International business project On Globalization

Submitted by: shikha gupta

Introduction
The ongoing globalization increases the overall need for knowledge of cultural differences between not only countries but also corporate cultures . More and more employers start transferring their experts from country to country to help build new subsidiaries or to support existing ones in certain projects. Their success is closely linked to not only the obvious need for language skills but also the understanding of sub cultural influences, different communication styles and social behaviors of each society. But in many companies these challenges have not been addressed yet. In a lot of cases experts/employees are transferred to foreign subsidiaries with almost no cultural training based on the erroneous assumption that the subsidiary cannot be too different from the home countries and its headquarters culture. Globalization is happening and it is happening very fast due to the improvement of technology, the faster communication as well as the fast travel possibilities via cars, ships and aircrafts. The actual status of globalization can be described by three major changes- first in job markets Also the internet business seem to have a major effect on competition and market developments as the actual location of a company does not really matter anymore. Looking at the increased international travel and moving activities it seems that traditional cultures move more and more into the background. People adapt to world habits. Looking around in our societies the entertainment industry seems to conglomerate to an international mix of music and movies which is available everywhere, international food choices are available in almost every town or city. Also most of the larger cities have multilingual habitants and a variety of different religions. Furthermore we see developments of subcultures within countries or even cities. Subcultures meaning that there are places in a country or a city which keep holding on to their original culture and get not touched by the change of their environment.

History of globalization

The Islamic Golden Age was also an important early stage of globalization, when Muslim traders and explorers established a sustained economy across the Old World resulting in a globalization of crops, trade, knowledge and technology. Globally significant crops such as sugar and cotton became widely cultivated across the Muslim world in this period, while the necessity of learning Arabic and completing the Hajj created a cosmopolitan culture.

The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East and China, greatly facilitated travel along the Silk Road. This permitted travelers and missionaries such as Marco Polo to journey successfully (and profitably) from one end of Eurasia to the other. The so-called Pax Mongolica of the twelfth century had several other notable globalizing effects. It witnessed the creation of the first international postal service, as well as the rapid transmission of epidemic diseases such as bubonic plague across the newly-unified regions of Central Asia. [2] These pre-modern phases of global or hemispheric exchange are sometimes known as archaic globalization. he sixteenth century represented a qualitative change in the patterns of globalization because it was the first period in which the New World began to engage in substantial cultural, material and biologic exchange with Africa and Eurasia. This phase is sometimes known as protoglobalization. In the 17th century, globalization became a business phenomenon when the British East India Company (founded in 1600), which is often described as the first multinational corporation, was established, as well as the Dutch East India Company The 19th century witnessed the advent of globalization in something approaching its modern form. Industrialization permitted the cheap production of household items using economies of scale, while rapid population growth created sustained demand for commodities and

manufactures. Globalization in this period was decisively shaped by nineteenth-century imperialism. After the Opium Wars and the completion of the British conquest of India, the vast populations of these regions became ready consumers of European exports. Globalization in the middle decades of the twentieth century was largely driven by the global expansion of multinational corporations based in the United States and the worldwide export of American culture through the new media of film, television and recorded music.

Definitions
Globalization is the system of interaction among the countries of the world in order to develop the global economy. Globalization refers to the integration of economics and societies all over the world. Globalization involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure.

Effects of Globalization
According to economists, there are a lot of global events connected with globalization and integration. It is easy to identify the changes brought by globalization. 1. Improvement of International Trade. Because of globalization, the number of countries where products can be sold or purchased has increased dramatically. 2. Technological Progress. Because of the need to compete and be competitive globally, governments have upgraded their level of technology. 3. Increasing Influence of Multinational Companies. A company that has subsidiaries in various countries is called a multinational. Often, the head office is found in the country where the company was established. An example is a car company whose head office is based in Japan. This company has branches in different countries. While the head office controls the subsidiaries, the subsidiaries decide on production. The subsidiaries are tasked to increase the production and profits. They are able to do it because they have already penetrated the local markets. The rise of multinational corporations began after World War II. Large companies refer to the countries where their subsidiaries reside as host countries. Globalization has a lot to do with the rise of multinational corporations.

