People use the word “globalization” to talk about how commerce and technology have made the entire globe narrower and more connected. Globalization also includes the economic and social adjustments that have happened. Globalization aims to give businesses a better competitive edge and lower operating costs to enable them to sell more products, services, and people. Professor Forest Reinhardt of Harvard Business School said globalization is the increased flow of products, facilities, investments, people, and insights across international borders. The economies of different countries are more linked than ever before. At one time, people could only get goods and services in their area. International business is any trade that takes place across the borders of two or more countries. Egypt did this by sending goods to Assyria over the Red Sea. Globalization seems to be more than just doing business around the world. It is a move against a more comprehensive global industry wherein goods, services, and resources are traded along with culture, ideas, and beliefs. Due to new transportation and communication technologies, globalization means that the world is “getting smaller.” This article will try to explain, HOW Globalized Business CAN CHANGE THE FUTURE BUSINESS STRUCTURE IN 2022 AND FUTURE?
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History of Globalization WE NEED TO KNOW
The idea of globalization is not new. In the past, traders went very far to buy rare and expensive goods in their home countries. Theodore Levitt died on June 28 in Belmont, Massachusetts, where he lived. He taught at Harvard Business School and is credited with coming up with the word “globalization” and promoting the underpriced position of marketing in deciding what businesses should create and purchase. He was 81. In the 19th century, transportation and communication got better because of the Industrial Revolution. This made it easier for people to trade across borders. Globalization is a historical process that started when people left Africa and moved to other parts of the world for the first time. Economists use the term “first globalization” to talk about the period between 1870 and 1914 when trade and finance became more connected globally for the first time in a big way. The “second globalization” took place between 1944 and 1971. This led to the third era of globalization in 1989, which is still happening today. Some say that the first signs of globalization were Genghis Khan‘s invasions or travel along the Silk Road. Scholars believe that globalization has happened a lot previously. Several more people might think that it has only been around in its current form since World War II. Many historians believe that adopting the gold standard in the 1800s marked the beginning of the first wave of globalization. Gold has a history of use in money since people started making gold coins thousands of years ago. The value of the coins was the same as the value of the gold they were made of. In the 1800s, England started making its money worth a certain amount of gold.
GLOBALIZATION IN BUSINESS TO CONSIDER
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Money, goods, technology, information, and jobs move across national borders and cultures due to globalization. Because of free trade, countries depend on each other regarding money. From the early days of globalization to where we are now, the growth of the internet and easier ways to talk to each other and work together moved us forward. People have been carrying goods, cargo, people, and ideas around the world by ship for hundreds of years, but it wasn’t until the aeroplane was invented that a plan for a “globalized economy” was made. We did this for one simple reason: it let us go farther than ever. The world will always be linked together. Globalization is here to stay, even though some countries and regions have laws and practices that slow it down, like tariffs. The good news is that businesses and professionals willing to face the challenges and risks of globalization and prepare for them stand to gain a lot. Through the movement of people, products, and money across international borders, globalization has created new jobs and helped the economy grow.
On the other hand, expanding and creating new jobs are not taking place in the same manner in every industry or nation. Globalization’s goals are philosophical and practical, but creating a free market worldwide has helped big Western companies. It affects workers, cultures, and small businesses in various ways in developed and developing countries. Economic activity has increased worldwide since the world economy has become more open. In the middle of the 20th century, the United States was the world’s most important economic power. On the other hand, in the 21st century, the European Union (EU), Japan, China, and India significantly affected the world economy. People think that they will be even more critical in the future than they are now.
GLOBAL BUSINESS, IS THIS A NEW IDEA?
International trade is what global business is, while a global business is a company that does business worldwide. Goods have been traded over long distances for a very long time. Anthropologists have already proven that people in Europe in the Stone Age moved long distances. Sea-based trade was common in many parts of the world long before the Greeks came along. In the 1600s, ocean-based communications made it easy for all continents to talk to each other. At the beginning of the 17th century, there was a lot of trading in the modern sense. Since this kind of trading happened in Roman times, it might be better to say that it “came back” instead. In 1600, the British East India Company and, in 1602, the Dutch East India Company were the first companies to go to India. The government set these companies up to do business all over the world.
Both are now part of the past. The British company went out of business in 1874, but during its nearly 300-year history, it helped start the British Empire and ran it for a long time. After almost 200 years of business in Asia, India, Sri Lanka, and Africa, the Dutch company was broken up in 1798. But the Hudson Bay Company, also started by the British to profit from the fur trade in North America, has been around since 1670 and is still going strong. Canadians say the company’s initials are “Here Before Christ.” HBC is no longer a worldwide monopoly. In Canada, it is now known as a department store. Great trading companies were and still are essential for transportation. Running ships helps them do what they do. The American Cargill Corporation, which is privately owned and sells agricultural, food, pharmaceutical, and financial products worldwide, is a good example of this. In the big picture of international trade, it has always made sense for sovereign states to aim for a balance in business. Balanced work means that exports and imports are the same, so they cancel each other out. Exports bring in money that can be used to buy things. The way things are going now suggests that trade deficits will worsen.
