Paper Example on Business in a Global Context

Introduction

According to Okoye & Nwaigwe (2015), globalization is the spread of capitalism in almost every nation in the world. The world has become like a shopping mall where goods and services are everywhere at the same time. Businesses everywhere are being connected despite their different cultures and economic systems to operate within the same environment because of the effect of transnational firms and advanced transmission of information. Globalization can be referred as liberalization, internationalization, Westernization, or modernization (Okoye & Nwaigwe, 2015).

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In recent years it has been observed that there has been the integration of the national markets resulting in expanding international markets. Businesses worldwide have been linked up. This has been made possible by portfolio savings like global credits, acquisition of stocks and through direct foreign investment. China has invested heaving in other countries like Nigeria, Sudan, Angola, Iran, and among other countries. They provide credit for such countries to support infrastructure, public and industrial development. China has been seen to side with oppressive regimes threatening world order (Xie & Page, 2010). For example, China was observed to support countries like Sudan through their oil investment despite its influence on abuse of human rights.

Effects of Globalization

Manufacturing

Globalization has led to success in manufacturing has been made possible through franchising which has lead to rapid growth of businesses (Okoye & Nwaigwe, 2015). It has ensured the continuity of businesses. It generates more income and facilitates foreign exchange. Business globalization has ensured efficient working of franchises through staff training. It has promoted the revival of failing businesses and ensured publicity and advertisement. It has also enabled businesses to create a competitive advantage. Franchising on the other side may also lose grip of their brand having permitted another firm to work under their designation. Confidential information about the firm are exposed. In other cases, the franchisees develop and surpass the franchisor (Okoye & Nwaigwe, 2015).

Mergers and International Acquisitions

Globalization enables encourages mergers and international acquisitions, and consequently strengthens the weak firm (Okoye & Nwaigwe, 2015). It has made it possible for strategic alliances to be formed that has enabled firms to share their resources.

For example China has private firms that are willing to invest in markets with large resources to increase its market share. Since the inception of the go global China has increased its outward foreign direct investment with nearly 20 times. This has increased research in the area. China uses cross-border acquisition and seeks technology to achieve a designed competitive advantage. She has a resource-driven model behind its overseas acquisitions (Paul, 2016).

Information Technology

Globalization has facilitated investment in information technology that has contributed to international trade through fast flow information and exchange of goods. It has reduced the world into a global village (Okoye & Nwaigwe, 2015). Technology has lost its sophistication due to the copying of technology especially by China this, therefore, makes America stand out because of her unique technology (Nye, 2015).

Rising Inequalities

Globalization has contributed to the rising wage inequality this is caused by the limited factor of mobility results to issues of resource allocation (Stijepic, 2014). Skills composition of firms' mobility between skilled groups is different and therefore this creates differences in success between companies favor large and industrious firms and therefore the competence gain which results from reallocation of incentives from less to more valuable firms (Milanovic, 2005). Trade-stimulated differences in profitability among companies increase wage inequity in the group.

Globalization result to information discord which hinder distribution of employees to more productive companies (Stijepic, 2014). Firms are unique in production, produce markets are linearly differentiated and market entry productivity and exporting are related to fixed capital. Information discord hinder employee distribution to the more productive companies and wages posted. Labor discords determine employees' mobility across companies (Stijepic, 2014).

Rise of China

China has recently seen dynamic growth in its economy. According to Nye (2015), China has become a fast-growing economy and is viewed as the most likely competitor of America in the global market. China's economy is predicted to surpass the USA by 2050 to become the largest economy. In his studies, Paul (2016) explains that China has experienced rapid growth in the last three decades with her estimated annual economic growth rate being at 10%. Her growing economy is viewed by historians as a risk factor to the US global power (Nye, 2015).

China's economy has experiences falls and recovery in the 20th and 21st Centuries. China is measured through purchase power parity it will soon overpower the US. The dramatic rise of China can be related to being the cause of global economic imbalances. Globalization has resulted in internationalization and liberalization that has lead to uncertainty in the global market (Glyn, 2005). The growth of financial markets and their fragility, rising of America debt and China's rise have been disrupted the global economy. China's rise is attributed to its rapid growth in its real GDP with an estimated 6.7 % annually (Xie & Page, 2010). China's economy has been growing at three times the rate of the United and will surpass its output in a few years (Josef, 2016).

