Trends and Issues in International Planning for Businesses: Effects of Globalization

Trends and Issues in International Planning for Businesses: Effects of Globalization

Edwin Agwu (Lagos Business School, Pan-Atlantic University, Nigeria)
Copyright: © 2020 |Pages: 16
DOI: 10.4018/978-1-7998-2547-0.ch001

Abstract

Revolutionary changes in technological advancements have culminated in a hyper integration as well as stiff competitions in various facets of human endeavours. Technology has amalgamated a wide, disconnected, and diverse world with a massive land mass and water into a mere village. The space created is now bigger than the lands, seas, and oceans put together – it is called the cyber space. Trade, a hitherto localized form of exchange of goods and services, and a source of livelihood for human existence, has also metamorphosed into high levels of stiff competitions which have driven business managers to look beyond their domestic local markets for new opportunities even beyond their shores. Communities, on which trade and technologies thrive, have also had their own share of changes in all facets brought about by technological changes. Ages-long cultural practices are now giving way to changes never experienced before. While some cultures have incorporated these changes, others have been swallowed up and therefore gone into extinction.
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Introduction

Globalization is often regarded as the opening of international borders to flows of trade, foreign direct investments, immigrations, information and technology. Acosta and Gonzalez (2010) however viewed globalization as the rapid rise and ease of movement of humans, products and capital through many international boundaries. The term globalization was derived a Greek work ‘’Globe’’ which literarily means worldwide. According to Vivarelli, (2004), the concept of globalization is used to reflect the integration of national economies through trade, foreign direct investment, capital outflow, and migration. Dicken, (2007) stressed that the high rate of interdependence and inter-linkages among nations of the world occasioned by high speed economic, social, political, technological and cultural interactions can be used to describe globalization. To this end, globalization can be considered as a very complex as well as a multifaceted phenomenon, and these encompass, political globalization, economic globalization, technological globalization and socio-cultural globalization. Globalization aimed to eliminate racial, ethnic, gender and all other forms of discrimination as well creating a “global free market” by removing all boundaries through accelerated relocation and reorganization of the production process (Acker, 2004). Globalization is an age long phenomenon of which traces are visible in virtually every facet of human endeavour for example, as noted by Hill, (2009), many international companies such as Xerox, Motorola, Honda, and Samsung, carry out their productions and marketing mainly outside their country of origin. Thus, customers find it difficult to distinguish between French, Japanese, or even American companies. The processes of commencement, means, and dimension however vary, for instance, economic globalization dates back to early 1800s. Santarelli and Figini (2004) assert that the Cold War was fundamental to the emergence of what is today’s modern globalization. Historically, three main eras of globalization have been experienced; firstly, the ‘’Known World‟ globalization of the Roman Empire, secondly, the 15th and 16th century globalization championed by the Europeans, and lastly, the post-World war II globalization (Joyce, 2003). Three stages of economic globalization have similarly been witnessed; the first period (1800-1940), the second period (1940- 1970), and the third period (1970 to date) (Zarsky, 1997). The first period marked the commencement of economic globalization and was characterized by international capital flows championed by Britain through its foreign direct investment and portfolio investments. Telegraphic communication, as well as rail and ship transportations were used to facilitate the global economic integration. The second period according to Vivarelli, (2004) was a product of the Bretton Woods Conference of 1944 which gave birth to International Monetary Fund (IMF), the World Bank and the General Agreement on Tariffs and Trade (GATT).

Economic integration in this period was facilitated by increased transportation and communication technology and was characterized by reduction in trade barriers and increased multinational investments. The third period witnessed the offshoot of industrial giants of East Asia (Japan, Malaysia, China, etc.); globalization at this stage is facilitated by high transport technology and information technology leading to rapid movement of goods, people and ideas across the globe, (Robert and Murray 2001). The current stage poses great challenges to many nations particularly those at the lower level of the ladder in terms of development as they struggle to catch up with the speed of developmental requirements of globalization, (Agwu, 2014). Communities in which these organizations thrive also have a good share of the globalization cake and its cultural wagons are now at a cross- road.

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