Globalization is an international business phenomenon that is becoming increasingly impacting the international business thereby influencing many countries involved in international business. Globalization can be described as the process of businesses or organization developing international influence or operating at the international level. Factors such as advancement in technologies, telecommunication, and transportation have facilitated globalization effects on international trade. The impact of the globalization is highly felt due to increasing interaction at the international business level. These impacts are felt by many different countries that include developing, developed and emerging economies. Developing and emerging economies are affected by globalization at various level and these include at consumer and business level. An exploration of the impact of globalization on consumers and businesses within the developing and emerging economies show that there are both negative and positive impacts. There are also some theories that explain the impacts of globalization on international business and consumers. The following paper explores the impact of globalization of international business on consumers and businesses from developed and emerging economies.
The impact of globalization on business and consumers has been immersed in those countries that are involved in international business. Impact of globalization can be grouped into business and consumers. These impacts are both positive and negative and are also felt at the business level and at the consumer level. There are many different throes that can best explain the impact of globalization of international business on businesses and consumers from developed and emerging economies (Beaudet, Schafer & Haslam 2012).
Globalization has widened the market for surplus products that have been produced developed and emerging economies. Globalization of the international business has increase market and trade opportunities for those developed countries that have high surplus products. The theory of capitalism explains the impact of globalization that leads to absorption of surplus products that produced by capitalist economies. Business can easily trade in the international trade thereby increasing their market share within the global trade (Kuruvilla & Ranganathan 2008). In addition, these countries can offload those business commodities and services to other developing and less developed countries. This increase the production within the counties of origin and the capital flow between these countries also increase. For instance, many developed and emerging economies have been shifting their production from heavy machinery to service industries. Heavy machinery business is given to developing countries that do on behalf of these developing countries (Joshi 2009).
Globalization has increased the capability of developed countries to invest in other economies with the aim of raising the capital base for their countries. Globalization increases the investment within the country that in turn raises the capital and business expansion. Globalization is attributed to the rising of international business investors that invest in other countries thus increasing the business opportunity and capital base within the country of investment. This implies that foreign direct investment (FDI) is highly influenced by increasing globalization of the international business. This investment increases long-term investment within the country leading to the flow of capital between countries involved within the investment (Saggi 2002).
Globalization has increased the competition among developed and emerging economies thereby increasing the quality of products. Businesses within many developed countries and emerging economies have been in continuous production and an increase in international business due to globalization intensifies competition (Ritzer 2011). The globalization increases the level of business competition that raises the quality of products that are manufactured or sold within the local market. Businesses willing to continue in international trade have to increase the quality of products and this is positive as it increases business innovation. The theory of internationalization shows the opportunity that is harnessed by globalization that enables international business competition (Peet & Hartwick 2015).
Globalization has increased business opportunities since there are many investment and competitions that cause a business to increase production. Developed and emerging economies have many surplus products that need to be offloaded to other counties. Internationalization theory also shows the opportunities that globalization presents as developed countries try in enable international business (Friedman 2008). The globalization has increase business opportunities for business and other individuals that are willing to sell their products to other countries. In addition, the globalization of various international financial factors such as payment makes it easy for international business investors to trade across the border. For instance, as a result of globalization, many different developed and emerging economies with surplus products such as machinery can be sold to developing countries easily (Foroohar 2016).
Globalization impact on the business increase innovation among businesses within developed and emerging economies. Increasing business opportunity as globalization increase investment and the market for those businesses involved in the international business. Increasing business competition also increase the need for innovation in the production of goods and services. Many developed countries are far ahead in terms of technologies and this is continually increasing with the increase in competition. In addition, many other developed countries are struggling to take a huge market share for their products and the only solution is to increase innovation to compete favorably (Varghese 2008).
Globalization has increased the mobility of resources such as human resources that have a positive impact on businesses within developed countries. Human capital or human resource is one of the most important aspects of business operating within the international business setting. Globalization has resulted in the movement of human resource as many businesses can import human resources such as labor to developed countries at a cheaper price leading to increasing the productivity of the businesses. In addition, the business can acquire cheap labor from other countries that assist in production within those countries that are currently short of human capital (Sorrells 2012).
Globalization of business has an impact on the importation of resources by business from other countries mostly natural resources from developing and less developed countries. Other resources such as natural resources are mostly obtained by developed countries from developing countries and this has been heightening by globalization. The movement of resource across the borders of countries involved in the international business has been increasing by the globalization. Many developed countries can seek natural resources that are used as raw materials from developing and less developed countries. This resource imperative is boosted by the favorable globalization of international business and these have a positive impact on local businesses. The overall effect of globalization on resource movement is increasing interdependent between businesses operating within the international business (Teodor 2009).
