Discuss about the Small Firm Internationalization and Business Strategy.
The paper focuses on reflecting on the concepts associated to globalisation and internationalisation while also discussing on the differences and similarity between the different concepts. The paper would also focus on evaluating the impacts of globalisation and internationalisation on the business institutions. The institutional and resource based theories of business environment would also be discussed in the paper while also analysing the implications of managers in the global environment.
The term globalisation rightly identifies the process through which different economies around the globe can be effectively integrated. The development and incorporation of internet and information technology resources potentially contributes in the generation of economic liberalisation on a global scale. The advent of globalisation is also observed to encourage the dominance of westernised political, economical and cultural scenario on the developing and emerging world economies (Ch. et al., 2011). Globalisation thus also contributes in the generation of concepts like Americanisation and Westernisation. Again, the aspect of globalisation contributing to the development of a free market economic system also helps in unifying the different global economies thereby reducing the emergence of social conflicts (Irani & Noruzi, 2011).
Internationalisation in sharp contrast to globalisation earns its emergence in the eastern context. Internationalisation as a concept thus focuses on the advancement and growth of cognitive abilities in human beings in terms of realising the bonds existing between different human cultures and values that constitute diverse human societies (DE WIT, 2011). Further, the aspect of internationalisation also centres on the parameters of cooperation and collaboration between the members belonging to the different humanistic societies and also associated with the caring and sharing functions between the different social members. Internationalisation is also observed to be the response reflected by the different economies subsequently on the impacts generated by globalisation. It however focuses on sustaining the individuality of the different nations or economies (Fok, 2007).
The aspect of globalisation tends to create and enhance the level of interdependence between the different global economies while internationalisation focuses more on restoring the individuality of the different economies around the world. The development of the means of transport and communication technology on a global scale makes the emergence of globalisation as an inevitable circumstance while the emergence of internationalisation as a concept is observed more to be need based and involuntary in nature. Internationalisation contributes in enhancing the use of any device or product owing to the existence of a common language or cultural norms (Andersson et al., 2014). On the contrary, globalisation focuses on formulating a strategy that helps in promoting a product or service in the global marketplace. The action involves the use of potential sales and marketing strategies that would contribute in effectively marketing and promoting the product or service at the global marketplace. Further, internationalisation also reflects the involvement of staffs like software developers, producers and also the generators of digital contents. The globalisation activities are more concerned with the involvement of marketing and sales personnel (Knight, 2004).
Globalisation and internationalisation are observed to be concepts that are interlinked and mutually adaptable. Internationalisation contributes in formulating idea of globalisation and also contributes in operating as an effective agent of globalisation. The close relationship between globalisation and internationalisation can be observed owing to the faster and increased progress of globalisation in the economic paradigm, emergence and growth of new technology and also the increase in frequency of cultural exchanges between the different economies (Huang et al., 2013).
The impact of globalisation in the tourism industry as a case reflects increased flow of tourists among specific regions owing to cultural exchanges and also the development of innovative tourist attractions and spots. On the environmental front, the impact of globalisation activities are studied based on the chances of using alternative resources or fuels, the development of programs enhances environmental awareness and also the conducting of effective environmental and urban planning activities. Moreover, globalisation impact on the natural environment also signifies the generation of sustainable development, preservation of the natural habitat and also the optimal utilisation of land resources (Edwin & Okpara, 2015). Similarly, the advent of globalisation also contributes in the development of a global cultural identity and also the development of a political system encouraging the entry of multinationals in the region. This also calls for growth of further safety and security measures that are needed to be undertaken in the global markets. Finally, the advent of globalisation also contributes in increasing the level of competitiveness among the business institutions having branches and also operational along different international markets (Mihajlovi? & Krželj – ?olovi?, 2014).
Internationalisation of business activities are mainly conducted along different stages outlined as under.
The initial stage concerning the development of international business relates to internationalising the trading of inventories. Business or commercial transactions conducted on an international scale by the business institutions ideally contribute in internationalising the scale of business operations. The export and import of merchandises by companies contribute in internationalising the trading activities. Internationalisation of business activities also relate to the development of effective alliances with international supplier groups and also the licensing and transfer of global technology and know-how (Bell et al., 2004).
Institutional Business Environment
The institutional environment of a business organisation are essentially constituted by laws and regulations concerning the acquisition of different types of property resources, licensing of business operations, recruiting of employees and also the rules and regulations governing the importing and exporting activities conducted by the firms. Similarly, it also includes the development of contracts with supplier firms and also rules governing the generation of taxes and also licenses and fees (Ibrahim & Primiana, 2015).
