Solution
Soumi answered on
Jul 28 2020
SHORT WRITTEN RESPONSES
(ASSESSMENT 1)
WORD COUNT: 1582
Table of Contents
1. Globalisation and its Impact on Domestic Business 3
2. Factor Proportions Theory, International Product Cycle Theory and their Limitation 4
3. Imposition of Tariff on Chinese Goods by Trump 5
(i) Justification for the Tariff 5
(ii) Effects on Domestic Consumers 5
References 7
1. Globalisation and its Impact on Domestic Business
Globalisation is not a new phenomenon, it is a new term used to explain the old method. As mentioned by Giddens (2018), it is a flow of people, products or services across different nations, which leads to lot of integration and interaction among people, governments and firms of different countries, this process is aided by technology and international trade and investment. This flow has made significant effect on the culture, environment, human development, economic development. Globalisation has both negative and positive impact on the domestic business.
The emergence of multinational companies (MNCs) is the result of globalisation, as firms are more open and willing to seek opportunity in the global market rather than just restricting their products or services to a single country. According to Perlmutter (2017), companies can certainly hope to earn better margins and higher profits, since they significantly expand the scale of their business to meet the global standards in terms of both quality and quantity. There is emergence of competition among firms to better serve the customer, which makes it difficult for the firms to monopolise the market, thus they are forced to offer better quality products or services at reasonable prices. Firms are also able to better serve their customers by relocating their offices and factories in different nations.
Globalisation has resulted in lot of people movement in foreign land for jobs and education. As a result, there has been expansion of job market and employees are able to find as per their skills and interest and the same is true for companies, which are able to source right talent from different part of the globe.
As supported by Buckley and Ghauri (2015), globalisation has also affected culture positively, where people have become more tolerant towards people from different regions. This tolerance has resulted in people assimilating or integrating with the culture of the different nation, which is essential for strong team spirit among the employees. This cooperation is not limited to work environment only but also resonate in another fields.
As affirmed by Giddens (2018), there are significant negative influences on the domestic firms, which are unable to compete with the larger MNCs, due to their smaller scale or when the top management isn’t experience in international business. It has been observed that large international firms just ruin the market of already established domestic firms on the strength of their capital.
There can be negative influence on the culture of the nation, where foreign countries may try to capture the market by destroying the cultural aspect of other nation. For example, westernisation of eastern countries. The domestic employees may become redundant due to introduction of more skilled employees from foreign nation. For example, in the US, workers from eastern part of the globe are working as they are cheaper and equally skilled, which has resulted in political distu
ance over this issue.
Therefore, Globalisation is a double-edged sword, which has both significant negative and positive...