Globalisation in business is a historical process, the term “Globalisation” begun to use more commonly in 1980s, which happened due to of innovations and the research which has been done from a long time on improving the communication and technology. Just because of the fastest communication today more or less every business is dealing their customers using technology and having the communication with them using modern devices. Here in my assignment i will discuss about the globalization and what are the reason for the growth of globalization?.
I will also discuss about the process of globalization and its effect in the market.In my case study i will take the Siemens AG company.
Siemens AG is a global electrical and electronics business with a turnover of £53 billion. The business employs over 450,000 people. Siemens is multi-national. It operates across 190 separate nation states. Executives in Germany and across the world must make decisions in the best interests of Siemens’ shareholders. Most multinationals have many capabilities.
They must make decisions about where their separate activities should be. For Siemens it is not efficient to design and manufacture all products in all countries. It is more efficient to concentrate manufacturing to keep economies of scale through specialization. Products can be shipped anywhere within the group.
According to modelski et al,(2007) “globalization” as (the process of) “emergence of institution of planetary scope” As readied by Isard (2005) in globalization and international financial system. Imagine the world twenty years ago when there were no personal computers, no laptops, no mobile phones the communication was very slow and because of not having the internet facility there was a limited communication not for the people within the country but internationally as well, as we do emails today which takes only few seconds to reach the recipient there was no concept like that and the messages sending and receiving was dependent on days and weeks, this all is changed now just because of globalisation. According to J.Ali (2000)
“Firms across the world have recognized that globalization is a reality that creates unlimited opportunities while intensifying competitors and threats” Globalisation is the integration between the markets, nations, states and technologies it is the way which enables the individuals, corporations, organisations, nations and states to reach the world easier, cheaper, faster and safer than ever before, it affects everyone like the internet has enabled everyone to connect to each other at any time and to learn the aspects of any culture in the world, now the trade is much easier and is diversified, the ideas are being shared among all people of earth the cultures are being refined the globalisation is conquering markets and capturing hearts. There are a lots of organisations which are selling their products throughout the whole world the picture of international trade has been totally changed. Reasons for the growth of globalisation:
As the communication barriers have been removed the need of international trade exposed, the company’s thought to expand their businesses for these reasons the globalisation has got the rapid growth. Growth of regional economic or trading blocs such as EU, NAFTA (north American free trade agreement) APEC(Asia pacific economic cooperation forum) has contributed in making the globalisation happen and to promote the trade between the counties the allowance of free trade between the members of the blocs countries, this helps the countries to grow together and that is the way of making the economy of different countries better and stronger. By this the countries are included in the same blocs or the member countries help each other country people to maintain their economic stability as well.
The development of transport links and networks capable of moving goods, quickly and relatively cheap is also one of the main reasons behind the growth of globalisation, the shipping transportation has improved very much and the product are being shifted to one another countries in bulky amount. The advancement in technology and communication made the possibility of transferring the financial capitals due to which people were attracted to do businesses in other countries as well, the production cost is not same for any product all over the world so many businesses wanted to install their production plants in those countries which are more cheaper which tends the global market again to rise.
Other then these every business wants their customers to be satisfied by their product for that purpose the feedback is necessary the feedback is being received by the companies by having the online feedback forms where the suggestions and recommendations are been given by the consumers for the product. The companies are providing the assistance services to their customers by giving them an option to call the assistance team at any time the services are provided through internet or phones, live chat, live calls and live video conferencing.
Process of Globalisation and Effects
To explain the effects of globalisation and the process we are adding a case study of a multinational company that how the company is handling the issues regarding the customers worldwide.
A Siemens case study: Meeting global and local needs
A Siemens case study: Meeting global and local needs by times100 As readed by Gills,bThompson (2006) globalization and global history:
Multinational companies are the agents of globalisation the access of product from all over the world is a very good gift given by the internet to the companies who wants to have more potential customers. Globalisation has linked the first world countries to the third ones most of the manufacturing setups are in third world countries and this made a very beneficial impact on both as the first world countries are enjoying the cost minimisation by
having cheap labour and low production costs and the third world countries are having the employments and jobs by having the plants in their countries on the other side mostly the service sector is being served by the first world countries. As explained by collier, dollar and lank in globalization and environment (2002): Keeping in view that what the customers actually need is the main aim of Siemens for this there is expertise working with Siemens form 150 years which makes the company to stand where it is today. The company has channels in about one hundred and ninety countries and the diversification of different cultures and different languages with different people is being keenly handled by the managers of organisation. As readed on Turchin,p (2003) why states rise and falls:
However due to of easy trading throughout the world the outsourcing is happening that puts the positive impact on Siemens as they are producing electronic products so most businesses are using Siemens product because of the reliability and the company is also producing the power distribution and transmission equipments which are very popular with them the power generators are also being produced. The trade barriers has been removed by the governments and people are able to move from one to another country and can easily take their money with them to open business in other countries, Siemens has expanded their business in many countries and are running their businesses in 190 countries which is because of the innovative approach of organisation.
Huge amount is spending upon the research and development sector to improve the company’s abilities to serve as good as they can. Technology is improving day by day new inventions are coming up, Siemens is also contributing in the technological sector as well by producing product related to latest technology. In the field of automation and control Siemens is one of the finest service providers for the industrial solution and services as the world has been globalised and innovation is very important for the survival of any company, Siemens has got a very huge success because of the innovative approach the company has adopted the trend of innovation and inventing more than thirty new inventions a day, the company is assumed second strongest power technologies worldwide.
Well globalisation has given lots of benefits for mankind people are having much ease to get knowledge and having more opportunities, have the access to explore the whole world but there are few problems which globalisation has created but these can also be removed by using the globalisation itself.
Any how the world has become a global village now the trade, communication and transportation is getting easier as the new innovations are being made by the information technology. Information technology played a very important and vital role in making the world as it is today, there are companies which products are so popular that everyone is known to them like the name which is most prominent in making the products related to electronics is “Sony”. This is company which sell their product to the whole world.
The market for a product is now very vast because of globalisation, the products are being delivered to the consumers no matter where they are, marketing is done to the whole world and it is just possible because of the fastest communication and the credit is again going to technology.
Modelski,Devezas and Thompson. (2007) globalization as evolutionary process modeling global change, Rutledge, USA and Canada ISARD(2005) globalization and international financial system: what’s wrong and what can be done, Cambridge university press,USA Gills,b. and w.r Thompson(eds.)(2006) globalization and global history.london:routledge. J.Ali globalization of business: practice and theory, International business press, NY Collier, dollar and lank.(2002) globalization, growth and poverty, oxford university press, Washington 2002. Turchin,p.(2003) historical dynamics: why states rise and falls,Princeton,NJ:Princeton university press. http://businesscasestudies.co.uk/siemens/meeting-global-and-local-needs/globalisation