Business Topics for Research Paper: Globalization

In partial fulfillment of

BAM 008 – Principles of Management

Submitted by:

Monica Yulo

Myra Aldamar

Therese Arquisola

Leonie Tacaisan

Novel Jean Sencil

Melissa Favila

Ralph Kenneth Marbibi

Jasmine Cruz

Submitted to:

Ms. Ruthelyn E. Munieza

Instructor

October 18, 2018

Introduction

Globalization is the process of interaction and integration between people, companies,

and governments worldwide. Globalization has grown due to advances in transportation and
communication technology. With increased global interactions comes the growth of
international trade, ideas, and culture. Globalization is primarily an economic process of
interaction and integration that's associated with social and cultural aspects. However, conflicts
and diplomacy are also large parts of the history of globalization, and modern globalization.

Globalization is the free movement of goods, services and people across the world in a
seamless and integrated manner. Globalization can be thought of to be the result of the opening
up of the global economy and the concomitant increase in trade between nations. In other
words, when countries that were hitherto closed to trade and foreign investment open up their
economies and go global, the result is an increasing interconnectedness and integration of the
economies of the world.

Further, globalization can also mean that countries liberalize their import protocols and
welcome foreign investment into sectors that are the mainstays of its economy. What this
means is that countries become magnets for attracting global capital by opening up their
economies to multinational corporations.

Researcher: Monica Yulo

Reference: https://en.wikipedia.org/wiki/Globalization

https://www.managementstudyguide.com/what-is-globalization.htm

Factors companies should consider when deciding the market and country of which they would
like to come

Many factors should be considered when companies decide to develop globally. Within
the last century it has become normal to see some of the same companies that we deal with in
one country those years before you would never see. As businesses decide to take that leap it
takes a lot of considerations before they can be well established. A business plan needs to be
implemented after the market has been researched and they know what the target audience is
looking for.
The factors that companies should consider are as follows:

1. Availability of raw materials

If you intend running a manufacturing or production business, then the nearness
or availability of raw materials is a factor you must not joke with when choosing your
business location. If your business is not sited close to these raw materials, then sourcing
and transportation will reduce your profit margin.

2. Nearness to market

The next important factor to consider is the nearness of your business to its
customers. Are your customers’ resellers or end users? Answering this question will help
you determine the best area to locate your business. Remember that for your business to
succeed, you must make it easy for customers to find your product.

3. Availability of basic infrastructure

Availability of basic infrastructure can affect your choice of small business

location. Amenities and infrastructure such as water supply, power supply, good road
network and security are things to consider when locating your business.

4. Economic policy

The economic policy or system of a particular region may also affect your decision
and choice of location. Some economy favor capitalists and others are driven by
socialism; where the government controls all businesses. Other sub-factors to consider
are government’s policy, fiscal and monetary policy, exchange rates, taxes, levies and
duties.

5. Demographics

Demographics as a factor can have a big influence on your choice of business

location. The type of product or service your business offers and the status of the
customers will play a vital in your choice of small business location. I will share an
example:

Suppose you are into the business of selling stationeries. That means your
demographics should be made up of students, so your best bet of location should be
within school vicinity.
6. Psychographics

The mindset of your customers or the aura of a particular region is also a factor to
consider when choosing a location for your small business. For example; if you site your
business in a region where tribalism thrives, then you are doomed if you are not a
member of the tribe.

Another example is this; if you are in the pornographic industry, you will be
making a grievous mistake to site your business within a region where the inhabitants are
highly religious.

7. Industrial Clusters / areas

Some entrepreneurs may decide to site their business in industrial areas or

clusters due to the infrastructure and amenities already on ground. Industrial areas are
areas mapped out specifically for commercial purposes especially manufacturing firms.

These areas are sometimes given special attention such as good road network,
constant power supply, etc. In some certain regions, heavy duty manufacturers are
forced by the government to site their companies in these industrial areas.

8. Export processing zones

Locating your business in an export processing zone may be a smart choice for
you especially if are an exporter. Locating your business in such regions means a
reduction in transportation cost, faster inspection and clearance of your products by
custom officials and so on

9. Free trade zones

International free trade zones and trade fair centers are also good places to site
your business because it is accessible and normally receives wide publicity.

