ISYS2394 Essay on Business Globalization

Essay on Business Globalization

Globalization of businesses has become the reality that the businesses will have to face today and it is the marriage of different cultures and ideas coming together to pass on the benefits both the customers and at the same time to the organizations. Most of the organizations of today have been harping on this change and look to move into new geographical markets rather than restricting themselves to their domestic terrain. Obviously as we move out of the domestic market into a new market, the risks are plenty and it is up to the management to identify them and have  counter plans to avoid them rather than shying away from the opportunity. With the emergence of the South Asian forces becoming as cheap manufacturing hubs most of the major companies have shifted their operations in these regions to ensure that the production is carried out at a cheap cost. Another major change that has happened is that the population of the countries like China and India are on a rise and this would mean that major organizations cannot avoid these markets as the demand is huge. With the rise in the middle class consumption on a rise and the advent of the technology, globalization is a necessity that many companies will have to face in order to ensure the growth that they are looking at. While it is a great option for companies to go global and expand their network in other similar markets, they will have to equally look at the risks that they will have to face while dealing with these changes that might happen (Robert, 2010).

Organizations often do not take the necessary steps while going global. While there are short terms gains in the other market, they should also look at the preparedness of the organization in managing such a huge change. The policies of the organization should be flexible enough to adapt to the change in culture and they should be open to different practices that are being followed in that particular market. One of the safe approaches that are taken by the organizations is that they choose the market that is similar to the domestic market and has potential for similar growth (Mark, 2010). Globalization is fast turning into a defensive strategy that is adopted by many organizations in order to stay ahead in the competition. The sheer size and the opportunity to increase the customer base and the market size have forced many companies to look out of their domestic terrain and go global. Gaining the brand recognition and customer loyalty in a foreign market is another major challenge that these companies would face. They will have to establish themselves as a key player amongst the already developed local and international player. One way of doing this is to position them differently in comparison to that of the competition and create a space for them. The customers have also become all the more demanding as they have access to products from different markets by means of internet; the organizations are expected to provide goods and services of good quality at a reasonable price. One of the major changes that we have seen over the years is that the expectations of the customers on the service delivery aspect have gone up and it is the responsibility of the organizations that they give a seamless service delivery to the customers (Parker, 2009).

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One of the major advantages that the organizations have in going global is that they can make use of the ideas that are different from that of the how grown ones and create a difference in the organization for the long term gain (Richard, 2009). The organizations also will have to have a long term vision and plan while going global rather than trying reaping the short term benefits in a market and then moving out of it as the capital investment is huge. The companies will have to ensure that they keep pace with the changes that are occurring in the domestic market and the key to success in a global scenario is how easily one can adapt to the changes in the environment (Pankaj, 2012).

Thee macro-economic liberalization conditions also have favoured the globalization of the organization by means of free trade agreements between nations and the emergence of South Asia as a manufacturing hub. This is an opportunity for the organizations as well in improving their bottom lines provided they move to other territories in a planned manner (Stanley, 2013). The organization will have to take a wise call in deciding which functions they would like to outsource and which would be the ones that they would like to keep it within their domestic nation. It is a mistake that is often committed by many companies that they tend to outsource all the major functions to the country that they are shifting even when it is making no economic sense. It is a call that the management will have to take to identify the systems and processes that they would like to have in the foreign country while retaining the core ones on the country of their origin (Joshi, 2009). Another challenge for the organizations is that they will have to adapt to the culture and the systems of the foreign country without any doubt and they will have to be quick at it. The people and the work culture will also be different when they would be moving into a new country. The senior management will have to ensure that they involve the HR function to be a part of the core decision making process as it is they who will have to identify the talent that they would be using in the foreign soil and chalk out the plans for their operations in the land (Fox et al, 2009) .

Some of the reasons why companies should look outside their domestic markets is because there is a huge potential for them in other markets outside that is growing at a fast pace (Wendell, 2009). Moreover the domestic market is more likely to saturate in the long term and it is up to the management to find out those areas that they would do business when the domestic market saturates. It is a safe bet for the organizations to identify those markets that are similar to the domestic ones in terms of the culture so that a drastic change would not be warranted while moving into that space (Stephen & Law, 2010). Another major benefit that the organizations will have is that they will get to evolve with ideas of people from different countries rather than being stubborn with their own set principles (Hirst & Grahame, 2009). This mix of people from different countries would help the organization to evolve in terms of systems and processes and the organizations more or less benefit from the same as they would try to mix and match the existing practices with the best practices that are followed in the country (Robert, 2013). This would also force them to take a look at the new product lines that would complement the existing business as we see that most of these countries will have a different demographic make-up and different demands (Jonathan, 2011). By catering to these new sets of demands of the customers, the organization itself would evolve to become a bigger and better force to reckon with. The advancement in the technology and the infrastructural development has ensured that the costs that the organizations will have to incur in moving to a different market are minimized as compared to a decade back (Keohane & Joseph, 2010).

In order to meet the rising customer demand and to avoid the stagnation in growth most of the organizations are looking to expand their business to other countries. This has many advantages as discussed but also comes with an equal risk of making an entry into an unknown market. Companies will have to have a long term plan and a clear strategy and Business Ethics while making their entry into the international market; they will have to be open to new ideas of growth and will have to be quick to implement the same so as to emerge victorious in these markets. Spreading the risks across various markets is the best way to hedge the dynamics of the business that we see today (Stanley, 2013). Moreover the organizations ultimately benefit by improving their processes and systems by making changes that would suit them. One of the most important things that the organizations will have to do is to select the markets carefully and get the right set of people on board. They should also be cautious while deciding on the functions that they would like to take it abroad and the ones that they would like to be operated out of the domestic market. Globalization is a phenomenon that the companies cannot ignore and it is imperative that they get this clear in their growth plans that they will have to find out new markets and make use of the technologies and processes that are available elsewhere to take to their advantage.


Parker, J. 2009, Burgeoning bourgeoisie, A special report on the new middle classes in emerging markets, The Economist.

Joshi, R. M. 2009, International Business, Oxford University Press.

Keohane, Robert O., and Joseph S. Nye. 2010, “Globalization: What’s New? What’s Not? (And So What?).” Power and Interdependence: World Politics in Transition. 3rd ed. New York: Longman, pg 104-19.

Berry, Wendell. 2009, “Agricultural Solutions to Agricultural Problems.” Bringing It to the Table: On Farming and Food. Berkeley: Counterpoint, pg 30-36.

Ghemawat, Pankaj. 2012, “Why the World Isn’t Flat.” Foreign Policy (2007): 54-60.Mcgraw Hill