Differences Between Globalization And International Business example essay topic

... new in international business and had to be dealt with at every time of history. But if there is no such thing as the dawn of a global economy but instead a mere transformation towards best practises in a more and more interconnected world, the differences between globalization and international business are questionable and can^aEURTMt be fully described with unprecedented environmental conditions. b) Globalization as a Force of Social-Cultural and political Change Globalization may therefore be better described as a sub-process of international business, which is not only economy related but reflects also the current shift towards global homogeneity in social-cultural, technological and political issues. It could be understood as the development towards more dependence derived from the increased exchange of goods and information and the notion, that each trading nation^aEURTMs actions may influence the flow of capital and goods between each other. It may not necessarily result in the building of a global economy or new world order but might lead to further integration in some areas and contradictory movements of fragmentation in others (Held et. al 1999).

By some it is therefore simply referred to as the driving force behind various changes of modernity and the redistribution of power from national governments to major conglomerates that will increasingly dominate the flow of capital, resources and commodities on a pure cost bases and without any ties to their former home nations (Economist, Sept. 2001). It is in particular that development, that causes concern and that gives the term Globalization its controversial political dimension, International Business is not associated with. It expresses the fear by some, that the sate, over which democratic control can be exercised, could be reduced to a mere provider of economic conditions most suitable for businesses at the expense of social issues and national identity. It incorporates the concern, that global organisations might reach monopolistic size in their effort to achieve economies of scale and dictate the flow of resources beyond the influence of a single nation. Evidence exists, that such a system of global governance has established within the global commodity chain outside of international institutions, described by Yeats, 2001.

However, no evidence has yet been brought forward, that companies can successfully invest, produce or trade with a sovereign nation, without establishing social relationships or against the will of the nation, even though such attempts might be recognisable. Further, monopolistic tendencies are nothing new to international business and markets have dealt with them already in favour of competition or state control. The theory of efficient markets, combined with democratic control of the majority in fact contradicts the assumption, that markets, may they be local or global, could ever turn into something less accepted by the people than before. The formation of transnational companies beyond the control of governments or market dynamics, is therefore an unconvincing scenario, which is neither sufficiently supported by historical data nor does it take the possibility of backlash movements into account. The changes visible so far have merely resulted in the facilitation of international business which are remarkable in terms of their degree, but they have not necessarily elevated the basic principals on how trade is conducted on a new or revolutionary level.

The described forces towards globalization and their impacts on politics and social-cultural issues have always existed in international trade history and large influential trade organisations operating on a global scale are known in Europe ever since e.g. the Order of Templars. Obviously, the increasing openness of boarders and the affordability of travel and transport have created an exchange of cultures, products and technology and brought the world closer to a common technology standard and homogeneity based on common taste. But it can be questioned whether that process is new in international business and whether its degree has let to a reduction of national identity amongst people or uniqueness of nations or has simply contributed to further diversity within existing cultures. It appears further questionable, whether the alleged dramatic shifts in politics towards more liberalization exist and whether they will be sustainable and result in a truly unprecedented and continues level of homogeneity.

Due to the fall of communism and the current, so far still accelerating degree of international exchange, this era may one time be referred to as the beginning of an unprecedented political and social-cultural transformation process - compelling evidence for such a development however is yet to be brought forward. C) Conclusion None of the globalization al theories is therefore entirely convincing, that the global economy is currently facing challenges or opportunities, or that the equilibrium of the historical market forces may be brought out of balance in favour of a new world order. The lack of any clear definition of such a ^aEURoenew global economy^a EUR.