Globalization Effects in the Business World
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Globalization has brought significant impact in many areas of the people’s lives. The most affected seems to be the business world. Since businesses play one of the major roles in the growth of an economy, businesses going global have a major role in the economy growth experienced in some of the countries classified as third world countries. The project proposal evaluates the effects of globalization in the businesses in relation to the factors of production profiling the communication industry.
The communication has gone through drastic change in the past decade. With the growth of mobile use, smart phones, computers and other communication devices, it is significant to evaluate whether globalization has made positive or negative changes, and which markets have been affected the most. My main focus has also been driven to this industry as it has been evident that this industry has really grown in the past decade or so. The interesting thing is that its growth is not consistent all over the world and as a result, it continues to impact other markets worldwide.
By analyzing the impact of globalization in the communication industry, one will be able to understand the most affected areas within the industry. For example, has globalization made a positive impact more in the developed countries’ market or in the developing countries? Which products are the best to invest in within the same industry when thinking global? What factors of production are affecting the communication industry? These are some of the questions that can be answered when one analyzes the impact of globalization in the in the businesses in the communication industry (Hannon, 2011).
Whether positive or negative, the impact of globalization in the communication industry has been of significance and should continued being monitored as it predicts where this industry will be in the next decade. When the factors of production in the communication industries are evaluated, it is easy to identify those areas that can bring to the companies thus growing globally. Additionally, an analysis can give the remedies to the weaknesses of the businesses in the communication industry at a global level. The development of this industry will lead to the development of other dependant industries thus make the much needed improvement in the global economy.
It up to the countries and the organizations dealing in global trade and commerce to make sure that factors of production are not affected. For instance, labor as one of the factors of production should be equal in all the countries for those companies that have global so that it is not affected. In addition, prices as another factor of production need to be set by the free market. This is to reduce monopolization by other companies globally. Lastly, the capital generated should be utilized back put back to the economy especially in the third world countries so that they can improve global economy.
Goyal (2006) states that globalization has immensely reduced the poverty level in some developing countries such as China and India, just to mention but a few. This is because it has increase employment as one factor of production. With this kind of change, the communication industry has not been left behind. The increase in the use and the production of mobile phones in china due to the world demand has immensely contributed to the country’s growth. As Goyal explores on the impact of globalization in these developing countries, it is evident that one of the main concerns in the globalization of this industry is the degradation of the products being sold in the market (Bozyk, 2007).
Kose et al (2003) explains the impact of factor of production in globalization on the business cycles. As their research proves, factors of production in globalization have increased the synchronization of the business cycles. The coordination of business cycles and events are more improved now than it was a decade and a half or so ago. With the communication industry in question, synchronization of all the businesses related to this industry has greatly improved. The mobile businesses have to work in coordination with the communication businesses and the computer industries in order to bring forth products that will be of significance in the market.
Ball (2006) and Kercher (2007) have tackled the responsibilities and the challenges faced by the corporate as a result of globalization. It is significant to note that the international companies in the communication industries are no longer limited to having a social responsibility to their own countries but also on the international community as well. This one of the reasons why companies like Motorola, Samsung, and other countries dealing with any kinds of products used to communicate have played a role in the social development of the third world countries. In addition, these companies have increased their production since they have gone global therefore; they need to increase their global social corporation.
The factors of production are a bit tricky because it is not all the countries that they are able to work well. For example, there are some countries where there is no conducive environment to conduct business. This is because there might be civil wars or other risks making it difficult for the companies (Thornley, Jefferys & Appay, 2010). Therefore, factors like labor and production might be extremely making the company to fall down. For this fact, the management of the different companies needs to be extremely cautious when they want to take the company global.
Apart from the literature research concerning these two markets, constant follow up on the markets will be done in order to get a real life scenario, which will give us more solid results. It is significant to note that the countries are from two different continents and that their population is quite different (Mann, 2011). However, the main aim is to get the general impact of globalization on these two countries without putting so much emphasis on the population and the region. Communication is of significance to both countries and so the results will show, which country is experiencing more effects as compared to the other.
By way of speculation, globalization has had more positive impact on the developing countries (India) than the developed countries (Goyal, 2007). The developed countries face more challenges as far as the communication industry and globalization are concerned. However, it can be speculated that both markets are at advantage. Foreign countries have invested in the developing countries such as India due to the large population thus the availability of a market. On the other hand, developing countries such as India are able to export goods that are cheaper to countries such as U.S., thus creating an exporting market (Schifferes, 2007).
Apart from the production of communication goods, outsourcing has been on of the main advantages of the developed countries from the developing countries (Ball, 2006). This is evident in such services as customer care where communication services outsource customer care services from countries like India. This is because the labor is cheaper and the non-employed people are many. Consequently, the Indians get employment opportunities.
The main challenge experienced by a country like U.S. is the presence of counterfeit goods in the market (Ball, 2006). This includes mobile phones and other communication devices. This end up degrading the market that takes time to rebuild. On the other hand, the developing countries are vulnerable to exploitation. The communication companies outsourcing human resource from a country like India save millions of dollars as the labor is much cheaper and these companies do not have to pay for medical insurances and other employee benefits required by the American law.
It is enough that globalization has become a key success to many countries especially of the third world. This is because of the increase in the factors of production. For instance, capital has been made available by foreign investors to those developing countries that have not been able to provide capital. Additionally, labor has been improved in areas where there has not been any. Prices of commodities have been revised to suit the customer needs since companies have gone global. Productivity has increase tremendously since things are produced on a global perspective. Lastly, placement that is where the goods are to be sold or the place has increase since there is global market.
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