Global Business and Its Influence On My Thinking
Over the past seven weeks, discussion of global business research has covered a multitude of topics. The primary focus of this paper is to describe the most significant aspects of a global business that I have learned in this class. This paper is divided into eight sections. The first section provides a brief introduction and discussion of what I have gained from international business and globalization. The second part, I present how my knowledge of combatting corruption in global business has grown. The third part, I continue to discuss what I gained from the importance of political stability. The fourth section, then, discusses my understanding of global business’s decision to use offshoring and outsourcing. The fifth section, then, explains what I have gleaned from global supply chains. The sixth section explains my view on expatriate management. The seventh section describes my thoughts on what I have absorbed from International Human Resource Management followed by the conclusion.
International Business and Globalization
International business is the trade of services and commodities between individuals or business enterprises in multiple countries. It primarily involves all the business and commercial transactions that take place between various localities, populations, and countries outside national boundaries. International business entails understanding the impacts that these activities have on domestic and international economies. Participation in global enterprise permits countries to benefit from specialized skills and multiple methods to deliver goods and services into the global economy. This is a way of increasing the selection of goods and services available in the market. International business also increases competition in domestic markets and opens new prospects to foreign markets.
Throughout this course, there has been one term that has been consistently discussed in each week’s literature. Looking back, what I can recall is the majority of the literature read began with the same term, globalization. Globalization is defined by multiple researchers using their interpretation to describe the meaning. What I have concluded is that globalization is about all countries being afforded the opportunity to participate in the fair equity of trade of goods and services with other countries. This relates back to the Flat World concept where Van Genderen (2013) implied Friedman’s flat world is seen as removing advantages one country may have over another or creation of an even playing field.
Corruption
While globalization’s purpose is to create a level playing field, barriers such as corruption do not make it easy for developing countries trying to emerge into the global economy. Corruption can take many forms that can include bribery, embezzlement or extortion. It can affect any business, however, is usually more prevalent in developing countries. For this reason, organizations have been developed to take measures to eliminate corruption in international business. Hess and Dunfee (2000) contended that proposals initiated to prevent corruption reflects an increasing worldview on this topic although there is reluctance to believe these attempts will be successful. Malgwi (2016) stated organizations that have joined together with the United Nation to fight corruption and bribery include the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund and Transparency International (TI).
Political Stability
Political instability can have an even more significant influence on firms, making them unwilling to participate in new investments or enter new markets. Possibly motivating firms to relocate business functions to an established and liable locality. Political uncertainty in an area where a business function will mean that the business has to be very flexible and adaptable; prepared to adjust their processes at short notice to reflect changes in the political environment. Grydaki and Fountas (2009) observed that during periods of political insecurity, currency value volatility appears to exert a negative impact on economic expansion because of increased instability over policy decisions and execution.
In contrast, a country's political position and economic performance can influence its currency value stability. Sattler and Walter (2010) debated that the failure of governments to achieve stability could escalate inflation and reduce foreign ventures, this could initiate considerable declines in citizens' wages and employment security. Political stability is essential for business environments as it affects investor and consumer confidence, thus having a broader impact on the economy. A nation that has a low probability of political instability is more appealing to foreign investors; pulling ventures away from other countries that have more political and economic instability.