quality of production or service delivery due to unsatisfactory remuneration of the workers. The workforce from some of the countries across the world offers cheap labor for many service-related jobs. However, the control of time delays, shipping expenses, and quality of services can have hidden costs. Service jobs such as software development, accounting, education, manufacturing, and information are being lost in developing countries such as Europe and the United States, to emerging lower paying countries such as China and India. For this reason, as businesses may seek to employ a cheaper workforce in attempts to minimize costs, they might incur hidden costs regarding the quality of the work and other hindrances such as the language barriers.

ii. Language barriers

With globalization, the increasing corporation of businesses and individuals from different countries necessitates the needs for a common language. For understandability and smooth running of business activities, the stakeholders need to speak in a language that can be internalized by all the involved parties. As such, when businesses, operate in different countries whose members speak different languages, it might be difficult for the businesses to conduct some business activities in such countries. For multinational organizations, workers from foreign countries who speak different languages will often need to communicate with other workers in the organizations. If these workers cannot speak a common language, it might severely impact on the business activities of the organization (Nickels, et al., 2016).
For businesses to counter the language barrier and maximize the opportunities of globalization, they need to resource language services such as translation. It might also be necessary for the businesses to higher foreign language translators to facilitate business transactions. Language translators facilitate the communication of workers from different countries during events and meetings. They also help the employees traveling to foreign countries to communicate and transact with partners and local markets of different countries.

iii. Disadvantage to domestic businesses

Globalization is designed to work in the best interest of the riches companies and economies at the expense of small businesses and developing countries. With their established brands and relatively good corporate structures, large multinational businesses are in better positions to attract cheap labor and raw materials, hence, minimize their cost of production. On the other hand, many small domestic businesses lack economics of scale, hence, having high costs of production which mean a disadvantage in the marketplace (Hill, et al., 2013).
Furthermore, a large proportion of the wealth generated by large multinational businesses from international markets is not used in the development of the domestic communities. Rather than investing in the infrastructural development of the countries where the revenue is generated from, most of the multinationals invest the wealth in their parent countries. For this reason, globalization may work for the benefit of large organizations and to the detriments of small domestic businesses (Hill, et al., 2013).

Countermeasures for negative effects of globalization

Despite globalization having various challenges for businesses, these companies can apply some measures to counter the effects and maximize the opportunities that come with globalization. Some of the countermeasures include:

a. Checking the quality of the outsourced work

While businesses might seek to minimize their cost of production by sourcing cheap labor and raw material, it is also prudent for the businesses to consider the quality of those workers and raw materials. Multinational businesses that consider outsourcing services need to look at all related expenses and possible problems that may arise from the outsourced work. For instance, to would not be beneficial for a business to hire cheap labor and use low quality raw materials in production and jeopardize the quality of goods produced.

b. Adopt technological innovation

In the wake of globalization, businesses need to extensively invest in technology to ensure that their operations stay on schedule and are profitable. It would also ensure that the businesses adapt the latest technological advancements in their production processes. In the globalized business environment, it is vital that the business adapts appropriate technology to enable the production of goods with fewer costs per unit so as to establish a trade advantage over the competitors. Furthermore, the business should also establish an efficient knowledge dissemination and communication system that facilitate the flow of information so that the customers can receive their orders promptly regardless of their location (Hill, et al., 2013).

c. Establishing a niche in the market

While large multinational organizations might enjoy economies of scale, smaller businesses might maximize the opportunities of globalization by finding a niche and capitalizing on it. The businesses could establish their target market and produce goods and services tailored to meet the specific needs of the target market (Nickels, et al., 2016).

Conclusion

Globalization is not a new concept. It has existed for centuries. However, the growth and improvement of technology are increasingly making the world a small village. Companies can now oversee business operations in different countries with ease. While globalization provides various opportunities for businesses, it also has various severe impacts for the businesses. However, these businesses can employ countermeasure to these effects and maximize on the opportunities of globalization.
Some of the opportunities that globalization provide include expanded markets, exchange of technology, foreign trade, and sharing of knowledge and information. Globalization enables the business to have subsidiaries and branches in other countries, hence, tapping on the markets from those countries. In the process, the business can easily share information and knowledge through improved technology.
Some of the challenges that come with globalization include poor quality of outsourced work, language barrier, and disadvantage to small businesses. Companies can overcome these challenges by employing countermeasures that would facilitate business activities in foreign countries. The businesses should check the quality of the outsourced services, adapt technological innovation, and establish a niche in the market.

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References

Cox, J. A. (2016). Leadership and Management Roles: Challenges and Success Strategies. AORN journal, 104(2), 154-160.
Hill, C. W., & Hult, G. T. (2016). Global business today. New York: McGraw-Hill Education.
Hill, C. W., Cronk, T., & Wickramasekera, R. (2013). Global business today. McGraw-Hill Education (Australia).
Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2016). Understanding business. New York, NY: McGraw-Hill Education