Globalisation and the International Business Environment Essay

Globalisation and the International Business Environment - Essay Example64-65) as the opposite of localisation it is the process of adapting products for use outdoors the home nation (think steering wheels in cars or Chinese versions of Windows). Firms must internationalise if they want to sell to markets outside their home country, because foreign markets have contrasting cultures, needs and wants, demanding that firms make adjustments to products and services, organisational structures, leadership and people systems, and supply chains, amongst others.In a landmark paper on the topic, Whitley (1994) observed that the post-war internationalisation process of firms was primarily control by step-ups in foreign direct investment by transnational (or multinational) enterprises. This led to increased interdependence of the industrialised economies and changes in the world economy with the adjacent characteristics (1) the establishment of a distinct global system of coordination and c ompetition, (2) the denationalisation of leading firms, and (3) the international standardisation of managerial structures and practices. It can be said that the natural emanation from internationalisation to interdependence and greater integration of the world economy resulted in the complex phenomenon that we now call globalisation.Globalisation is a concept that is better(p) described than defined because of its complexity. A simple definition, like globalisation is the integration of the world economy, reshaping business, reordering lives, creating social classes, different jobs, unimaginable wealth, and wretched poverty (Micklethwait and Wooldridge, 2000, p. xvi), would non do justice to the term because it focuses too much on the economic aspect. Globalisation is much more than just money, business, and wealth.As Stiglitz (2002, p. 9-10) described it, globalisation integrates countries and peoples, their economies and politics, their cultures and fates. It breaks garbage d own artificial barriers to the flow of goods, services, capital, knowledge, ideas, and (to a lesser extent) peoples across borders. It creates new institutions that joined with existing ones to work across borders. There are then good and deadly sides, so whilst many another(prenominal) condemn environmental degradation, corruption of cultures, and the spread of squalor, poverty, misery, and greed, many also praise the improved access to cheaper medicines and food, better living conditions, gradual obliteration of poverty, and increased opportunities for millions of people around the globe.Therefore, whilst many consider internationalisation and globalisation as synonymous terms, the former would refer to an outward process where firms adapt to and increase their presence in international markets, whilst the latter can be described simply as its natural integrating result. Globalisation is nothing new, but in its past incarnations, the inability of previous generations to manage its bad side has made it a factor that led to two of the bloodiest wars that mankind has ever experienced.Knowing this play down reminds us of what the philosopher Santayana said about learning the lessons of history so that we would not be doomed to repeat it.Main Drivers of GlobalisationLike success which has many fathers, globalisation (according to whoever is the author) has many drivers (Yip, 2003 Johnson et al., 2003 Stiglitz, 2002 Micklethwait et al., 2000 Porter, 1990) that we can summarily classify into five groups. These drivers are the key