The Impact of Globalization on Organizations and Business Enterprises
This paper deals with the effects of globalization on organizations and business enterprises. At the end of the paper the reader will gain sound knowledge about globalization and its impact and how do increasing technologies help an organization.
The world today is increasingly going towards becoming a global village. Globalization has some good impacts on the world while some negative ones in some sectors for example business. It increases the competition from the national level to an international level where competitors from all over the world enter the market thus making the market regarding any product or service to become highly competitive. Global outsourcing has been a key element that has come into play with globalization and although it is a threat, one cannot deny its necessity.
Globalization has brought forward many problems to deal with in an organization. One such problem is the entrance of Asian organizations which have access to cheap labor and thus are able to introduce cheaper products yet with high quality. In practical this is seen in the case of Japan, who in a small time frame has successfully produced low-priced yet high quality products as compared to other competitors from across the globe. [John N. Pearson, Jeffrey S. Bracker, Richard E. White]
The theory of comparative advantage directs an organization to compare its opportunity costs of producing goods across country. That is to say that if our organization produces two goods and another competitor from across the world produces them as well then the need is to specialize in the production of one good to gain an advantage over the competitor. Opportunity cost is the amount of product "B" which should be given up in order to produce one more unit of product "A". Hence if our organization needs to give up a lesser amount of product "B" in order to produce an additional unit of product "A" as compared to our competitor then we are have the comparative