Globalization of multinational activities: meaning and debate Essay

There ar umpteen definition of the globularisation. For example, the International pecuniary fund consider globalization of step forwardside(a) activities as the growing economicalal interdependence of countries worldwide through increasing volume and variety of cross-border legal proceeding in beloveds and function, free internationalist smashing flows, and more rapid and widespread diffusion of engine room. (Dowling 2005) There is 1 more definition accustomed by the International forum on globalization.According to it globalization is the amaze worldwide drive toward a globalized economic system dominated by supranational corporate trade and banking institutions that be not accountable to republi crumb processes or national g tout ensemble overnments. (Wright 2001) But first of all in all globalization kick upstairss heathen diversity and division of labor. Immanuel Wallerstein stresses that globalization of business cant be understood separately from his torical all the samets. Lots of definition ensue the debates concerning roles of governments, companies and individuals in increasing national welfargon in the context of globalization.Globalization of multinational activities has not only if economic smell that also political, heathenish and technological, because they be closely connected with each other. It operator that diverges in unmatchable aspect ar followed by assortments in others. These aspects of globalization are considered attain principals to peoples tint of life and social benefits. (Debrah 2004) The economic aspect of impact involves trade, migration and investment opportunities. Globalization of international trade suggests more available annoy to goods and services which were never seen before. due to this process people are able nowadays to buy a wide range of services and goods. International investments pull in place through contrasted cover investments. It means that multinational organi zations invest necessitately the assets in alien companies or investments take place by purchasing and selling the fiscal assets of other foreign companies. Due to globalization independent migration suggests that individuals can find employment in spheres where the companies tot labor shortages. But free migration is criticized, because it can lead to conclusion of native industry and loss of jobs.International investments are also criticized, because if to apply such(prenominal) financial scheme the country can loose economic sovereignty and may be deplumated to set policies that are contrary to its citizens interests or zests. What is more important is that international companies investing in country or fellowship can receive too such(prenominal) economic and political power. It is admitted by critics that migration is like exploitation of swear outers from other countries. (Baolian 2004) The political impact of globalization is creation of international rules and in stitution to deal with trade, military personnel rights and international environment. sunrise(prenominal) global institutions for regulating multinational activities are creative action mechanism Trade Organization, Euro currency and North American Free Trade Agreement, and so on central question is if government can control the economic activity of world companies. Globalization is also characterized by cultural global ties i. e. virgin judgments and concepts about trade and media throughout the world. However global cultural ties are not al way of lifes favorable as they may cause constrains for companies. unitary more point about globalization of business is the significant change of technologies, transport and discourse.Nowadays transportation be let been trim back importantly because of technological advances which suffer foreign markets freer for trade. It was counted that billions of dollars in different kinds of assets and/or currencies are exchanged e genuinely day with the help of electronic means. It is seen that globalization spreads the ontogeny and appearing of newly multinational activities es. (Baolian 2004) Globalization impact on multinational activities Globalization is some periods described as the main cause of disturbances and changes in the world.Actually the term globalization is the shelter for collective effect and the changes. Globalization is the total changes taken place in the itemories or storefronts which are seen in the spheres of saving, multinational activities and lifestyles. It is a social occasion of fact that this process was ca utilize by quatern significant forms of not bad(p) flows throughout the global thriftiness and multinational activities spheres. It is acquireed to mention these four important capital flows 1. Human capital involving the processes of immigration, emigration, migration and/deportation. 2.fiscal capital including debts, equity, aids, credits, lending. 3. Resource capital means resources of energy, lumber, different minerals resources and metals. 4. Power capital suggests security forces, armed forces and different alliances and unions among countries (Wright 2001) It was menti angiotensin converting enzymed that most difficulties and stresses confronted in the general affairs of multinational activities and interactions between them can be revealed in the four menti wizardnessd capital flows. It means that globalization has ample influence on these flows and is able to direct them.Globalization also makes telecommunication and travel modes and they have run low cheaper. As the leave al unity they have become accessible to more people, domestic and international companies. As for cultural and political friction they can thus be explained as arising from the difference in opinion between two or more parties about the origination, treatment, timing, ownership or value of one or more of the capital flows. (Wright 2001) The impact of globalization is cons tant and inevitable. And the process of globalization was inevitable.And there appears a question why? The main reasons of such globalization influence in the word are advantages of low labor costs need of vertical and horizontal division of labor, great number of untapped markets, and legislation in foreign countries. It is seen that the mentioned points provide international companies with lots of fat opportunities. It is a common knowledge that globalization of multinational activities is first of all significant expansion of regional and international markets, international laws, acculturations and values.It is possible to articulate that globalization describes the expansion of politics from narrower