Globalization Influence On International Business

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How does the globalization influence the international business? Globalization is primarily an economic phenomenon, involving the increasing interaction of national economic system through the growth in international trade, investment and capital flows. A rapid increase in cross-border social, cultural and technological exchange is part of this globalization phenomenon. Globalization has impacted the present world in numerous ways. These are: reduction of trade barriers permitting free flow of capital and services across national frontiers; creation of environment conducive to free flow of capital; formation scenario allowing free flow of technology among nation states; and development thrust in which free movement of labour can take place…show more content…
When a corporation or company is registered in more than one country or has operations in more than one country, it may be referred to as MNC. All the operations like production, distribution and marketing are conducted on a very large-scale. Research and Development (R &D) plays a special role as it contributes a lot to the large-scale production. Globalization thus influences the international business by integrating the economies of different countries. This is an interesting scenario where it uses the finance from one country, infrastructure from another country and labour from different country. Also, it designs the product in one country, parts of the product in another country and finally assembles the product in a different country. International business does face problems such as transfer of technology and goods, restriction on the outflow and inflow of capital, political instability, limited quantity (quotas) of imports, trade restrictions imposed at the government level . Any changes in the government policies, new technology, political environment and rise / fall in foreign exchange finally have a great impact on the international…show more content…
This not only allows them to make maximum profit, but also opens up a global market of people with the higher disposable income to buy more goods and services. The improved communication with the help of latest technology has spread widely throughout the world, allowing international business campaigns to be co-ordinated from a fixed base in the domestic country. The internet and other communication medium have opened up entirely new world of business with endless potential. Globalization has changed the people way of shopping, specially by encouraging online shopping from sites like www.flipkart.com , www.amazon.com etc. These online sites are providing best deals to the consumer with a vast number of variety options from global market .Globalization has intensified the competition in the market with the fact that there are many new competitors across the world in addition to domestic competitors. Nowadays business is more challenging than ever before due to efficient distribution and transportation system. The making and receiving of payments are faster and more secure with the help of internet or mobile banking. Finances for the consumers and traders are readily available due to globalization of financial institutions. Financial institutions are willingly spreading their capital in the international market to reduce their overall level of risk. This is a healthy trend
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