There are three different viewpoints on international business and globalization, that “further globalization is inevitable,” that “international business will grow primarily along regional rather than global lines,” and that “forces working against further globalization and international business will slow down the growth of both” (Daniels, Radebaugh & Sullivan, 2013). The idea behind the inevitability of globalization is two-fold. One, that consumers will demand the best quality of products at the best prices, regardless of where they come from, and two that the increased globalization will work to improve the quality of life for those who are dying needlessly for want of food, supplies, and technology (Daniels, Radebaugh & Sullivan, 2013). Products made in certain areas come at a cheaper cost, not necessarily because they are of poorer quality, but because the standard of living is lower; by increasing the standard of living, the cost will be driven up as well. The assumption is that the betterment of human life will be a priority over the dollar, which is not the case. The second viewpoint has to do with the fact that most businesses that “go global” simply have expanded their business to countries that neighbor their own, but it is believed that this is a transitory stage, waiting for the next iteration, as the company gradually expands (Daniels, Radebaugh & Sullivan, 2013). The value conflict arises with the cost to the company itself; the as the company expands, its expenses increase, and due to that increase, the farther away the companies go, the greater the cost that they will push to their clients. The assumption arises from the idea that first, the company will have the means to continue expanding, and second, they are able to find a way to work to mitigate the costs so as not to drive their product up astronomically. Finally, the idea that the pace of globalization will slow down has to do with the fact that companies see no need to continue to expand, especially in light of issues faced when dealing with local governments (Daniels, Radebaugh & Sullivan, 2013). The value conflict arises from the fact that companies are looking for a global mandate to assist in the regulation of trade, to bypass these government issues and fees, however the assumption comes from the fact that first, this will be better than things currently are, and second, that local governments will be willing to accept having this aspect taken away from them and given to an independent third party, reducing their income.
According the DHL Global Connectedness Index (2012), it may be seen that the world itself is not as connected globally as it was in 2007, which is in line with Ghemawat’s TED talks wherein he suggests that the world is only semi-globalized at this point, as opposed to fully globalized (2012).
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"Introduction to International Business. Globalization: Issues and Challenges".
The role that technology plays in globalization is enormous; when looking at just the role that it plays in supporting company performance in a globalizing business environment, all of the technologies used that have something to do with production, with communication, and even simply intranets setup by the company are all affected (FCMS, 2012). When adding in all technology, and not just modern technology, that takes things back to Gutenberg’s printing press, if not farther.
Governments play a role in protecting their citizens from the potential negative effects of foreign MNEs conducting business in their countries through the use of laws and regulations imposed upon them. While it is recommended that some form of regulation is put into place for these entities, it is recommended that they impose fines for the violation of those regulations, but work with a system of checks and balances to ensure that there is no corruption causing additional fees to be charged, and thus running the corporations out. The key is to finding a balance between regulatory acts, and the application of those acts, while working to ensure the safety of the local people, and yet maintaining the business relationships themselves.
Topic 2: Transport Manufacturing
There are five different factors in increased globalization, including the “increase in and application of technology,” the “liberalization of cross-border trade and resource movements,” the “development of services that support international business, growing consumer pressures, increased global competition, changing political situations, (and) expanded cross-national cooperation” (Daniels, Radebaugh & Sullivan, 2013). To specifically see how two of these five factors impact a specific industry, we will take a brief look into transport manufacturing. The transport manufacturing industry is made up of companies that manufacture vehicles and vehicle parts, as well as being comprised of all of the necessary infrastructures to support that manufacturing (MSU, 2012).
When looking at the increase in the use of technology and the application thereof, the very industry itself has changed, not only due to the technological advances that are present, and continue to occur, but also when looking at the availability of parts and labor, based on global location. This, when combined with the increased allowances for cross-border trading and the movement of resources serves as a way to be able to work to have the same manufactured products at a decreased price. If, for example, country a had a plant designed to make wing struts for airplanes, but did not have enough of one particular type of resource that neighboring country b had, instead of paying a higher cost for that resource from within the country, the plant could obtain the resource from country b at a lower rate and ship it cross border to be able to make their wing struts at a decreased cost to the customer, while still making a profit.
- Daniels, J., Radebaugh, L., & Sullivan, D. (2013). International business environments and operations . (14th ed.). Boston: Pearson. Retrieved from http://digitalvellum.next.ecollege.com
- DHL. (2012). Global connectedness. Retrieved from http://www.dhl.com/en
- FCMS. (2012). Effects of technological developments on globalization process:. Retrieved from http://mediaif.emu.edu.tr
- Ghemawat, P. (2012, October 22). Ted talks: 11 stats that suggest our world may not be as globalized as we think. Retrieved from http://blog.ted.com
- MSU. (2012). Transport manufacturing. Retrieved from http://globaledge.msu.edu/