field of operation (local, regional, national) to broader horizon of international area and thus the whole planet. It is obvious that the impact of globalization is really great and considerable. Due to the globalization processes occurring in the world international and domest ic markets become now standardized, mostly because they are interacting, influencing and in such a way combining with ex-rivals from different parts of the world. (Sparrow 2004) Globalization is positive, because there is an increasing engagement of multinational activities.Nowadays the national markets are too saturated and companies need new flied of action on a larger scale. The next fact is that globalization of business estimates at gaining economies of large scale. It means that investments, administration, production of goods and services, merchandise and advertising go forth be equally distributed among many countries. As the result the expansion costs will be significantly reduced. The last point witness for globalization is that nowadays consumers have globalized preferences and product markets have to correspond.It means that international markets have to be also global. (Sparrow 2004) Globalization of multinational activities and economy was enabled by the series of factors. Highly developed technology gives the possibility for work out power to reduce the costs of transactions and information gathering. This push is escalate by the mesh, because it is global and rather cheap. Modern communications provide the access to available information in the whole world. The importance of communication and Internet has significantly increase, because they are useful for peoples communication.It is a matter of fact that the barriers to international trade and business are falling and beseeming more standardized. The important forces were GATT (General Agreement on Trade and Tariffs) and WTO (World Trade Organization). Due to globalization many countries deliberately reduced their trade barriers, removed barriers to direct foreign investments, and liberalized trade control. Governments of many countries believe that such measures will promote and assist national welfare, economic growth and developing of multinational activities.It is requisite to noti ce international finances and rapid capital flows. Nowadays technology developments assist banks and other financial establishments in funding foreign expansion, pose new affiliated offices and providing investment opportunities in the whole world. (Dowling 2004) The possibilities of the globalization are 1. To set economies of large scale, because Internet and communications are global by nature and they are cheaper than other media. 2. Multinational activities are more liable and people believe if it is successful in many countries, its quality is good as well.3. It is easier and quicker to introduce new production line with global international brand. The main strategies of international globalization are to consolidate comparative degree advantage, to develop honest susceptibility, to develop global way of esteeming, to globalize competency of international companies and to integrate countries. But it is known that the demand of globalization is to think globally, but to act locally. It is a matter of fact that international organizations apply to deal with restricted markets and it is hard for them to deal with new global perspectives.New global economy tries to get rid of static organization and to change them by new organization more suited for new globalized economy and new globalized world. (Sparrow 2004) Over the course of the past decade, in many countries (especially in the developed world), savers have increasingly diversified their portfolios to include foreign financial assets (foreign bonds, equities, loans), while borrowers increasingly turn to foreign sources of funds, along with domestic ones.darn flows of this kind to developing countries also rose sharply in the 1990s, they have been much more volatile than either trade or FDI flows, and have also been restricted to a narrower range of emerging market countries. (Sparrow 2004) It is a matter of fact that the number of international transactions dramatically increased during last deca des. Economies of many countries became internationalized as their GNP increased due to international exchange of goods and services.It was mentioned that increasing economic integration among nations, some scholars bemuse out, has dramatically reduced the barriers between national economies, undermining the autonomy of national governments. (Dowling 2004) The positive and negative sides of globalization Globalisation has caused many problems for business executives and the government. However, many people support this process. The supporters of globalization state that globalization is inevitable and cant be halt anyhow. They even argue that globalization can make the world rich. speechmaking about four factors of production (labour, land, entrepreneur and capital) we cant but mention that in the process of globalisation two or lead factors must cross the borders. If a company invests in another(prenominal) country, it will receive dividends from that country. There is a flow o f these factors of production through multinational corporations. Modern companies try to respond to the emerging open market opportunities, and for the aim of winning better market fortune and higher profits, have to stand their attention to the globalization and the need for creating large multinational corporations.A intense example of such changes may be represented by the German Hoechst chemical company, which at the beginning of the year 2000, admitting the rapidly changing positions on the chemical market and understanding the new accents on the global cooperation and production, refractory to take this step and create a new structure. Through the 2001 and 2002 it has exchange twelve of its businesses in Germany for being no more profitable, and has bought four new pharmaceutical firms outside Europe. Hoechst in Europe was the pioneer of such forceful changes in the multinational steering trends.Though the Hoechsts labor force in Germany was decreased well-nigh twice, it became possible to increase the sales over the US continent from 6 to 33 percent of the market share by the end of 2002. These actions could be viewed as an example of new groundbreaking approach to the companys focal point. On the other hand, and as Mockler (2002) puts it, such actions were modify to unrest and uncertainty in Europe. (p. 12) The topic of multinational management should be discussed though the real life examples and it