Widening of market as result of globalization has highly influence the impact of China international business that is witnessed on Africa. Recently, China being an example emerging economy has intensified its business operations in a number of countries within Africa. Many countries within Africa has created market for many Chinese businesses and Chinese business has also rip big from the international business. The Chinese activities have also increased the business competition that ensures that there is increased quality of goods and services. In addition, the business has also increased capital investment between countries involved in the trade. This has increased investment in the foreign counties as compared to domestic investment as shown by the figure below (Oil Prices.com 2018).
Figure 1 (Oil Prices.com 2018)
Globalization increases competition that has an adverse impact on business that operates within the international businesses. Young businesses are removed from international trade due to competition from older and large businesses. Those businesses from developed countries that have been in the international business struggle with new businesses for market share. Globalization is increasing standards of product and services and this requires businesses to increase their standards of production and only those businesses capable of adopting high quality will survive (Violaine 2011).
Globalization of international business has impacted the legal issues that have an effect on international businesses. There are many legal issues that range from sanctions; licensing trade tariffs that are enacted by various countries thus affects free trade at the international level (McClintock 2010). Many developed countries have their legal impediment that affects free trade with other countries and these have an adverse effect on that business willing to conduct business with these countries (Lechner & Boli 2012). The theory of market liberalism explains the impact of legal impediments that affect the advancement of international business. Moreover, persecution of international criminals is another area of concern as there is a varied legal provision that is used to control security at the international business level. For instance, in the case of international business coned by local criminals, the legal provisions that are used to persecute these criminals remain complex thus affecting businesses (Gribble 2008).
Globalization of the international business has resulted in cultural change that has an adverse effect on business operation. International business involves diversified business culture and this is not readily accepted by many countries that are a major market for products produced by developed and emerging economies or countries. Moreover, most of the businesses within developed sells their products to less developed countries which are often viewed as a source of negative business culture that affects business within those countries. This increases negative perspective for products from those developed countries thus affecting businesses from the developed and emerging economies. Business culture normally interacts with local culture and negative local culture caused by foreign investment normally result in a negative impact on business (Martell 2010).
Varied communication style is another challenge that results from globalization has a negative impact on businesses. Activities of foreign investors into other countries especially business activities are highly affected by communication challenge. A communication style that forms a major aspect of business culture is influenced by the individual country’s culture. Business communication that is influenced by foreigners from developed countries is sometimes viewed negatively especially those countries that were formerly colonies. This negatively impacts the business operation of these developed countries in less developed countries. The theory of constructivism takes the communication style to the next level by explaining the role that language and other social factors plays within the globalization context. According to this theory, globalization has resulted from the construct of social aspects such as culture and language and therefore, globalization is highly determinants of communication style (Overland 2016).
Globalization has led to the spread of social problems that have a negative impact on businesses operating within the international business. Marxism theory explains the impacts of social problems such as social exploitation on the international business as this projects to future impacts of globalization (Peet & Hartwick 2015). Many investors from developed countries are often accused of perpetuating the notion of forced labor, child abuse, and many other social problems. This affects activities of investors from those foreign countries that have been in the forefront fighting for the right of those involved. Another theory of feminism also explains the effects of globalization on the contentious issue of feminism that is advanced by developed countries (Manfred & Paul 2013). In addition, many less developed countries are still experiencing social problems and this increases the possibility of a clash between developed countries and other countries. Most the social problems affect the business operation at the international level as most developed and emerging economies normally sanction those businesses with social discriminations such as racism, child labor and forced labor (James 2014).
Many businesses operating within the international business has experienced a high rise in security concerns. Globalization has increased the chance for criminals that con business in the name of doing business. Globalization of electronic payment methods has resulted in increase theft that targets businesses from developed countries and this highly affects these businesses. Many businesses that originate from developed countries have been coned in other countries since they are less acquitted to the prevailing security challenges within this new environment. This has affected many businesses leading to collapse or drawbacks on the business side. Moreover, investors from these developed countries are also not spared with the security has most of these investors put huge capital into a business that is highly targeted by those criminals (Lechner & Boli 2011).
Globalization has resulted in the advocacy of reduced environmental issues such as pollution. Many businesses that are involved in the international business has to meet specific requirement for environmental assessment from those developed countries. Those countries that are highly involved in environmental conservation normally limit business that has not taken precaution to reduce the impact of their product on the environment. This implies that most developed countries have international business limitations that affect business thus affecting those businesses that are unable to meet these environmental standards (Levinson & Scott 2008).
There are insecurity questions that have been raised within the United States that is majorly caused by globalization status of technologies. Globalization has come with high business insecurity that is drawn from common telecommunications and America is an example of developed country that has recently battle the challenge of political insecurity. In a conference that was graced by former US Secretary of State, the former government official indicated that hackers from major social media is posing threat to national security and businesses equally (Council on Foreign Relations 2018).
The impact of globalization on developed countries is far felt by the consumer within these developed and emerging economies. These impacts can be categorized in terms of positives and negative impacts on consumers.
