Impact of Globalization on Business Free Samples for Students

Question: What is Culture and Globalization? How Cultural Impact of Globalization affect Business? Answer: Globalization Globalization refers to crossing the boundary lines of domestic markets and move into the international market to explore new opportunities. It is also known as integration of people, culture and business of two different nations. It involves foreign direct investment into the host country to encourage international trade (Sheffield, Korotayev Grinin, 2013). The drivers of globalization are: Technological Drivers: The growth of internet technology and other innovations have paved the way for the domestic sellers to sell their products and services into new boundaries. Political Drivers: Lenient and Liberalized foreign trade policies in the host country has motivated individuals to invest in foreign countries. Market Drivers: For the growth and expansion of the business it is very important that the seller targets a new customer segment and it cannot be possible within domestic boundary. Foreign market provides an opportunity to fulfil the needs of new customers, exploit new resources etc. Cost Drivers: Cost of operation of the organization depends on the size of the economy of the country. In order to gain cost advantage and achieve economies of scale, companies rely on expanding their operations in new countries (Kozarova, 2013). Culture Culture refers to the civilization or a way of living that an individual acquires through living in a particular society. Culture differs from country to country or society. Culture highly influences the human ideologies, their behaviour and thought process is very much dependent on the culture of the society in which they live (Csikszentmihalyi, 2014). The elements of culture are: Language: Languages are standard sound, words and sentences that encourages communication within a group of people or society. It vary from culture to culture and usually inherited from one generation to other. Symbols: Symbols forms a particular meaning to the people who live in a common place and share the same culture. Norms: Norms refers to the set of rules and regulations that directs the behaviour of an individual and it restrict them to cross the cultural boundaries of the society. It creates an obligation on the part of an individual to do or not do certain things. Values: Values are a set of traits and characteristics that an individual adopts by living in the society over a period of time. Beliefs: It refers to the assumptions or thoughts about something that an individual perceive it to be true. Cultural impact of Globalization The impact of any countries culture is very significant on the international business. Globalization in any country provides easy access to quality goods and services to the local people which they otherwise could not get but the major concern in developing or poor countries are that they are eating up local manufacturers and industries. Availability of the financial resources and better technology have enabled the producers to produce quality final product and sell them at a cheaper rate than the local industries. Globalization not only affects the local culture by providing goods and services but also expose the local audience towards foreign culture in the form of art, music, publications etc. The influence of foreign culture has led to the erosion of local cultural identity of a place. The cultural impact of Globalization are: Positive Impact- Globalization has cleared the way for many domestic consumer and provide them with opportunity to explore and diversify into the new market. It also promote new employment opportunities which directly contribute in the economic development of the country. Consumers have wider choice to choose from the products and services. There is also a synergy and integration developed between the financial, technological and human resources of both the countries. Negative impact- Globalization has been a great opportunity for organization who are seeking cost advantage. In order to achieve a competitive position, companies try to exploit the human capital in developing country by paying them less (Collins, 2015). Many multinational corporations are only interested in fulfilling their commercial interest and as a result they are damaging environment and recklessly using the scarce natural resources. Globalization have laid a deep impact on the local culture of the country. The ideologies of western cultures have affected the local cultural norms, values and beliefs. The individualism of a country is lost. Impact of culture on Business Language: In international business language and mode of communication plays a very significant role. If the local language and communication means is not adopted then the organization will not be able to convey their message to local audience (HULT, 2017). Local Taste and preferences: In order to successfully launch a product or a service in to the market it is very important that the needs and demand of the customers are identified well else the survival will be difficult. Values and Norms: Organization who expands into foreign market have to respect the local values and beliefs of the particular country and take business decisions keeping them into the mind. References Collins, M. (2015). The Pros And Cons Of Globalization. Retrieved from https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#6055d52accce on 25 April 2017. Csikszentmihalyi, M. (2014).Society, culture, and person: A systems view of creativity(pp. 47-61). Springer Netherlands. HULT. (2017). How cultural differences impact international business in 2017. Retrieved from https://www.hult.edu/news/cultural-differences-impact-international-business/ on 25 April 2017. Kozarova, I. (2013). DRIVING FORCES OF GLOBALIZATION. EUROPEAN JOURNAL OF GEOPOLITICS. Retrieved from https://ptg.edu.pl/wp-content/uploads/2015/03/Nr_1_-_artyku%C5%82_1_Kozarova_I.pdf on 25 April 2017. Sheffield, J., Korotayev, A. Grinin, L. (2013). GLOBALIZATION Yesterday, Today, and Tomorrow. Retrieved from https://www.hse.ru/data/2013/05/23/1299088719/Globalization.pdf on 25 April 2017.