Global business enironment Essay Example | Topics and Well Written Essays - 2000 words

Global business enironment - Essay Example Although global organisation operations are intense in the developed nations, the developing nations have also been impacted in one way. Amid the globalisation and diversification of production, the benefit of business activities that are carried out abroad has increased rapidly than even domestic markets (David, Joakim & Richard, 2008).Therefore, the essay evaluates the advantages and disadvantages of globalization for business. Today wave of globalisation that began immediately after World War II has moved businesses and entire world economy to a state of interdependence, and it enabled it through making possible expansion of investment and trade across the national borders. Multinational companies that are always referred as borderless organisations have played a key role in accelerating the pace of world economic interdependence and integration by expanding their businesses (Wallerstein, 2009). Globalisation has led to the dismantling of national barriers and the breakdown of barriers to the flow of goods, capital, services, ideas and people, and the explosion in the volume, complexity and variety of those flows. In addition, it has led to increasing uniformity and standardisation among businesses, the growing homogenisation of infrastructure, policy, and ideas to conform to the global platforms(Wallerstein, 2009). For most of the business organisation, globalisation means an opportunity of taking advantage of scale, and exploiting synergistic benefits, as well as benefiting from the geographical merits and the market power advantages. However, according to the scale economy theory, the average cost per unit goes down as the amount of goods and services that are provided increases. Growth and expansion abroad of the business are the key strengths to getting the benefits of scale, hence achieving important cost reduction for the cost of a production unit, sales system