Globalisation & its impact on International Business: A Study

Topics: International trade, Business process outsourcing, Globalization Pages: 10 (3166 words) Published: July 7, 2012
Advent of a ‘Global Village’
Globalisation & its impact on International Business: A Study

“Globalisation is radically changing the international business environment by creating a ‘global village.”


The intent of the paper is not merely highlighting the aforementioned viewpoint but to establish the ideology within the context of International Business amidst globalisation and understanding the increasing interaction and inter-dependence amongst the firms and businesses in various industries and the global market. Globalisation is one of those few phenomenons we hear about all the time and hereby we try to analyse the impacts that globalisation has had on the world. With help of some of the best, easy to comprehend examples, we try to understand how with time the business world has become more interactive, communicative and inter-dependent in nature and if it really has been in favour of firms competing in the market.

Globalisation in business is the integration process of the world through the use of international trading system. It unifies the local and foreign markets to make the trading even easier for businesses. In yet other words, we can call globalisation the process of increased inter-connectedness among the countries in the areas of culture, economics and politics. Firms competing in the market place have the luxury to choose their option and maximise their business potentials by the way of participating globally. Such process as a result, simplifies the corporate process of canvassing materials, production, marketing and distribution of products and services. The information System (IS) is quite different from the usual trading and thus businesses get alliance with ease other than supplies and labour forces from other countries as long as they follow the rules set by the global economic authorities including the World Trade Centre. (Scholte, 2005)

Is it not amazing when we turn an apple i-pod upside down and it says, ‘designed in California (US), assembled in China?’ The clothes in our wardrobe, an English brand made with Chinese cotton, sewed by Indian hands, shipped on a French freighter crewed by Americans to a United Kingdom harbour. That’s Globalisation.

The March of Globalisation - Analysing the Impacts

The word ‘Globalisation’ has always been creeping on all of us as long as we can remember; however, it has never been so visible and impactful until recent years. Artificial constraints like tariffs have become unfettering and the businesses are expanding globally complicating the already existing competitive environment (Chang & Park, 2005). It can be easily explained as to how the fundamental nature of competition has changed in the industries in the global economy. This change in itself has a relentless pace and moving forward at all time.

In words of Williamson (2004), globalisation has had too many implications to the national economy. It has intensified inter-dependence among economies in the world market and countries and yes, their organisations as reflected in the knowledge across borders, flow of goods and services and the financial capital. In short, globalisation is the outcome of a large number of business firms competing against each other in a rising number of global economies. Globalisation in true sense extends immense opportunities for firms competing in the 21st century’s highly competitive landscape. In a globalised market, as confirmed by Khanna (2006), the financial capital can be obtained from one national market and be used to buy raw materials in a second market. The manufacturing equipment can be purchased from a third national market and be sold in yet another one or say a fourth market. It has become challenging to determine the boundaries of any industry in the current world scenario.

Wal-Mart could be a straightforward example to support Khanna’s (2006) view point. Wal-Mart is the name, the brand, the global giant which is known...

References: Scholte, J.A. (2005) Globalisation: A critical introduction, 2nd Edition, Palgrave MacMillan.
Chang, S.J. and Park, S. (2005) Types of firms generating network externalities and MNC’s co-location decisions, Strategic Management Journal.
Williamson, P. and Zeng, M. (2004) Strategies for competing in a changed china, MIT Sloan Management Review.
Khanna, T., Palepu, K.G. and Sinha, J. (2005) Strategies that fir emerging markets, Harvard Business Review.
Hit, M.A., Hoskisson, R.E. and Ireland, R.D. (2007) Management of Strategy: Concept and Cases, Thomson South-Western Publications.
Barwise, P. and Meehan, S. (2004) Don’t be unique, be better, MIT Sloan Management Reviews.
Prospero, M.A. (2005) The march of war, Fast Company, May 14.
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Belderbos, R. and Sleuwaegen, L. (2005) Competitive drivers and international plant configuration strategies: A product level test, Strategic Management Journal.
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