Globalisation contributes to a substantial degree of convergence in both business practice and markets. The research delves on describing globalisation. The study investigates on the effects of the globalisation factors on the stakeholders.
Implementing effective marketing strategies in the globalization environment reduces risk management issues.
Globalisation Convergence Business Market Risk
Globalisation Reduces Revenue Risks
Globalisation has levelled the playing field in terms of generating revenues. Globalisation ushered the unavoidable priority to comply with market forces when compared with meeting with the local government’s economic prerogatives (Barrera, 2008). The ethics of the global economy forces local governments to bend to the intense pressures of the global environment to come to terms with the worldwide marketplace economic agreements (Ervin, 2008). Similarly , a company headquartered in the United States may sell similar products to current and future customers located in Japan, Korea or Singapore, without fear of the globalization business climate change (Greenwald, 2008). Besides, a company that is located in Argentina can send its products to current and future clients located in the United Kingdom (Homann, 2007). The above discussion clearly shows that the risk of not finding current and prospective customers for the company’s products is reduced. The opening up of the global market to a business based in every part of the world decreases the risk of not producing the company’s necessary revenues.
Globalisation Reduces Expense Risks
Globalisation has leveled the playing field in terms of generating expenses. Trevor Nagel opines that globalization has prompted the companies to seek raw materials from suppliers located in other countries, especially when the local United Kingdom suppliers’ products are inferior to the importing suppliers’ competitive raw material choices. Consequently, globalisation forces all departments within the United Kingdom companies to prioritise quality over protecting the local United Kingdom raw material or supplier industries (Nagel, 2007).
The different departments of the toothpaste production entity in France must coordinate efforts to buy its raw materials from its current and future suppliers located in the Netherlands. Besides, the hammer manufacturing company located in Poland can purchase its quality manufacturing raw materials from a supplier situated in Sweden (Bella, 2009). An apparel making company that is set up in Peru can buy its clothing raw materials from preferred current and future suppliers located in Dubai (Marmolejo, 2012). The above discussion offers convincing proof that globalisation drops the related risks of not finding current and prospective suppliers for the company’s raw materials. Shifting from working exclusively with current and future suppliers in the local region to a wider global list of current and future suppliers decreases the company’s chance of not having one available raw materials.
Globalisation Reduces Profit Risks
Globalisation has leveled the playing field in terms of generating profits. Research shows that many countries have benefited from the global business environment. Some of the countries that benefited from globalisation include East Asian nations, India, and China. Later, some African countries joined the globalisation bandwagon. The multinational business industry segment creates related positive and negative impact on the local economies of the nation (Das, Another Perspective on Globalisation, 2010). A book publishing company set up in Russia will make the most of selling its books in Vietnam’s bookstores, in line with the liberal-minded political leaders of the state’s intention to do so enter the global business stage (Blum, 2008). A food company headquartered in New Zealand can make dependent profits from exporting its products to Australia (Lane, 2008). A car manufacturing company can benefit from selling its car models in Malaysia (Ritzer, 2011). The above discussion offers soundproof that globalisation lowers the risks of not achieving the company’s expected profits. The company’s entering the global market stage will increase the company’s chances of generating benchmarked profits (Jones, 2010).
Globalization Reduces the Risk of Not Having Skilled Staff
Globalisation has leveled the playing field in terms of hiring qualified works. Many multinational companies set up their production plants in countries to save on labour costs (Hopper, 2007). The companies use the latest information technology to reduce workforce requirements (Roy, 2007). Many companies have developed their manufacturing facilities in export processing zones in China, Nigeria and other countries (Oyedijo, 2010). In turn, the United Kingdom companies and the United States companies save on workers’ salaries because the salaries paid to the local United Kingdom employees and the domestic United States employees are several times higher than the wages of employees (Erikson, 2007). The above discussion indicates that globalisation lowers the risks of finding the best employees for the vacant job. The company’s joining the global business environment increases the company’s capacity to hire any employee.
