Impacts Of Globalization On Business

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Globalization is a small term after all, but has a broader definition acting as a catalyst to progress and growth transforming the world in general. The concept of globalization is not something new for most of the people as this is gaining momentum in today’s era. Globalization has resulted in interrelation and assimilation between world economies and business. Globalization in general has a significant role in advancements of a country and improving the lifestyle of people. In the business world, the benefits of globalization are not just limited to profit maximization, but also provide other advantages equipping business to carve a niche for itself in today’s highly competitive market. The most significant benefits of globalization on business…show more content…
Every business, in order to survive and maintain its market share, must have a competitive lead apart from other firms. An increase in competitiveness boosts the efficiency level of the business as they can produce their masterpiece goods or render services that are well known. Herciu and Ogrean (2010) wrote in their article that expertising in specific field of work or products tend to improve efficiency on a large scale. In other words, producing merchandise or rendering the services of their best and specializing in it allows the firms to reduce the cost and increase the productivity as production is done large scale on a daily basis. Consequently, fulfilling the demands of customers within short notice and less cost, enable to develop a brand loyalty from customer’s part increasing sales and thereby profitability. Therefore, higher efficiency level is also a competitive tool for survival in modern business which has become more convenient through the stimulation of globalization. Another advantage of increased competition is the benefits of economies of large scale production. Firms production of goods and services on a huge basis can increase the output by reducing cost at the same time. Heakal (2017) wrote that production costs are reduced on large scale production achieving economies of scale. In other words, cost of factors of production such as land, labor, capital…show more content…
One of the important focus of outsourcing work is to have a better control on business expenditures. Labor costs related to hiring and training as well as other business expenses can be minimized by contracting operations to another party. According to Zick (2009), consultation, R&D and administration costs are reduced while outsourcing. In other words, delegating work to a third party tend to minimize expenses related to product developments, communication, control and so on. Time and cost relating to managing daily operations and employees are much lower. Outsourcing eliminates the need of recruitment of professionals and development of software as tasks can be done within short notice outside. For example, an American company can contract its call center work to India, where it is done much cheaper without recruiting separate employees and not wasting much time and resources on these non-proficient areas. Financial complications can be solved in an efficient manner without causing a debt to the business. With contracting operational works, capital expenditures are much lower, reducing the cash flow, providing more liquid money to the business to do other investments. Another advantage of outsourcing is the concentration on proficient areas of work by business firms. While contracting out supporting operations, business can strengthen its profitable areas and devote

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