Josef (2016) posit that her economic growth has been doubling after ever seven years. China is also believed to be at the epicenter of American decline. America's decline is associated with its chronic fiscal planning and military overstretch. America's economic decline is observed to take place every ten years. This is also associated with Sputnik shock, missile gap, imminent debts and claims of production of low-quality goods.

China is believed to be the global garage and is, therefore, serves as an industrial hub due to its availability of cheap labor. China is most populous with an estimated population of 1.3 billion making it the largest economy with the largest military and this making it have an edge in the global market. Despite this China is predicted that not to remain at the top for long this is because of its demography planning which will lead to it having a large number of pensioners in the coming years and reduced labor muscle. On the other hand, America attracts the best brains to its Universities and will, therefore, have sustainability of human skilled capital even in the coming years. China's growth is attributed more to globalization and world trade organization which has improved their level of exports.

China executed liberalization guidelines and linked up with international market in the 1980s. Its GDP was supported mostly by the public sector until recently when they saw the importance of acknowledging the role of the private capitalist (Xie & Page, 2010). China has seen growth in the last two decades.

High Exports Growth Rate

Globalization has contributed to China's growth is their ability to exports its products everywhere in the world. China has strategies such as sales to strangers. The resultant effect of this has seen its annual growth rate become an average of 17.1 % (Paul, 2016). China has also recorded an annual growth rate of exports of 10 %. Its ability to produce more for export has been associated by its self-supporting manufacturing sector. China possesses exclusive features such as low-cost labor and heavily supported finance structure for infrastructure. China also boasts of having a high income per capita and a high degree of economic openness (Paul, 2016).

Reliance on Inward and Outward FDI

Globalization has been greatly influenced by foreign direct investment. For example researchers argue that China's growth rate has been as a result of its ability to attract huge foreign direct investment (Paul, 2016). It has liberalized policy which allows easy implementation of policies to incentives FDI from transnational companies. The inflow of foreign direct investments contributes to the development of infrastructure to become the leading durable goods producer. China has also gone global with outward foreign direct investment where it has been able to invest in markets with natural resources.

Soft Power

This lies in culture, political values, and foreign policies. Globalization leads to a change in culture and values. For example China's influence on the USA has been more positive than negative. However most Americans recognize that China tendency engages in undue trade practices. Most people worry this could bring negative impacts upon American' jobs in terms of wages from low wage economic competition (Xie & Page, 2010). China has a positive influence on Asian countries.

Cultural Conflict

Globalization results in a cultural conflict where different nations have different cultures. This may result to power distance where not all individuals are equal for example in Japan the power score is at 54, as a result, it is regarded more hierarchy making decision making slow (Esposito & Verma, 2017 ). It results in challenges of transition from unproductive state-owned enterprises leads to growing inequity, environmental destruction, great internal migration an limited guideline on safety, bribery and an insufficient rule of law (Nye, 2015). Change in diplomatic roles although America has been largely known in ensuring diplomatic relations. China is also engaging more in diplomatic roles and is now being involved in peacekeeping missions (Nye, 2015).

Military Power

Globalization has led to the need to have a powerful military base. America invests 4 times more of her GDP to the military as compared to China. It is predicted that with the growth of China there is a looming risk of a clash between China and USA. According to Nye (2015), it is believed that Chinas growth and globalization may result in the loss of America credibility and cause other nations into a bandwagon and result to imbalances. A country with a big economy forms a foundation for a great military power. It provides opportunities to expand and distribute their culture to open diplomatic efforts internationally (Xie & Page, 2010).

World Uncertainties

China is predicted to increase this is because of financial competition. The search for value may result in financial excess created by complex financial traders. This may increase the global financial crisis. The rapid growth of Chinese contributes to demand exports which result in capital accumulation in those industries. This in return may affect the currency values causing them to depreciate. Real incomes reduce. The surplus of labor in China and everywhere will create a higher level of foreign direct investments which will create investment drain and less wage for labor provided. Bargaining power of workers will be weakened.

China itself with its notorious credit system will cause instability and raise financial crisis which may result in a recession in most countries (Glyn, 2005). China may also experience a credit crunch and over-accumulation of credits and lead to its recession. The rate of absorption of labor could generate wage pressure which will bring an industrial conflict that is difficult to restrain. China's appetite for resources will result in spiraling effects as countries try to anticipate long-run trends (Glyn, 2005).

Globalization leads to loss of imperial power...