The three major drivers of globalization are market, technology, and government. Market drivers have Impacted large multinational organization Like Apple and Microsoft In a positive way by providing consumers worldwide with Its products and services through technology and innovation.
With market drivers universally available to so many regions of the world, consumers are able to purchase various products from major corporations via Internet or in person, all thanks to globalization. Today’s information technology drivers are superior compared to the past. For example, individuals can resource, request, analysis, order materials, parts, products, and services with Just one click of the mouse from the Internet on a computer from half way around the world and have that material, part, product, or service delivered to their place of business in a timely manner.
Telecommunications technology is superior as well, individuals can conduct teleconferences and video teleconferences around the world with real feed at the actual times of meetings to satisfy clients equines needs versus waiting on the old mail system for potential contracts. If It was not for today’s technological advances, globalization would not be thriving In so many developing countries nor would so many different products be available to consumers.
Government drivers have and will continue to affect Macs like Apple and Microsoft through individual government’s trade policies, technical standards and regulations of merchandise and regulations such as child labor laws. For example, several international companies have been found guilty of charges for utilizing child labor In their manufacturing process. To better Illustrate this concept, companies like Apple often outsource their labor and assembly practices to developing and third world countries that have become members of the world Trade organization (WTFO) and the General Agreement on Trade and Tariffs (GAIT).
According to Modular (2006), “Government agencies and Macs in these regions use international bond markets to issue bonds when they believe they can reduce their financing costs. ” (p. 75). For this, there are ethical standards and codes of conduct that are mandated and applied In countries Like The United States that should be applied abroad In hose developing and third world countries to reanalyze such work place abuses. In today’s globalize economy, there are risks associated with global investing.
By analyzing the three drivers, it is easier to explain the risks of investing globally. A marketing driver can prove to be devastating if there is a sudden decrease in the interest rates triggered by the central bank in a foreign country. According to “The Money Alert (n. D. ), “China’s experiment with capitalism means more and more opportunity for U. S. Investors who wish to tap Into an ever-growing and potentially rice instability in Egypt, it can cause a country like Libya to have instabilities on its price of fuel.
Additionally, the political climates of these two countries have continued to have an adverse policy related to foreign investments at the present moment. An additional risk can be caused due too regional crisis and instability of resulting into foreign exchange rate fluctuations to head south. With regards to technology, governments around the world have the ability to control the access to the Internet as well as to cut off outsiders such as the media and investment firms at the flip off switch during a time of internal crisis.
The impact of globalization can be better understood when the importance of cultural sensitivity and ethics in global finance is addressed. Cultural sensitivity is important in global finance. When investing globally, it becomes necessary to negotiate, communicate, and contract with people in foreign countries. This creates a need for cultural sensitivity. The global finance company must use the right etiquette and in several cases speak in the local language.
Cultural sensitivity helps forge closer and more prosperous relationships and at the same time enables the spread of global finance. For example, the standard language of international business is English. For global business ventures, it is recommended that the organization has a representative on the team that speaks the language in order to understand the dialogue between parties. Plus it is always advantageous to know the language in the country which a company wants to conduct business, this way nothing is misunderstood in translation.
Opposite sexes can play a vital role in global business practices. For example, most Muslim nations have males conducting all business transactions and often feel insecure or even intimidated by women in the workplace. Therefore, women are rarely seen as business owners or partners. Of course this is a westerner’s perspective from observations while serving in country. It mainly depends on the company’s local cultural practices and beliefs. Ethics in global finance means that the firms should follow sound finance policies and scrupulously adhere to these.
Over-lending or lending without adequate collateral should not be done. There may be excellent investment opportunities, but unless these pass all the tests laid down by the company, the investment should not take place. From the deontological ethical perspective, it is the duty of the managers of a global finance firm to protect the interest of the shareholders of the firm. On a different level, a global finance firm should not practice discrimination or victimizing some foreign firm because of certain violations.
For this, usually the governing parties make these decisions and take the appropriate actions when necessary. As long as companies are practicing the same ethical financial standards abroad as they do at home, there should not be too many issues regarding wage and fair labor laws. In conclusion, there are many drivers that have made globalization successful to date each with its own pros and cons. Each organization’s strategic management team should analyze each driver.
This would enable them to see which driver affects the organization financially. Once that is recognized, management can make the appropriate decisions to overcome the potential risks of investing globally. There are also many risks associated with global investing that must be properly analyzed by management teams to ensure the proper courses of action are taken and a contingency plan is made available in the ND educate oneself on cultural sensitivity and ethics in global finance.
That way, all entities and parties involved can flourish and prosper in due time and progress. The commonly stated goal of a firm is to maximize its value and thereby maximize shareholder wealth, which is possibly with a well thought out global business plan. References Modular, J. (2006). International Financial Management (8th deed. ). Retrieved from The University of Phoenix eBook Collection database. The Money Alert. (n. D. ). Retrieved from http://www. Demonstrated. Com/Counterbalancing. HTML
