How Globalisation Has Shaped International Business Growth

How Globalisation Has Shaped International Business Growth

The attempts of firms to enter the global market are often led to failure; the above the phenomenon has been attributed to a number of variables. It seems that not all firms are appropriate prepared in order to operate globally. On the other hand, the potential success of such projects cannot be estimated in advance. The current paper looks at the role of globalisation in international business development. It is made clear in the literature that the size of an organisation is critical for the effective globalisation of the company in question. In either case, it has been shown that globalisation can have a significant effect on international business development, but the mechanism used to achieve this objective is not standardised.

In literature and empirical studies, the role of globalisation in the growth of international business has been illustrated, but academic researchers have been employed to justify the influence of globalisation in international business. Globalization gives companies, in conjunction with Dunning (1999), the ability to extend their operations in the global market, either physically or through the Internet. For example, reference is made to the case of the communications industry where globalisation has created ‘enormous opportunities for expansion and high profits for the major companies in the industry’ (Dunning 141). Merrill Lynch, a financial services firm operating in about 31 nations, is another example used in Dunning’s study to illustrate the relationship between globalisation and international business. (Dunning 141). In accordance with the view of Dunning, as presented above, globalisation will promote the growth of companies internationally; however, such advantage is likely to be available only to large firms, which have the resources necessary for enjoying the benefits of globalisation. Small and medium-sized businesses will face a great deal of difficulty joining the global market; therefore, foreign companies of this size could not compete. In other words, globalisation might help the international growth of firms, but such prospects would mostly include large corporations, as stated in the Dunning (1999) study above.

How Globalisation Has Shaped International Business Growth

The Worthington & Britton (2009) report highlights a different view of globalisation; according to the aforementioned study, the international market is not only relevant to international firms; it is proposed that ‘companies of all sizes should be aware of their international background’ (Worthington & Britton 45). In addition, it is clear that the availability of an expanded market for their products/services is one of the main advantages that globalisation can give companies globally. In other words, for the above-mentioned researcher, the notion of globalisation represents the presence of a globally expanded economy, covering the economies of all countries around the world.

The research by Wall and Minocha (2009) focuses on the use of globalisation in a wide variety of activities/areas, including trade, politics and sociology, to achieve benefits. Globalization is supposed to have specific advantages, particularly with regard to trade: improving the quality and level of trade established internationally between states and organisations (Wall & Minocha 2009); moreover, globalisation could help to ‘increase international capital flows’ (Wall and Minocha 2009). Globalization will also help boost ‘capital movements worldwide’ It is anticipated that globalisation will also greatly support companies that operate worldwide. An significant implication of Wall & Minocha (2009)’s view of globalisation, however, would be the following: not all large corporations would compete with their rivals; the lack of successful management would not enable small/medium-sized companies to gain access to the international market and perform independently.

Works Cited:
  • Ali, Abbas. Globalization of business: practice and theory. London: Routledge, 2000.
  • Dunning, John. Governments, globalization, and international business. Oxford: Oxford University Press, 1999.
  • Justin, Paul. International Business. New Delhi: PHI Learning, 2008.
  • Nande, Arvid & Dias, Shaila, International Business and New Trends. Shivaji, Nagar: Nirali Prakashan, 2007.
  • Parhizgar, Kamal. Multicultural behavior and global business environment, London: Routledge, 2002.
  • Prasad, Eswar. Effects of financial globalization on developing countries: some empirical evidence. Washington: International Monetary Fund, 2003.
  • Wall, Stuart, Minocha, Sonal. International Business. Essex: Pearson Education, 2009.
  • Worthington, Ian & Britton, Chris. Business Environment. Essex: Pearson Education, 2009.