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The term "globalization" refers to the interaction of firms and people from other countries, ethnic groups, and cultural backgrounds for the sake of business and financial gain. The development of technology, as well as worldwide trade and investment, have been blamed for the rise in globalization during the previous ten years. Among the advantages of globalization include improvements to the world economy, worker mobility, increased sustainability of developing nations, and cultural fusion. However, it also comes with drawbacks like a labor shortage, the extinction of cultures, and the enrichment of the wealthy. This paper provides an assessment of the benefits and challenges that international executive may experience in five years’ time as well as solutions to the problems. It also addresses the impact of globalization to the U.S. businesses.
Positive globalization effects on international executives
International executives have been some of the main beneficiaries of globalization, and this will continue into the future. One of the opportunities that these persons have been exposed to has been their ability to diversify the production process of their firms (Lemert, 2016). A firm will easily expand into different companies then focus on the production of various products that are aimed at meeting the tastes and preferences of the consumers in those regions. In so doing, it will be easier for an international executive to steer his or her company to success.
In the next five years, it will be easy for an international executive to study the global performance of markets before coming up with decisions on their production process. This will make it easier for companies to identify those markets or regions where they can benefit in terms of large consumer-base, thus an increase in their sales. This will also provide firms with exposure to the new markets and how they operate.
Due to the rise in globalization, international executives will be forced to come up with measures that promote workplace diversity in their organizations. This implies that companies will hire people from different cultural and ethnic backgrounds as well as gender, with the aim of increasing their financial performance. Additionally, the international executives will benefit from an increase in the skilled labor force in their force that will in return contribute to an increase in their firms’ performance.
One of the challenges that the international executives might face in the next five years is aggressive competition from rival firms in those countries that they will set operational base. With globalization, companies can now easily operate in different countries. This has in return increased competition in the markets (Lemert, 2016). Failure to come up with suitable measures aimed at dealing with the issue may lead to a reduction in the production of those firms headed by the executives.
Another challenge that the international executives may experience in the next five years is barriers regarding culture and ethnic backgrounds. Globalization has led to an increase in workplace diversity which is significant. However, in terms of setting a firm in a different country with varying cultures, it may end up being problematic to the international executives, especially ensuring that it maintains a competitive advantage over its rivals in the market (Collins, 2017). Issues of racial and gender discrimination in a diversified workforce may also end up leading to a reduction in employee motivation and productivity.
In the quest for dealing with the issue of aggressive competition, it will be vital for the executives to research the markets of those countries that they would want to expand their firm’s operations. In so doing, this makes it easier for them to identify the tastes and preferences of the consumers, the number of companies producing similar products and services as well economic performance of the country. With such market knowledge at their disposal, upon setting their operations in a new market, the organization will produce high-quality products and at the same time diversify their production. This will yield a competitive advantage over their rivals in the market thus enhancing their productivity.
International executives will also have to advocate for key strategies that are aimed at integrating diversity at the workplaces. Companies, for instance, will have to ensure that they practice equality in their allocation of duties and rewards to their employees. This will be made possible by restructuring the Human Resource department in such a way that it will hire individuals based on skills, talents and qualifications and not their cultural and ethnic backgrounds. Issues of racial and gender discrimination will also be eliminated, and those found guilty of the offense will have to be punished (Lemert, 2016). Finally, rewarding and recognition of employees within the organizations will be primarily based on merit and not favours and connections with the management team. Apparently, this will help in addressing issues that have come along with workplace diversity.
The rise in globalization has in the past decade had a significant effect on the U.S. businesses. Technology is one of the key economic drivers in the U.S. integration of technological systems into companies and businesses across the U.S. have contributed to an enhancement in their financial performance and productivity. Importation of these technological tools from countries such as Germany, Japan, and China, due to globalization, has been pivotal in the strengthening of the businesses in the U.S.
Inflation is another key economic driver that is directly impacted by globalization. The inflation rate as at Septemeber 2017 stands at 1.7%. Organizations from various other countries across the globe are now shifting their base to the U.S. due to the low inflation rates and sustainable economic growth. Businesses have also taken advantage of the low inflation rates by diversifying their production, thus increasing consumer base and market share.
Interest rates have also affected globalization, and the performance of the businesses across the U.S. high-interest rates discourages borrowing from financial institutions and vice versa. The current interest rate, according to the U.S. Federal Reserves is 1.25% which is good for both local and foreign investors (Boland, 2017). This has also made it easier for businesses in the country to borrow from banks, thus boosting their productivity.
Infrastructure is another factor that determines the performance of the economy. The U.S. boasts of sustainable and high-quality infrastructure. This has led to the movement of individuals and firms into the country aiming at benefiting from the infrastructure. Businesses taking advantage of this economic driver have also enjoyed an increase in their performance across the years.
Globalization is a necessary evil in that it has advantages and disadvantages in an equal measure. Some of its benefits include increased global economic growth, free international trade and movement of skilled labor. Challenges such as increased competition, labor drain, and workplace conflicts have also been witnessed as a result of globalization. International executives need to come up with vital measures aimed at addressing issues resulting from globalization.
Lemert, C. (2016). Globalization. Taylor and Francis.
Boland, H. (2017). US Federal Reserve split over pace of interest rate hikes. The Telegraph. Retrieved 11 September 2017, from http://www.telegraph.co.uk/business/2017/08/16/us-federal-reserve-split-pace-interest-rate-hikes/
Collins, M. (2017). Forbes Welcome. Forbes.com. Retrieved 11 September 2017, from https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#421c47c6ccce
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