Learning Team Skills Assessment Paper and Matrix Team A is made up of skilled individuals. The team is researching business ideas for a consulting firm. The team’s plan is to….
Impact of Globalisation and International Institutions on Organisations
Understand the wider implications and effects of global integration on organisation
The Business advisory service is providing its best services to the local businesses. It is also fully supporting the local businesses for finding out the best solution where ever it is required. The challenging task, which is to identify the impact of globalization, its effects on national economy and influence of the national and international institutions, further more how, the European Union is battling and providing the best plat form to the European community to build the economy and best practices in European institutions. These all above mentioned important features and factors are about to be discussed, in appropriate sequence forms.
Globalization has become a smart concept in the social sciences, a core statement the prescription of specialists in management, and catch phrase for journalists and politician of every stripe. It is widely asserted that to live in the era in which the great part of social life is determined by global processes, in which national culture, national economics and national borders are dissolving. Central to this perception is the concept of a rapid and recent process of economic globalization (Paul, h and Grahame, T. 1996, p. 1).Figure: 1
[Source]: (Impact of globalization, 2010)
1.1.2 The Impact of Globalization on Business
According to (Myatt, 2006) Chief Strategy Officer, N2grwoth, who had the opportunity to transact business in various parts of Asia, the Middle East, Canada, Central and Latin America, Russia and former Eastern Bloc countries, India, and the European Community. Conducting business on a global basis has always been of great personal interest. However, the days of doing business abroad are no longer a luxury. The ability to conduct business internationally is an absolute necessity if to remain competitive in today’s marketplace. Who has described in comprehensive manners in following series, (Myatt, 2006).
1.1.3 Market size
In present era marketplace/size, conducting business worldwide is both defensive and offensive play. In examining the upside of going global, consider the complete size of national and international markets and could likely be found that the most of the potential customers live across the world, So even if double, triple, revenue of the business (Myatt, 2006).
Now assume the downside of not going global, if company is not monitoring those customers competition will be, they will not only take a first mover’s benefits of holding customer loyalty, brand recognition, but they will also tow-chain key partners and distribution agreements. As consumers continue to become more demanding and the world economy continues to flatten, there will soon be an expectation that you be able to serve multiple markets in a perfect and smooth fashion. Being a slow operation in the present era could eventually bring lost business (Myatt, 2006).
Example: Indeed globalization is being experienced at present arguably became most recognizable with the end of the cold war, and have continued their fast move with the development of third world countries and other emerging markets, establishment of free trade agreements like China andNorth American Free Trade Agreement (NAFTA) (Myatt, 2006).
1.1.4 Technological impact
The advance development of Internet and other source of communications, the growing multi-national indentation of business, the emergence of the European Community, the maintaining impact of the Euro on global currency markets, as well as the increased liquidity of more frequently and efficient capital markets (Myatt, 2006).
“The above referenced worldwide macroeconomic maturation, more commonly referred to today as “Globalization,” has served to stabilize business and financial markets in such a dramatic fashion that many industry pundits have yet to reach an understanding of the depth and breadth of the impact, it has had on lowering political, financial, and economic volatility” (Myatt, 2006).
1.1.5 Effects on Financial stability
If taking in to account the stabilizing factor, globalization has had on the world economy. Presently recession had great effects on trade downfall, oil pricing, down condition of markets, housing crisis, and overall cost of living could be challenging more than it is. Conventional economic theory would suggest that with many of the negative economic metrics in play today, interest rate environment could more closely resemble that of 1980 In fact, when the United States went through the Great Depression it was largely a result of having an isolated economy. This would show foreign investment from the G7, and countries like China, Japan, and Dubai would see it as an opportunity to affordably, acquire interests in United States companies (Myatt, 2006).
Example: “Emerging, markets in Eastern Europe, India, Latin America, China and the rest of Asia present scenarios for higher growth, even on a risk-adjusted basis. On an aggregate basis, the statistics are impressive. For example, currently 80 percent of the world’s population accounts for 20 percent of world GDP. By 2015, 50 percent of world GDP will be accounted for by emerging markets” (Myatt, 2006).
1.1.6 Trading demand:
The economic progress, as well as the existing global companies that bring employment oriented around intelligent and knowledgeable capital, is creating demand for modern, western style commercial real estate infrastructure, Core assets such as office, industry, retail, multi-family, etc (Myatt, 2006).
1.2 Influence of international institutions on organisations
1.2.1 The role of National and International Institutions and effects
Almost every major national or international commercial business relies on subsidiaries or strategic alliances to obtain a comparable degree of influence and flexibility. As one measure of their scale, almost a third of total international trade now occurs exclusively within these multinational businesses. With the arrival of such global firms, international conflict has, to some extent, moved from nations to these firms, with the battle no longer among nations over territory but rather among firms over their share of world markets (Intriligator,2006,p. 25).