10. Distributive channel

If your business don’t deal directly with end users or final consumers, then it’s
wise to put your distributive channel into consideration when choosing a location for
your small business. The more you make it easier for your distributors to access your
products, the better for your business.
Researcher: Myra Aldamar

References:

https://www.profitableventure.com/choosing-a-business-location/

How consumer behavior changed since the beginning of globalization

One of the results of this changing dynamic is that the consumers are becoming exposed
to the products, lifestyles and behavior patterns of consumers in other countries. There are
some reasons, for example that barriers come down and consumers and goods move freely
across national boundaries. Firms gradually alter traditional patterns of behavior, by introducing
new products, services and ideas into the global market place. As a result countries or cultures
can no longer be viewed in isolation as a set of separate entities, characterized by their own
distinctive value-systems, traits and customs.

Globalization is a leading concept which has become the main factor in business life
during the last few decades. This phenomenon affects the economy, business life, society and
environment in different ways, and almost all corporations have been affected by these changes.
These changes are mostly related to increasing competition and the rapid changes of technology
and information transfer. To challenge these changes, companies need to keep in mind various
aspects of the main effects of globalization.

Competition

Globalization leads to increased competition. This competition can be related to product

and service cost and price, target market, technological adaptation, quick response, quick
production by companies etc. When a company produces with less cost and sells cheaper, it is
able to increase its market share.

Customers have a large multitude of choices in the market and this affects their
behaviors: they want to acquire goods and services quickly and in a more efficient way than
before. They also expect high quality and low prices. All these expectations need a response
from the company, otherwise sales of company will decrease and they will lose profit and market
share. A company must always be ready for price, product and service and customer preferences
because all of these are global market requirements.

Exchange of Technology

One of the most striking manifestations of globalization is the use of new technologies by
entrepreneurial and internationally oriented firms to exploit new business opportunities.
Internet and e-commerce procedures hold particular potential for SMEs seeking to broaden their
involvement into new international markets.

Technology is also one of the main tools of competition and the quality of goods and
services. On the other hand it necessitates quite a lot of cost for the company. The company has
to use the latest technology for increasing their sales and product quality. Globalization has
increased the speed of technology transfer and technological improvement. Customer
expectations are directing markets. Mostly companies in capital intensive markets are at risk and
that is why they need quick/rapid adapting concerning the customer/market expectations. These
companies have to have efficient technology management and efficient R&D management.

Knowledge/Information transfer

Information is a most expensive and valuable production factor in the current

environment. Information can be easily transferred and exchanged from one country to another.
If a company has a chance to use knowledge and information then it means that it can adapt to
this global changing. This issue is similar with the technology transfer issue in global markets. The
rapid changing of the market requires also quick transfer of knowledge and efficient using of that
knowledge and information.

Researcher: Therese Arquisola

References:

https://bookboon.com/blog/2011/10/how-globalization-affects-business/

https://www.bartleby.com/essay/Globalization-and-Its-Effect-on-Consumer-Behavior-
F3XR6ZEK6ZZA

How Chinese Market Benefit From Globalization

Globalization carry chance and profit with it, but it depends on the nation how they are
taking it. The advantages of globalization have been taken by much country like china. They
accept domestic strategy which permit their civilian to get promote global market which helps in
increasing their GDP.

As there are two face of coin, globalization cans also effects in two ways. Either it’s
positive or negative. Globalization has made many positive impact of china.
 They are as follows:

1. Economic growth
As per the statistics if 2003 china made nearly 1413 US Billion dollars which stand
it in sixth position. During 1965 to 1979 the GDP of china grew with 6.4% but after
entering into global market china made its GDP nearly 10% in 1980 to 1990. In 2005
its stated that the industrial production in China is increased by 15% while consumer
demand is increased by 10%.

2. Economic Development
As per the index shown by human development china ranked 94th and according
to the china’s current scenario only the 16.6% of population is in poverty. This is
continuously decreasing in last 23 years.

3. Increase in Savings
560 Billion US dollar was the saving deposit of the civilians in china in 1997 which
is around 218 times more than that in 1978. This is a 32% increase in this particular
gap of year. Apart from this currency saving, stocks and debentures and the financial
asset in also increases by us dollar 725 billion.

4. Improve in Tourism, Export and Import

In 2003 when china takes the membership of two this made china a more
attractive country. People from all over the world come to visit china. Many big
entrepreneurs come here to invest in china. In 2003 export in increases around
32.3%and import is 40.5% and tourism industry also increases by9.7%.