Resource Based Environment
The resource based view of competitive advantage for business institutions can be effectively understood from the following illustration.
The above illustration reflects the different types of tangible and intangible resources that are employed by the business institutions for gaining of needed competitive advantage. The resources whether tangible or intangible in nature need to fulfil the attributes as indicated by VRIO (valuable, rate, inimitability and also the organisational structure and policies) for helping in the accomplishment of competitive advantage in a sustained fashion (Morrison, 2011).
Business institutions face considerable challenges in their endeavour to operate in a global environment.
Business institutions endeavouring to expand their operations along the global environment are required to effectively adapt to the changes in the regulatory and legislative climate of the different regions around the world. Differences in legislations and regulations associated with export and import, taxation laws and also along in the dimension of human resource and pension schemes require the managers and owners of business institutions to rightly comply with such for conducting business activities. The existence of different types of environmental regulations in diverse regions requires the business institutions to design effective recycling and waste disposal programs. Similarly, the business institutions are also required to incorporate energy efficient lighting and cooling systems for meeting the sustainability and cost reduction objectives (Edwin & Okpara, 2015).
The business institutions operating on a global scale are also observed to face considerable challenges owing to existence of different types of cultures and languages. The existence of diverse languages affects the level of communication between the staffs thereby creating problems in the conducting of business operations. The business managers are also required to understand and respect the cultural paradigms of the different nations such that the same helps in reduction of internal conflict and in meeting business and organisational objectives in an effective fashion (Ibrahim & Primiana, 2015).
The organisational managers requiring operating in a globalised and internationalist business environment are required to operate in a flexible fashion based on adaptation of new business cultures and also through understanding the needs and expectations of global consumers. Further, the organisational managers are also required to formulate effective strategies for employing a diverse workforce. The managers are required to focus on the development of training programs for enhancing the skill and knowledge base of the workers such that the same would help them to operate in a multicultural framework. Generation of different types of policies relating to work-life balance would also help in encouraging the staffs for generation of effective productivity (Ch. et al., 2011).
Conclusions
Effective analysis was carried out in the paper regarding the impact of globalisation and internationalisation on business institutions and the implications of managers thereof. Further, conceptual discussions related to the characteristics of institutional and resource based environment are also rendered in the paper along with the generation of a summarised understanding of globalisation and internationalisation.
References
Andersson, S., Evers, N. & Kuivalainen, O., 2014. International new ventures: rapid internationalization across different industry contexts. European Business Review, 26(5), pp.390-405.
Bell, J., Crick, D. & Young, S., 2004. Small Firm Internationalization and Business Strategy. International Small Business Journal, 22(1), pp.23-56.
Ch., M.A., Faheem, M.A. & Dost, M.K.B., 2011. Globalization and its Impacts on the World Economic Development. International Journal of Business and Social Science, 2(23), pp.291-97.
DE WIT, H., 2011. Globalisation and Internationalisation of Higher Education. Revista de Universidad y Sociedad del Conocimiento (RUSC), 8(2), pp.241-48.
Edwin, A. & Okpara, A., 2015. Strategic review of the impact of globalization on the sustainability of communities and business organisations. International Journal of Business and Management Invention, 4(4), pp.55-62.
Fok, W.-k.P., 2007. Internationalisation of higher education in Hong Kong. International Education Journal, 8(1), pp.184-93.
Huang, F., Finkelstein, M.J. & Rostan, M., 2013. The Internationalization of the Academy: Changes, Realities and Prospects. United Kingdom : Springer Science and Business Media.
Ibrahim, R. & Primiana, I., 2015. Influence Business Environment On The Organization Performance. International Journal Of Scientific & Technology Research, 4(4), pp.283-93.
Irani, F.N.H.A. & Noruzi, M.R., 2011. Globalization and Challenges; What are the globalization’s contemporary issues? International Journal of Humanities and Social Science, 6(1), pp.216-18.
Knight, J., 2004. Internationalization Remodeled: Definition, Approaches, and Rationales. Journal of Studies in International Education, 8(5), pp.5-31.
Mihajlovi?, I. & Krželj – ?olovi?, Z., 2014. The impact of globalisation on the development of tourism within social and economic changes. European Scientific Journal.
Morrison, J., 2011. The Global Business Environment: Meeting the Challenges. United Kingdom : Palgrave Macmillan.
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