GLOBALIZATION OF BUSINESS IN THE THIRD WORLD
On the other hand, in the 21st century, significant countries include the European Union (EU), Japan, China, and India, the “third world.” In recent years, more people have gone to school because globalization has led to more jobs that require more skills. People were able to go to college because of this demand. Health and education are two of the most important things a country can do to improve, and there are strong links between economic growth and the health and education systems. Globalization is good for the business of developing entrepreneurship, and the development of entrepreneurial ecosystems drives economies in ways that create jobs, make money, and help achieve the SDGs. With globalization, the wealth divide between the rich and the poor is getting much more extensive. The wealthy are amassing even more wealth. The benefits of globalization include the health and education systems in developing countries. Globalization has led to more jobs that require higher education, which has led to an increase in education. Globalization changes how things are set up internationally, nationally, and locally. In particular, it changes how production is set up, brings financial markets together, and makes international trade possible. This affects global capitalist economic and social relationships through the globalization of economies, in addition to microeconomic elements such as business competitiveness. Changes in the way things are made change the structure of classes, how work is done, how technology is used, the capital structure, and the organization. People now think that globalization hurts workers who don’t have a lot of education or skills. No longer will a growing business automatically lead to more jobs.
Also, because capital is more mobile than labor, this can lead to a high return on investment. In the end, globalization changes the way the economies of all countries work. In particular, multinational corporations from technologically advanced countries dominate low-income countries’ economies. In this way, only international companies with similar patterns and production methods that require a lot of capital can stay ahead of the competition. Globalization will make it easier for different kinds of capitalism to come together in a liberal model without a welfare state to protect fundamental rights, which doesn’t seem right. When there are institutions for coordinating markets, people tend to use them. Coordinated market economies have changed their systems and ways of working over the past 20 years. They have adapted to the new challenges.
GLOBALIZATION OF BUSINESS IN THE DEVELOPED COUNTRY
Industrialized or developed nations have reached high economic development and, according to economic theory, meet specific socioeconomic criteria. These include a high level of industrialization, a high gross domestic product (GDP), and a high human development index, which all contribute to a prosperous economy (HDI). These matters are governed by regulations established by the International Monetary Fund (IMF), the United Nations (UN), and the World Trade Organization (WTO), respectively (WTO). A company’s power comes from its ability to control the tangible and intangible assets needed to build customer loyalty, no matter where the customers are. Using its most valuable assets—ideas, knowledge, and connections—a business can stay in business and become a world-class thinker, maker, and trader. This is true no matter how big, or far away the company is.
GLOBAL BUSINESS ETHICS
The study of ethics is a subfield of philosophy that focuses on establishing what kinds of behaviour are deemed proper and what types are deemed inappropriate. It raises the topic of what kinds of things people should consider “good” and “bad” to do in different environments. The ethical norms articulate how people should conduct themselves. It is a subfield of philosophy that provides solutions to issues concerning morality, such as what is considered good and evil, what is deemed to be correct and wrong, what is considered to be fair, and what is considered to be a virtue. A few fields influenced by ethics are medical, science, business, and government. To begin, we need to make an effort to comprehend the “origins of ethics,” which can be traced back to a variety of sources, including but not limited to religion, philosophy, the laws of nature, scientific research, an examination of political theory concerning ethical norms made by society, or other areas of study. The description of the topic of ethics demonstrates how individuals think about ethics in stages, beginning with the question of where ethical principles originate and how those principles should be applied to various activities or challenges. The ethics of conducting business globally are grounded in reality, while predetermined guidelines govern others. From a more pragmatic standpoint, it examines how companies operating in global economies buy and sell various products and services. There are two components to the normative point of view. First, it addresses the appropriate actions for businesses to take in the face of immoral problems in their local communities and the wider world. Second, given the nature of their employment, what moral guidelines and operational processes should they adhere to when addressing issues such as poverty, salaries and working conditions, bribery, health care, education, racial and religious strife, environmental harm, and human rights violations.
To sum up, “globalization” refers to the process by which an increasing number of people, ideas, goods, and money are moving across international borders. Since the beginning of time, there has been an ever-increasing number of connections between the economies of various nations. The purpose of globalization is to increase the competitiveness of businesses while simultaneously lowering the expenses associated with conducting their operations. It began when people in Africa first moved to other regions of the world, which is when it spread throughout the rest of the world. The adoption of the gold standard in the 1800s marked the beginning of the first wave of globalization. Before the arrival of the Greeks, maritime commerce was prevalent in many different places of the world. The British controlled the Hudson Bay Company, which has been in operation since 1670, to profit from the lucrative fur trade in North America. Given the current state of affairs, it would appear that trade imbalances will continue to widen in the coming years. People now have more opportunities to learn how to start their own firms due to globalization. The gap between the wealthy and the impoverished continues to grow over time. Because it is simpler to relocate capital than it is to relocate people, this might result in a high return on investment. Coordinated market economies have seen significant structural and operational shifts over the previous two decades. Developed nations, often known as industrialized nations, have accomplished significant economic expansion. The ability of a firm to exert control over its tangible and intangible assets is what gives it the most effective degree of influence in a global economy. The ethical norms articulate how people should conduct themselves. It poses the question of what people should do “right” and “wrong” in various settings. Facts provide the foundation for some aspects of global business ethics, while rules underpin other elements. In a more tangible sense, it examines how enterprises that buy and sell things behave ethically.
Reference:
1 . 6 PROS AND CONS OF GLOBALIZATION IN BUSINESS TO CONSIDER
2 . When Did Globalization Start?
3 . Global Business
4 . Globalization of business and the Third World: Challenge of expanding the mindsets