5. Improve in Life Style and Increasing Employment Opportunity

The best effect of globalization for the developing country like china is improving
in the life style. The living standards of all community in that country drastically
improved. The employment opportunity for public in developing country is also
increases by the effect of globalization.

Despite of positive effect of their globalization there is some negative effect too. They are
as follows:

1. Develop country outsource their business to developing country. Because of the low
manufacturing cost and cheap labor available. So the persons in developed country
loss their job due to this out sourcing.
 2. Due to this globalization there is insecurity in jobs. Now the jobs are not permanent.
There is a competition in works which results to the decrease in wages due to the
fear of job losing people start working in low wages.

3. There is a poor check in pollution. By establishing a plant or an industry there is an

increase in the pollution in that particular area which effects the environment. And in
today’s scenario, plants and industries are playing an important role in global
warming.

4. Due to the effect of globalization small scale industry or medium sized industry has
been taken by the large scale industries. There is a less scope of cottage and small
scale industry in the world of globalization.

5. Multinational companies which are previously not allowed to intervene in politics

now poke their nose in political judgments.

Researcher: Leonie Tacaisan

References:

https://www.ukessays.com/essays/economics/positive-and-negative-effect-of-globalization-on-
china-economics-essay.php

http://www.buzzle.com/articles/negative-effects-of-globalization.html

Does the process of globalization still prosper, or will it inevitably see a decrease?

Globalization is the process of international integration arising from the interchange of

world views, products, ideas, and other aspects of culture. Advances in transportation and
telecommunications infrastructure, including the rise of the telegraph and its posterity the
Internet, are major factors in globalization, generating further interdependence of economic and
cultural activities.

The term "globalization" has acquired considerable emotive force. Some view it as a
process that is beneficial—a key to future world economic development—and also inevitable
and irreversible. Others regard it with hostility, even fear, believing that it increases inequality
within and between nations, threatens employment and living standards and thwarts social
progress.
 Globalization offers extensive opportunities for truly worldwide development but it is not
progressing evenly. Some countries are becoming integrated into the global economy more
quickly than others. Countries that have been able to integrate are seeing faster growth and
reduced poverty. Outward-oriented policies brought dynamism and greater prosperity to much
of East Asia, transforming it from one of the poorest areas of the world 40 years ago. And as
living standards rose, it became possible to make progress on democracy and economic issues
such as the environment and work standards.

Researcher: Novel Jean Sencil

References:

https://www.researchgate.net/post/What_do_you_think_about_globalisation_Can_we_avoid_it
_Is_it_a_good_thing_Where_does_it_lead

https://www.imf.org/external/np/exr/ib/2000/041200to.htm

How Business Clusters Move Globalization

Clusters are geographic concentrations of interconnected companies and institutions in a

particular field. Clusters encompass an array of linked industries and other entities important to
competition. They include, for example, suppliers of specialized inputs such as components,
machinery, and services, and providers of specialized infrastructure. Clusters also often extend
downstream to channels and customers and laterally to manufacturers of complementary
products and to companies in industries related by skills, technologies, or common inputs.
Finally, many clusters include governmental and other institutions—such as universities,
standards-setting agencies, think tanks, vocational training providers, and trade associations—
that provide specialized training, education, information, research, and technical support.

Economic cluster theory has been used to describe the growth of many industries,
including the automotive business around Detroit, high tech in Silicon Valley, and digital media in
Seoul. These regions benefit by a concentration of complementary resources that might include
leading research universities, low cost or highly trained labor, and geographic bounty.
Understanding how clusters work can help governments develop effective policies for creating
them, as well as direct entrepreneurs to the best locations to build their businesses.

Economic clusters have had a much wider impact on world economics than generally
recognized. The cluster concept is often used to consider local factors but there’s a growing
awareness that many clusters are also driven by external forces, such as foreign direct
investment and multinational corporations, which results in a connection that occurs through
knowledge exchange on the local level or across wider cluster networks. In that sense, clusters
become platforms for development, which has present-day implications for corporations,
governments, and individual actors, especially in emerging economies.

Researcher: Melissa Favila

References:

https://hbr.org/1998/11/clusters-and-the-new-economics-of-competition

https://www.forbes.com/sites/hbsworkingknowledge/2017/10/18/how-economic-clusters-
drive-globalization/#929c5a734368

Reporters: Ralph Kenneth Marbibi

Jasmine Cruz