Essays on Globalization and Its Major Challenges Assignment

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The paper "Globalization and Its Major Challenges" is a perfect example of a business assignment. Organizations across the world have moved their business across domestic boundaries. Businesses have moved from local to global. Business and trade have changed owing to such a transition. This has helped organizational growth but has also posed many challenges that have led businesses to strategically design their operational processes. Globalization witnessed the rise of transnational and multinational companies. Transnational companies have their business functions in different regions, but sell products and render services across the globe.

For example, raw materials are procured from Africa, assembly is done in the Middle East and the final products are sold in Europe, UK, Asia, etc. A multinational company produces and sells in the country in which it operates. This has led organizations to leverage cost advantage. Though this is one of the important factors why firms want to expand their presence beyond national boundaries, other reasons might be greater market access, new market opportunities, saturated domestic market, etc (Jones, 2010). Question 1 Firms have internationalised owing to various market opportunities and trade facilitators.

Firms have moved to a global platform owing to internal and external factors. Internal factors are firm-specific i. e. it refers to internal reasons why firms expand their business operations across domestic boundaries. External factors are market opportunities and factors that have facilitated the globalization process. Firms would globalize if such external factors complement their internal reasons. The external factors that facilitate firms to internationalise are: • Reduced trade barriers – Some countries provide tax breaks and special subsidies to foreign companies that invest in other countries.

Such perks are provided as the domestic companies and the economy are benefitted from foreign investment. • Capital and labour mobility – After the formation of the World Trade Organization, trade across nations was simplified that allowed greater access to foreign capital and labour. The increased mobility of such factors of production has led firms to internationalise. • Improved transportation – The transportation cost over the years has decreased owing to large cargo ships and air transport.

References

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