Globalization and its Impact on Today's International Business Essay

Globalization and its Impact on Today's International Business - Essay Example It describes that world economy is taking a more global shape and discusses the main drivers of globalization by arguing that the drivers are playing a key role to set up a more firmly integrated global financial system. A substantial preference is given to two factors to underlie the implications of globalization i.e. declining barriers to the international businesses and the continuous changes in communication, information processing, and transportation modes. It also analyzes that how the international businesses are reacting to the changing environment of global economy. The paper puts some light on the concerns highlighted by rapid globalization along with its implications to particular countries as well as a short history of globalization and the growth of international marketing by multinational companies. The roles of these companies and government policies have been critically analyzed to figure out the benefits and gray areas of globalization. Further through the critical a nalysis, an endeavor has been made to discuss the famous questions like what the benefits of globalization are, and what are its threats, both real and perceived? What do the terms international business, international transaction, and international trade mean? What are the differences between international business and domestic business? At the end, the paper gives a brief overview about the future scenario of world business environment. Globalization Over the past thirty years or so, a universal shift has been occurring in the world economy. There was a time when national economies were isolated from one another and relatively self contained. The rationale of isolation included barriers to cross-border trade and investment, i.e. due to distance, time zone, environment and cultures, natural differences in languages and political regulations, and the business systems. Today, the world has been observing a totally different scenario because geographical distances are reducing due to tremendous development in telecommunications and transportation technologies. Beside this, the global environment and culture have turned into almost same fashion while national economies are merging into an integrated as well as independent global economic system. All these changes and developments have decreased the barriers to cross-border trade and investments. The process of these changes in global economy is generally known as globalization (Panic, 2003). Impact on International Business: A General Overview Impact of globalization can be observed at a global scale in numbers of different fields including economic, social, political, cultural, and technological aspects of life. It has affected the human life in different angles of their individual and collective norms. In the cultural context, globalization has impacts on thoughts, theories, idealism, consumer behavior, and practices of human race (Grossman & Krueger, 1995). In the perspective of international business, its imp acts range from manufacturing, production, promotion, consumption, commercial exchange, and distribution. One of the major impacts of globalization on international business is that it forced the world to establish certain institutions