Globalization Effects On Firm Performance

Globalisation is the growing collectiveness of our world economy, tending towards functioning as a singular entity opposed to multiple separate constituents (Longman,2002). Globalisation is not a modern process, and has been taking place for a considerable length of time as stated by Ellwood (2001:12) ‘Globalisation is a new word which describes an old process’. The process itself is fuelled by human innovation and technical progress, this in turn is spearheaded by sizable companies referred to as multinational or transnational companies (MNCs or TNCs), in an effort to expand their operations these businesses expand their global reach in search of new business opportunities, resulting in an interconnectedness between an expansive range of economies. This essay aims to assess the causes of globalisation as well as analysing its effects, not just economically but on a cultural and political level.

At the time of development of globalization there were many concerns about its benefits. However, it has brought significant changes in all segments of human life and International business is one area in which it contributed heavily (Reich, 1998). Companies all over the world are currently formulating their business strategies mainly after considering the trends in global market instead of domestic market. Outsourcing and offshoring are some of the new business principles emerged in this world after the implementation of globalization (Samimi and Jentabad, 2014). The core of these new business concepts is to exploit the business opportunities in overseas countries as much as possible (Samimi and Jentabad, 2014).

Globalisation is the internationalization of trade and often forces businesses to adopt new strategies for operations to suit different cultures and economies. The often easily saturated domestic market has triggered many large

Globalisation is the process by which the world is becoming progressively interconnected as a result of significantly increased trade and cultural exchange. It has also increased the production of goods and services. The biggest companies (such as McDonald’s, Starbuck’s, Costa

Globalization has influenced the way our world works today. This is the process of international business. Many of the items we are using at this very moment are imports, products produced in another country. Many businesses today rely on exports, products produced in their home country and shipped to other nations. Every country relies on imports and exports. Wether a firm is expanding to another nation or uses imported goods, international business is always involved and will affect the business model. Factors that will affect and alter the international marketplace such as, trade agreements and alliances, exchange rates, and foreign competition.

One of the core tenents to running a business is for a business to make money and to increase in size. As a result of that engaging in activities that increase a businesses capability to make money and increase its size is of great importance. Furthermore, as a result of that focus on increasing the sizes of businesses, globalization has furthered the spread of business. Globalization influences the world economically,

Businesses today operate an environment that differs greatly from anytime millennia, centuries or even decades ago. The pace of businesses has increased exponentially with the continuous improvement of information technology, telecommunications and geolocation supported by satellites and progressively more efficient modes of transportation and mechanization. The ability to move products globally overnight, increasing levels of automation, and collaboration instantaneously via virtual means has forever changed and reduced traditional barriers businesses face while creating a myriad of new challenges, risks and opportunities.

Globalization may be defined as the integration of the world 's people, firms and government. In the modern context, globalization is usually the result of closer ties in international trade, known as bilateral trade agreements. The WTO and NAFTA are two examples of such bilateral trade agreements. With such agreements, cross-country investment increases. This increase in investment is aided by the increase in information technology and communications, which has undergone a significant advancement over the last two decades with the rise of the Internet and mobile telephony (Green, 2013). It is important to the business to expand; global expansion and globalization would a positive business decision to complete in this process due to the strategic goals and objectives the company possesses. Healthy growth can be accomplished by globalization of specific areas selected and determined through research of market and development of these areas outlined within.

Nowadays, globalization has a great impact on companies, their internationalization process and how they are seen in the different markets where they have presence. Globalization may affect the company in almost every aspect.

Globalisation is a channel by which the world is rapidly connected due to massive trade and culture change .It has increased the development of goods and services. Many countries around the world now have subsidiaries rather than national firms. It has taken hundred of years to establish itself but has raised in the last half of the century. The international trade has increased due to the presence of globalisation. The companies started to operate in more than one country because of it. The global economy started heavily depending on globalisation. The movement of capital, services and materials

Does globalization only have adverse effects on large corporations? In theory this reading should provide the reder with the information that Globalization is not just a concept that effects large corporations, but also small businesses along with their employees. Through the following, effects such as, outsourcing, telecommunications, and developments in new technologies.

Globalisation, in the most basic sense, could be defined as the growth of business activity communications and movements of individuals over the national, political and geographic boundaries (Johnson et al. 2014). According to Hill, there are two main facets of globalization, includes globalization of markets and production (Hill, Cronk, Wickramasekera, 2014). The historically different and distinctive national markets are integrating into a single huge global marketplace in which the perceptions and preferences of customers in different countries are beginning to unite as a single global standard; examples are McDonald’s hamburger (US), IKEA furniture (Sweden). The globalization of production allow firms to locate products and services from different sites around the globe in an attempt to make benefits of dissimilarities in the price and quality of elements of production, thus allowing them to compete more efficiently against their competitors; an example is Boeing’s 777 and 787 ‘Dreamliner’ commercial aircrafts (Hill, Cronk, Wickramasekera, 2014). According to Hill, globalisation is occurring because the advances in technology that have allowed people, goods, resources, money and data to travel around the globe from different locations faster than before; moreover, the reductions in trade and investment barriers have significantly increased business activities between states. The theory also states that there are two key drivers of globalization, includes the declining in

In today’s world, globalisation is the primary factor that drives the development of the economy. The concept includes all the entities that operate in the economy whether it is the common consumer or the nation’s government. Globalisation has a significant impact on the society; the relationships formed in the labour world are quite different as there is a complete new set of rules to deal with (Tallman; 2002); for instance, people often migrate into new cities for jobs, people come from all over the world with various social backgrounds, and constant change in technology are just some aspects which are changed and dynamic in the labour world due to globalisation. There are many shifting forces in the international business world where there is increasing connectivity in a myriad of ways; here, globalisation is causing a system of interdependence where the economies, societies, technologies, governments, and institutions are integrated (Narula, 2014). Essentially, the force of globalisation reduces the barriers that nations have between one another where global markets are formed. As a result, there is immense pressure for all entities to conform to the global standards set by globalisation.

As trade increases hyper-competition grows forcing organizations to go global. By a company going global it requires them to rethink strategy and reform (Ananthram and Pearson, 2008). Global organizational structure is the way a company aims to merge local preferences with global strategy. The definition of global strategy is “strategic choices that have the characteristics of being globally uniform or integrated,” (Yip et al., 1997) such as standardization of products, uniform marketing, and competitive moves, but all globally (Townsend et al., 2004; Zou and Cavusgil, 2002; Bayraktar and Ndubisi, 2014). Global strategic strategy is a way to adjust to globalization. Globalization is “the economic and social process by which economies and communities grow inextricably interdependent “(Jhirad et al., 2009). The recent financial crisis (Das, 2010), large amount of poverty, and climate change are all problems that show how the world is globally connected because all countries impact each other (Jhirad et al., 2009).

Nowadays the world has now evolved into becoming a global village and business organisations are in one way or the other operating in interconnected global economies. Globalisation has increased the awareness all parts of the world. For example, the UK was quickly made aware of the 2004 tsunami tidal wave and sent help rapidly in response, this are few of the positive changes made by globalisation. Although many look at it as a threat to the survival of international business, others view this development as an opening for the growth of businesses. This essay will discuss what makes globalization a threat and also how it has affected the world and the market economy.