The paper "Globalization of Chinese Companies" is a good example of a business case study. The emergence of China is an exceptional and historical occurrence. The whole world is focusing on China because of its development rates of about nine to ten percent over the past several years (Lin 2004, p. 14). China has risen to a global superpower such as the United States. Experts believe that the sustained development of China is a key example that will result in a constant move of the financial hub from the Western countries to Eastern countries.
China decided to go global in an effort to expand its market. Globalization surfaced as a key strategic subject for Chinese business soon after the global recession breakout in 2008. Experts stress that opportunities formed by financial globalization and State’ s unremitting efforts to grow a good market financial system have helped China’ s economy to achieve a lot in a short period. Integration into the international economy has characterised China’ s reform in history and exposure. The growth of EMMs (emerging market multinationals) and the surfacing of a multi-polar globe have transformed the circulation of world financial power.
Thus, globalization has become the current trend in the world today. Globalisation refers to the process where a firm considerably depends on foreign markets for its operations to obtain and improve its power in international production, managerial skills, and resource distribution (Zahra 2005, p. 20). Globalised enterprises do not restrict themselves to local markets in their approaches, invention of strategies, organisational culture, and decision making. Instead, such companies utilise the international market as the only context for activities. Globalisation level of an organisation is measured by its managerial and operational abilities in the international market.
Operational capabilities reflect the level of dependence on foreign markets while managerial abilities reflect managerial expertise, resource distribution, and business allocation. Global managerial and operational abilities include international vision, R& D, coordination capabilities, brand management, and cross-cultural communication. Based on the ratio of foreign business in the overall dealings of an organisation, globalised companies are categorised into any of the three globalisation stages namely: the original stage, export-oriented, taking part in globalised businesses or concentrating on value-chain optimisation. The globalisation of businesses in China can be traced to the original stage of the State’ s opening up and transformation.
The government declared the ‘ going out’ approach for companies. Chinese businesses did not start to accelerate their international attempts until the 21st century (Lin 2004, p. 17). The 2008 global recession presented China with an opportunity to venture globally. Since then, China has recovered effectively compared to other nations that continue to recover slowly. This position has presented Chinese businesses with an exceptional opportunity to expand on the foreign stage. The State’ s globalisation has astonished the whole world.
Consequently, China’ s FDI (Foreign Direct Investment) has increased recently (Zahra 2005, p. 25). Phases of Globalisation The Initial Phase A business in the initial phase is already shifting into foreign markets, although its global operations are small (Clarke 2003, p. 494). Additionally, it boasts modest international managerial and operational abilities. Most Chinese businesses are currently in this phase.
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