Globalisation Reduces the Risks, in Terms of Transfer of Technology
Globalisation reduces the transfer of technology risk. Globalisation includes implementing innovative changes that offer new products and services, improvements of current products and services, and taking advantage of global technology advances, including the best and brightest employees handling the transfer of technology processes (Slywotzky, 2006). An Indonesian company can easily acquire the latest food production technology from a London-based entity (Ray, 2007). The Philippine Kite making company can learn the newest kite making process from the Belgium kite making entity (Beyer, 2007). The furniture manufacturing company located in Switzerland effectively purchases the latest furniture concepts from a company stationed in Greenland (Longa, 2009). The above discussion provides unquestionable facts that business globalisation lowers the risks of not acquiring the transfer of technology. The company’s connection to the global business community opens a broader horizon to find the best technology needed to increase the global demand for the company’s products and services.
Globalisation Reduces the Risks in Terms of Communicating with Suppliers
Globalisation has leveled the playing field in terms of communicating with business suppliers. Globalisation includes FIFA’s amassing huge television and advertising profits from contacting its suppliers. The FIFA include suppliers include the players who are paid huge salaries in exchange for making the FIFA global business marketing name a profitable venture. In 2006 alone, FIFA generated $400 million net worth from its universal television rights to watch the soccer games (Altman, 2006). A Mexican company can communicate faster with a company located near the pyramids of Egypt by using one’s mobile phone or email. The above discussion theorises that globalisation lessens the risk of not communicating the company’s suppliers. The company’s membership in the global market group enhances the company’s supplier communication speed.
Globalisation Reduces Risks in Terms of Communicating with Customers
Globalisation has leveled the playing field in terms of communication with current and future business customers. The customers from Greece can inquire about the Thailand store’s current billiard table price. The customers from Switzerland can ask about the Paraguay establishment’s current motorbike models. The above discussion insists that globalisation reduces the risks of not communicating with the customer’s current and future suppliers. The customers’ searching for global suppliers of their wants, needs, and caprices increases the chances of a successful purchase agreement.
Globalisation Reduces the Risk in Terms of Generating New Products
Globalisation reduces the risk of not generating new products. The local current and future customers’ demands vary from the diversified cultural needs and wants of the current and future global customers. Consequently, the company must create new products that fill the diverse needs and wants of the customers located in countries outside the United Kingdom (Gupta, 2011). An East London company can use materials bought from Iraq to produce a new clothing line business. A West London company can buy materials from Iran to research and develop a new neck tie design. A company located near the Buckingham Palace can use materials sourced from Kuwait to sell a new London-based vehicle model. The United Kingdom companies’ easy access to global materials permits the reduction of modern production line risks (Dignam, 2009). The United Kingdom entities’ membership in the global supplier market increases the companies’ realization of its goal to launch innovative new universal products successfully.
Globalisation Reduces the Risk in Terms of Offering Better Technical Expertise
Globalisation has leveled the playing field in terms of generating better technical expertise in the business world. The company located in London can hire the professional services of a perfume production expert from Rome (Day, 2007). If the Rome individual is not available, the company can locate the second-best person for the job by contacting someone from Athens. If the second prospective expert does not accept the company’s offer, the company can search for a third possible expert from New York (DubBrin, 2009). Globalisation has reduced the risks of not finding the much-needed technical person within the required period. The London entity’s entry in the more significant global scene reduces the chances of not finding the professional expert.
Globalisation Reduces Risks in Terms of Education
Globalisation reduces the risk of education business failure. A Thailand commerce graduate can apply one’s technical expertise in Computer programming by applying for a job in California, USA (Hartline, 2011). A Guatemala nurse professional can apply for a vacant hospital job in Oman, Saudi Arabia. A licensed Civil Engineer from London can send one’s resume to a construction company located in Hawaii, United States. The Malaysian English language teacher can teach conversational and business English language to online students living in North Korea. The above discussion points to the fact that globalisation has reduced the risks of not using one’s education to find a related job in the education business. The students’ entry into the global business scenario enhances the chances of exercising one’s educational attainment to the fullest.
