Impact of Globalization Essay Sample
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Impact of Globalization Essay Sample
If you go into your local store you will likely find a shirt made in Taiwan, a toy made in China, and an electronic made in Japan, all of which are made under a U.S. firm. This is a prime example of globalization which has become common place for large firms. While globalization is viewed as a way to increase business by firms, it is a risky venter with both positive and negative impact.
Globalization is the act of moving away from distinct national economic units and toward one huge global market. For business, globalization is a means to boost their profitability. It is a financially driven act that can impact their finances in multiple ways. A fresh market has potential to enhance sales and raise profit margins. If entered early enough you get a head of potential competition and make a name for your firm within the market giving you the competitive advantage. Another way for it to help profitability is for your firm to move production outside the home country. While maybe the new market you’re in may not be enormously profitable, their labor cost can be cheaper, meaning expenses can be cut and the price you sell your product for is much more than what you built it for.
Not every financial impact is guaranteed to be a good one. One downside of a new market is while you may sell more it may not be enough to make it worth the move. There is no guarantee of success in any business decision, especially one as expensive and risky as entering a new market. There are variables after variables of things to consider, and even when you choose the best possible option success is far from assured. The cost and energy involve in taking on such a task can, and has on multiple occasions, bankrupted and ruined firms. From constant shifting external factors like political environment and currency exchange rates, to internal factors like manpower and funds, globalization is one of the hardest things a growing form can embark on.
Finances growth or deflation is just one impact of globalization, another is cultural. What I mean is when entering a new environment adaption is something that must happen. Whether it is the firm or the new market, something has to give for the new entity to click into place. All firms have an internal culture in them that dictates the way they operate in business. In a sense a firm is like a country. It has its own distinct morals, attitude, and sense of pride that keeps it fighting to grow. These cultures tend to reflect the culture of its area of origin, and like all countries, they inevitably come across apposing ideal that create turmoil.
When a firm enters a new market place two cultures are forced to coincide with one another. Internally this means people with firmly held beliefs with how a business should operate, that differs from the firms, and will inevitability enter the workplace. This can cause clashing on a personal employee level and an overall operations level. The firm’s presence in this new market means they must either make a conscious decision on rethinking their ideals to fit better with the new environment. This is what normal happens.
While a firm’s culture alters most the time to fit the market, there are exceptions. If the firm is large and influential enough then the market will adapt to allow it to thrive. With some of the U.S.’s larger firms this has happened. Their presence draws more attention to the new market that other firms mimic the newer firm’s methods to try to either grow or survive. When this happens it begins to spread new ideals to the region that weren’t held as highly before because of its profitability and sustainability.
If you look at the world now and throughout history you begin to see a pattern with the growth of capitalism and globalization. As major money making firms began to flood into the worlds market places other firms began to mimic and advance upon the lager firs tactics. It was a way to help them to survive and flourish, and became normal life. Today the majority of the world is already of is moving to a more capitalistic society and changing governments to better fit the new methods.
Not only has globalization impacted cultures, they have it has impacted society as a whole. With firms going global we find new, more efficient, and less expensive ways to manufacture. In the 1980’s home pc’s were just becoming more common place in society and today we have smart phones that are 80 times more powerful and getting more advanced each month. We connect on a global scale with the internet and would be constantly lost without GPS. If not for globalization and its need to find quicker easier and cheaper ways to communicate and cooperate long distances these readily accessible technologies we take for granted would not exist. Another impact globalization has on society is its potential to prevent war. When every country starts to depend on each other’s firms for economic sustainability, the prospect of war means the loss of that sustainability. That dives governments to try harder to peacefully negotiate grievances rather than to call for death.
Globalization is a huge topic in today economic world. It can have, and has had, a large impact on not just the firm considering it but the market it chooses. Financially it is the biggest risk a firm can take but has the potential for just as lager of a return. It influences change in not just a firm’s internal culture but the markets culture and its country. Society as a whole has been able to advance at an astounding rate due to firms constant needs for new technology at cheaper prices. For good of bad globalizing seems to be a tactic that’s here to stay and a serious idea to consider for any growing business.
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