4. Power of the WTO, IMF, and WB. According to experts, another effect of globalization is the strengthening power and influence of international institutions such as the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (WB). 5. Greater Mobility of Human Resources across Countries. Globalization allows countries to source their manpower in countries with cheap labor. For instance, the manpower shortages in Taiwan, South Korea, and Malaysia provide opportunities for labor exporting countries such as the Philippines to bring their human resources to those countries for employment 6. Greater Outsourcing of Business Processes to Other Countries. China, India, and the Philippines are tremendously benefiting from this trend of global business outsourcing. Global companies in the US and Europe take advantage of the cheaper labor and highly-skilled workers that countries like India and the Philippines can offer 7. Civil Society. An important trend in globalization is the increasing influence and broadening scope of the global civil society. Civil society often refers to NGOs (nongovernment organizations). There are institutions in a country that are established and run by citizens. The family, being an institution, is part of the society. In globalization, global civil society refers to organizations that advocate certain issue or cause. There are NGOs that support women's rights and there are those that promote environment preservation. These organizations don't work to counter government policies, but rather to establish policies that are beneficial to all. Both the government and NGOs have the same goal of serving the people. The spread of globalization led to greater influence of NGOs especially in areas of great concern like human rights, the environment, children, and workers. Together with the growing influence of NGOs is the increasing power of multinational corporations. If the trend continues, globalization will pave the way for the realization of the full potential of these two important global actors.

Disadvantages
First of all, it has been asserted that globalization provides the increasing of productivity and life standard of societies. To begin with productivity is indeed increased as it can be seen that the population of the world is rising rapidly even uncontrollable and more people means that there is a need of more product too. Thus Globalization responds the needs of 7 billion people. Moreover the standards of life is a lot better than 50 years ago as they are more machines and systems invented in developed countries supporting all world. However there is another side of the facts. Globalization causes the poor citizens having more requirements. Secondly cultural intermingling is enlarging with globalization which lets the people from all over the world able to communicate easier. On the other hand sharing traditional behaviours cause them fading as boundaries are disappearing. The most important disadvantage of globalization is the increasing number of the loafer. After the industrial revolution, industry gravitated some particular countries. Because of that, these countries became a power in industry. However production decreased and so unemployment was raised in the other countries. Another reason of the unemployment rise is that the need of less manpower. As stated at Wikipedia, many workers found themselves suddenly unemployed, as could no longer compete with machines which only required relatively limited work to produce more product than a single worker. Another major damage of globalization is that some cultures are getting lost. The cultures of the countries that have more economic power are more dominant than others. Because, wealthy countries produce many things that can affect cultures, for example, clothes, movies and technologic products. According to Ikerd, while the global community is increasing, more and more people have became ignorant about social, ethical and moral values which are various in defining groups. (2002) Therefore, globalization damages small cultures which are in risk of being extinct. Big disadvantages. The final significant effect of globalization is the difficulty of competition. With globalization, trade between the countries has been started to remove limits.

This situation of enterprises has prepared the ground to be in constant competition with not only national competitors but also international competitors. Therefore, business requires being in a more rigorous and challenging competitive atmosphere to maintain continuity and development. Rising of monopole companies and trough among production costs are the main effects of this hard competition in business. As pointed in Global Policy Forum, undeveloped countries choose to use foreign capital for their improvement however it disposes the equality and stability instead. 1. Intense Competition 2. Widening of Gap between rich and poor countries 3. Harder for Smaller businesses to establish themselves 4. Exploitation of workers: Paying the workers in LEDC's a fraction of what would be paid in to workers in LEDCs. 5. Income generated in Host country is not always spent in the same country money earned from supplying cheap call centres in india will not be spent in india but maybe in Uk or US.

Difference between localization and globalization

Globalization is the process of making a product multi-lingual. All languagerelated aspects of the program are separated from the code, and all aspects, which vary with target country, are handled in a country-independent way. Localization is the process of adapting a global product for a particular language and country. Localization includes translations and other conversion, and takes into account local practices and culture, providing a product, which is comfortable to use in the target country. Translation is involved in most aspects of localization. Accuracy and appropriateness of translation are key to overall product quality. Retrofitting is an informal term for localization of a product, which was not designed to be global. It is the first step taken by most companies entering the global marketplace