Globalisation Reduces Risks in Terms of Healthcare Services
Globalisation lessens the risks of health care business service failure.
The London-based hospital can source kidney donors from British Columbia. The Scotland-based hospital can locate a lung donor from Australia. The Ireland medical facility can process an eye donation from Holland. A Westminster medical Patient can receive a heart donation from nearby France. The above discussion proposes that globalisation has reduced the risks of healthcare facilities’ inability to locate individual part donations. The healthcare facilities willing participation in the global business community enlarges the healthcare facilities’ capacity to supply their healthcare business patients’ individual part donation needs.
Globalisation Reduces Risks in Terms of Cash Collections
Globalisation reduces the risks of not cash transfer. The jacket manufacturing company located in London can collect payments from a British customer using the Paypal global money transfer processing system (Buttle, 2011). The money is transferred from the customer to the store or company immediately, the moment the customer sends the Paypal payment. Another London-based book publisher can collect payments from the Sydney, Australia customer by using the Western Union global payment system. Besides, the bank wire global payment system allows Canadian customers a secure payment scheme for their London purchases (Abele, 2008). The above discussion shows vivid evidence that globalisation reduces the risks of not collecting the customers’ payments on time. The London-based companies’ membership in the global business environment ensures faster and better comprehensive customer payment collection.
Besides, globalisation reduces the risks of fiscal imbalances and severe income variances (McLennan, 2012, par 1). One county may implement protectionism policies. The protectionism policies of one country prevent the entry of imported goods (Irwin, 2011). The state wants to protect its local industries from the challenges of imported goods. With the entrance of the imported goods, the British customers can choose the lower-priced imported products of China, when compared to the higher-priced locally produced goods.
Consequently, the local industry will generate lower revenues, leading to business losses. The imported goods can force the local British companies into unwanted bankruptcy (Newton, 2009). However, the imported goods will bring much-needed British Pounds into the coffers of China (McPhail, 2009). In this global situation, there are winners, and there are losers. The winners are China and British customers. The British customers will be able to spend lesser British Pounds for the same quantity and quality of goods or services (Moyer, 2009). In turn, British customers will have more purchasing money to buy other personal needs, wants, and caprices.
To adjust to the sudden drop in sales, British companies can shift to another business type. The closed down business companies can sell new products and services. There is an old saying that change is the only activity in this world.
Consequently, the closed down British companies can shift to sell more accessible products and services. Our own British companies should not put up protectionism policies to protect the companies from the closing shop (McLennan, 2012, par 1). The British companies should not put up protectionism policies to save the British workers from losing their jobs. Instead, the retrenched British workers should find other jobs in other British companies. The above topic shows that globalisation reduces the risk of reduced local industry revenues from imported goods.
Further, another researcher emphasized that companies can quickly reduce the globalisation risk of organized labour. Companies must focus their scarce resources to avoid labour union interruptions (Gentile, 2009). The labour union interruptions include work stoppage. Labour unions often stage strikes for their perceive violations of the labour union’s collective bargaining agreement provisions. The laws of each country often include engaging in attacks to press management to comply with sections of the approved collective bargaining agreement sections. France has its share of labour union strikes and other work stoppages (Gentile, 2009). The discussion clearly shows that globalisation can reduce the risks of labour union disruptions. The companies’ entry into the global labour environment includes complying with collective bargaining agreement terms, reducing the chances of strokes and other work destabilization activities.
