Impact of Globalization on Business Operations

Globalization
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Introduction
Over the past several decades, the world has experienced rapid changes. There has been a considerable change in the way things are done and how people interact. In fact, there have been more interactions and hence more interpersonal networks created. It is evident that the global economy of the 21st century has changed the economic and social environment in an extreme and ineradicable way. The economic landscape comprises mainly of three sets of interactive forces which include globalization, information and communication technology, and trade liberalization. Notably, globalization has helped in overcoming national borders and it has also aided in enhancing economic integration. This report examines the impact of globalization on the way businesses operates.
Definition
Globalization refers to the process of interconnection and integration among people, organizations, and countries (Motohashi, 2015).
Impact of Globalization on Business Operations
(a). Convenience.
There is increased convenience as people can get goods and services with little to no effort as before. It is important to note that globalization enables individuals, goods, and ideas to move and spreads around the world stimulating and encouraging more and intense amalgamation between economies. This is because, as initially noted, globalization results in the formation of a ‘global village’ due to the increased connectivity and interaction between individuals from various corners of the planet. The impacts thereof, affect virtually all aspects of human and social aspects (Hickson & Pugh, 2014). Ordinarily, the term globalization is applied when referring to the consolidated global economy which is marked by free trade and unrestricted flow of capital.
(b). Business Growth and Expansion
Globalization is considered a worldwide trend in which economies from all around the world lose their boundaries and they connect with each other. In this case, companies and organizations are no longer restricted by their geographical boundaries since they can develop and engage in a wide range of business-related activities with other firms from all over the world (Katerina, 2014). As a result of globalization, trade barriers are reduced and the exchange of services and products between countries increases. It becomes necessary therefore, for companies not to rely on their domestic markets as their source of long term profitability (Parboteeah, 2009).
Through globalization, businesses can identify other businesses across the borders with a similar or complementary business model. The business can therefore opt to go for a joint venture with the other one, or a complete merger based on the business sense that each option makes. The advantage of either option is that each business is exposed to a wider market for its goods and services (McPheat, 2011). Additionally, the business is able to utilize the economies of scale to its advantage, especially through large-scale production.
It is essential to understand the two form of globalization; these are the globalization of markets and globalization of production. First, globalization of ...