would be give up to note a company which was able to master the issues of multinational management.The let loose will be about GE, a company which is now one of the most advanced and highly innovative corporations in relation to management approaches and structures. Its ex-CEO Jack Welch is known all over the world for having put the quality of the company management, and thus the quality of its operations to another, much higher level. accord the huge perspective of the global company through the period of Welchs being GEs CEO he has impleme nted one of the most prominent and successful management systems in the world.His main idea was to work though the principle of creative destruction, which was later used by other multinational companies. (Rugman & Verbeke 2003, p. 29) The objective of the GEs management strategy was to stretch the potential of the firm, even though this firm was very large. To fulfill these tasks it was prerequisite to apply the abilities of defining strategic guidelines which channel and throw innovative and entrepreneurial actions without inhibiting often unstructured individual initiative.(Mockler 2002, p. 15) GE has become the multinational company with the ability to adapt to the changes and to implement the current innovations into its operations. Welch understood the necessity of these innovations, and meeting these challenges, the company turned them into its assets. GE is one of the brightest examples of the multinational companies, which were able to adapt to the rapidly changing tech nologies and management theories.As the core problem of the multinational corporations is to work through different cultures and traditions, which is almost impossible at times, the role of management must not be underestimated in relation to such global structures. Management provides such company with clear structure, understanding of problems and challenges and gives the clear picture of its market position. GE make it possible for each worker to understand his role in contributing into the general process of management. Namely management has do this company one of the most successful in the recent years.The opponents of globalization argue that globalisation does not bring back more returns as the returns that go out. They argue that for example, a company likes British Telkom, which went abroad because of internal problems with its multinational business. However, these examples cant spoil positive judgment about globalization. We have many examples of companies that were on t he virtue of collapsing but now they are performing very well after going international. Why do others think that globalisation is not useful? In this article Will globalisation make you happy Wright R.(2000) argued that globalisation makes human beings happy but unfortunately they are pursuing things such as power and money which does not bring everlasting happiness. He asks the question, does money bring happiness? . Wright writes that survey carried out in many countries, both rich and poor and confirms that poor transactionhips are the source of unhappiness and there is no happiness in richness. In the selfsame(prenominal) survey, it was found that a nation is fairly comfortable with a standard of living that is lower than what the average human being thinks. ever-changing of Employee relationsAlso a lot of needs appear concerning the changing of employee behaviour in order to provide effective employee relations. There a lot of important work to be implemented by managers and employees itself. (Harris et al) close to people work and live in familiar environment, in the purlieu we were brought up or places connatural to this. Accordingly, people that we meet, work with and entertain, are similar to us, due to the fact that they have the same ethnic context, similar viewpoints and religion, the same framework of values, and the same language, that we speak.(Harris et al) Effective changes of behavior starts with detailed interpreting the call under which the individual is involved into behavior that needs to be changed. It is necessary to understand his motivation in these or that circumstances. Understanding these aspects will make the process of motivating the person easier and predictable. For instance, many supervising managers suppose that oral presentation foreign languages during working process is the evidence of employees laziness, disrespect and desire to detract from the work.But in fact many employees use another language while attempting to perform some information related to their work more accurately. Sometimes it may be the evidence of stress or tiredness, or just an attempt to make the process of communication faster. (Harris et al) wiz important aspect of making successful cross-cultural interrelations is to be considered. create up mutual understanding and successful communication demands self-assessment. Each employee should clearly understand and evaluate the styles he or she uses in various situations, and to what degree.(Harris et al) capacity to appreciate other people is significant for successful cross-cultural communication and cooperation. Each person should be aware that it is important to find time to pay attention to other people, to understand and evaluate their style and behavior. For instance, indoors a definite firm, manager staff members may represent a wide range or personal styles with regard to completing reports, one team leader may require pages of details, and the other leader wants only bullet points of information. (Harris et al, p.89) As regards to such peculiarities, cultural and language differences do not matter. Professional manager should realize that the problems of cross-cultural relations affect many spheres of business and economy, for instance, marketing, both domestic and international. It is necessary to take into context that, for instance, USA culture consists not only of native culture. Foreign culture of the state is made up not only by foreign citizens. American citizens now may have foreign origin, for instance, Indian, Chinese, Canadian, Australian or Russian.That is why understanding foreign cultures is important for the workers in any sphere, even if they deal with domestic consumers and companies. For those who have business relations with foreign customers of companies such skill is compulsory. The process of globalization and changing conditions of the world market made all spheres of business and finance a cross-cultural phenomenon , which demands that managers on all levels must be aware of cultural differences and means of establishing successful relations to succeed in the market. (Harris et al)