Further, Ray Hudson insists that globalisation includes reducing new risks to the health and well-being of the workers (Hudson, 2009). Some companies shift their hazardous wastes to other less developed or third world countries. The scraps are dumped within the third world countries’ territorial jurisdiction. In return, the third world recipients of the hazardous wastes receive payments for allowing the storage or dumping of the hazardous wastes. Consequently, the dangerous wastes wreak havoc on the health of the local communities’ residents. This is one of the ill effects or risks of globalisation (Kumar, 2009). However, globalisation does need to include prioritizing financial returns over the safety of the nation’s residents. The above discussion indicates that recipient nations can reduce risk from imported hazardous wastes by refusing to such unfair trade negotiations. The nations’ joining the global business environment should focus on ensuring the health and safety of the local communities.
Furthermore, Sasiprapa Chaiprasit insists that globalisation includes capital mobility as well as labour mobility (Chaiprasit, 2008). Globalisation includes toppling down of economic barriers between the buyer nations and the seller nations. The global environment allows the sellers access to new uncharted market segments around the world. One of the risk reduction opportunities is reducing sales decline because there are more current and future customers to sell the company’s products and services, taking into consideration the corresponding competitors in the global market segment. The global business entity must include these factors in the preparation and implementation of its comprehensive marketing strategy.
Also, Dilip Das insists that globalisation includes macroeconomic factors. The macroeconomic factors include currency exchange rate fluctuation between two countries’ currency (Gottfiend, 2011). Another macroeconomic factor consists of the importation duty or tax paid for importing goods into the customers’ country (Das, 2010). The integration of the global business community contributes to the gross domestic product growth of an exporting country (Johnson, 2010). On the other hand, one of the risks of globalisation shows that imports may compete with the local industry’s goods and services (Idiart, 2011). Economists affirm that globalisation enhances global economies and global welfare, favourably influencing both the importing and exporting countries’ diversification and robust development strategies (Miller, 2011).
Also, Bruce Pounder observed that accountants must incorporate the global economic factors in the preparation of their financial reports (Pounder, 2007). Improved understanding of financial reporting benefits global users of financial statements. The global environmental report combines the accounting principles of the countries concerned (Idiart, 2011). Accountants use international accounting principles to enhance readers’ comprehension of the company’s financial statement. The above discussion evidence that the accountants must contribute to the reduction of globalisation risks. The accountants’ implementation of globally accepted accounting standards reduces the risks of readers misunderstanding the quantitative data shown in the companies’ income statement, balance sheet, and the related statement of cash flows.
Moreover, Rosalind Dixon emphasized that globalisation cannot be avoided (Dixon, 2011). Companies who avoid joining the globalisation bandwagon will lose out to their competitors. The common goal of any company is to increase revenues and surpass the competitors’ revenues and profits. As a result, countries must refocus their political standing in order to boost their global business advantage. The United Kingdom and other global governments must come to the rescue of the local industries’ globalisation problems. The United Kingdom exports chemicals, clothes and other products (Wells, 2011).
Further, many countries easily succumb to global pressures to join the global market segment. The participant countries are pressured to join as importers exporters, or both importers and exporters. In the global market place, one nation’s globalization trade laws may influence the globalization trade laws of another country (Gaisford, 2008). The above discussion clearly shows that cooperation between the global country partners reduces globalisation risks. The nations’ joining the global market sector requires a meeting of the minds between the sellers and the buyers of foreign goods and services.
Likewise, Elisa Rancati reiterated globalisation had changed the rules of business competition (Rancati, 2010). The internal competition rules of one country may differ from the domestic competition rules of another country. Also, the intricacies of the countries’ local competition greatly vary from the competition factors and strategies within the global market segment. International trade includes incorporating the culture of current and future global customers (Wiarda, 2007). The British business culture differs from the United States business culture. Within the United Kingdom alone, there are some differences between the Scottish culture and the Irish culture.
Summarizing the above discussion, globalisation augmented a significant degree of convergence in both business practice and markets. All countries must comply with all globalisation standards. Countries refusing to take advantage of the globalisation bandwagon will lose to their globalized competitors. Developing innovative marketing plans for countries in the sense of globalisation, eliminates risk management difficulties.