The globalization has resulted in increased quality of goods as many businesses strive to meet the quality standards of consumers within these developed countries. Many developed countries and emerging economies have high-quality standards that businesses operating within the international business are expected to meet. These standards have increased due to competition within the international trade (Juris 2008). In addition, products that are imported into these developed countries have to be of high quality to compete with local products. This has resulted in a continuous increase in the quality of products. Furthermore, that business that is involved in the international business has to pass through all quality checks for them to allowed to do business within this countries and these have a positive impact on quality of products (Graham 2011).
Globalization has increased the variety of goods and services that are available within developed and emerging economies. Consumers have benefited from a variety of goods and services thanks to globalization that increase the number of participants in the international business. This implies that with an increase of foreign business investors within the international business enable products and services to increase and consumers have to choose those products that best meet their needs. Moreover, these quality goods have also diversified thereby enabling the consumer to determine the better taste product (Altinay 2010).
Globalization increases the financial solutions for consumers willing to participate in international business. Some financial solutions such as banking and electronic payment system have enabled the easy purchase of goods and services by the consumer over the international business. Consumers can now purchase goods and services from other business that are located within foreign countries thanks to easy payment and delivery system that has been enabled by globalization (Vujakovic 2010). Moreover, consumers can do international banking with ease as sending and receiving money has been made easy by many money transfer solutions. Financial solutions that were initially offered by local exploitative institutions can easily be accessed by consumers through international institutions (Berg & Ostry 2011).
Globalization has resulted in development of many different money transfer platforms that enable consumers to send and receive money globally. For instance, PayPal developed by American one of developed country has help better international business. This money transfer and many others is currently used by consumers from these countries and other country globally. In addition, the these money transfer has perfected online business thus making many online business such as Amazon stores and many other businesses. These international financial solutions also benefit institutions that are involve in international or electronic money transfer (PayPal Holdings 2017).
Globalization impacts have also contributed to some negative impacts on consumers within these developed and emerging economies. These negative impacts of globalization that are felt by consumers include cultural erosion, social problems,
The influx of products and services from other countries within the developed countries has resulted in cultural erosion among the locals. Globalization has to lead to spread of many different cultures into developed countries and consumers are highly affected as they are the consumers of products that are imported. For instance, many developed countries have allowed importation of products that come along with the culture of those producers and this may lead to cultural erosion or adoption of a different culture. Consumers with conservative character are hardly affected by this diversified culture that is influenced by globalization. Many countries produce commodities based on their prevailing culture and this is exported with the products to developed countries thereby affecting end consumer within the country of destination (Faiola 2009).
Globalization has also lead to the spread of negative social issues that affect other consumers within some countries. Globalization has enabled international trade that largely influence by various social issues and free business has also resulted in rises of these social problems within developed countries. This implies that those developed countries that are strict on social issues such as child labor are hardly affected by countries that are still involved in child labor. This leads to the sanction of such countries leading to limited goods and services that are exported to developed countries. In addition, consumers are shielded from goods produced by countries with these social problems leading to consumer affected by the limited amount of goods and services (Conversi 2009).
Security is another impact of globalization that affects consumers from developed countries and emerging economies. Globalization has increased security concerns from services such as internet and business services as criminals target people from these countries (Zimmerer 2006). In the current international business, many criminal hides in the shadow of business people to con locals and this has increased with the globalization of business. For instance, many criminals can access data through an international business such as banks leading to the incidence of theft. This has affected many consumers within these developed countries as perception is always that there are rich consumers from these countries. In addition, there is also security in terms of the quality of goods and services that are offered to consumers from these countries as an international business is currently operating many scam business that ends up conning consumers with substandard goods (Babones 2008).
Globalization has resulted in increasing price of oil that is currently affecting many different countries. The globalization has intensifies various environmental issues that is affecting the consumption of oil in many countries. Many countries now hop for electricity instead of oil and these has reduces the oil consumption leading to oil price crisis. One example of countries that has witnessed high prices of oil and oil products is the United States of America. The figure below for example shows reduced oil production resulting from low consumption (Oil Prices.com 2018).
Figure 2 (Oil Prices.com 2018)
Despite the impact of the globalization on international business within developed countries, some countries have had a limited impact of globalization. Some developed countries and emerging economies are slow to liberalize the international business across their borders. This is due to trade barriers that are still standing within this countries and there is a need to improve their participation within the international business. In addition, some countries are still faced with issues of discriminations that limit their business participation with other countries especially those from less developed economies (Vujakovic 2010).
Conclusion
In conclusion, the impacts of the globalization of international business are farfetched and can be categorized into positive and negatives. Business and consumers within developed and emerging economies are affected by the intense impacts of the globalization of international business. There are many different theories that explain the globalization and its impacts on international business and consumers. It important to understand the factors that have influenced the development and increase of globalization as this is tied to issues that are arising from international trade. Developing and emerging economies are equally affected by the globalization as there many factors that determine their involvement in international business.
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