Globalization has changed the world economy by bringing notable changes in the business practices. The changing nature of customers for different products in the global scale has helped create a global market where global companies are integrating for an elevated business. Citigroup credit cards, Starbucks coffee, Coca-Cola soft drinks, IKEA furniture, McDonald’s hamburgers and Apple iPhone are a good example of such products that are continually encouraging the global market. Interestingly, it is not necessary that globalization benefits are limited only for such giant companies. According to the International Trade Administration, above 295,000 small and medium sized companies in the United States of America were involved in export business (Madichie, 2012; p.5).
Two macro factors are driving the globalization such as declining barriers for trade & investments and technological change.
The barriers for the trade and investments in the earlier age were not that suitable for the business in the global market. However, few initiatives from some global governing bodies such as GATT have done few effective works to lower the barriers to cross-border trade and investments. According to an agreement, eight rounds of negotiations were done with the member states to lower the barriers for a healthy flow of services & goods. The Uruguay Round of negotiations in the year 1993 did further reduce the barrier to foreign trade (Madichie, 2012; p.10).
The reduction in barrier to cross-border trade was theoretical in concept, which became more real only with the advent of technological advancement such as transportation technology (Madichie, 2012; p.12). The transportation technology had seen some major revolution such as Mercedes, which actually invented the definition of luxury cars. The effect of globalization can well be understood with the success story of the company in China, which is its single largest market in the world. Nevertheless, the company is leading in USA as well over BMW and Audi. The pre-globalization era would never let that happened the cross-border trade of the company. However, globalization has made communication very friendlier and because of which companies such as Mercedes-Benz has its manufacturing centres across the globe such as in China (Forbes.com, 2017).
Free trade was never such practical as it is now. The advent of globalization has changed the trading scenarios in the last 20 years. The exporting business was never such handful. This is because of such numerous small & medium sized companies have now become largely involved in the export business. China and India have witnessed the maximum growth of economy because of globalization (Forbes.com, 2017). Globalization has enabled many multinational companies to enter into the Chinese and the Indian market. For example, Mercedes-Benz has its manufacturing centres in both India and China. Globalization has helped some developing countries such as China and India the most. In the last few years, China has become a highly productive country in terms of exporting goods such as mobile accessories. An elevating export business along with various other features such as the local government policies are actually improving the economy of the country, which is only behind to the United States of America (Hanushek, 2013). The global economy has in it some problems as well such as the interrelated economy of different countries. This indeed means that an economic crisis in some other parts of world might affect the economic status of rest other countries. The one example of such economic crisis is the economic recession in the year 2008-09 (Bussière et al., 2013). Only few countries such as Australia were able to successfully dislodge the blow during the economic downturn in the year 20008-09.
1. A democratic country
2. Government body is mainly divided into three sections such as head of state, head of government and Cabinet (Jarausch, 2014)
3. World’s 5th largest economy
4. Highly developed industrial nation
5. Third largest exporter in the world (Schwarzer, 2012)
1. It is a democratic country
2. Government body is run by the different governing bodies such as the state and the national government
3. National government is run by the President & the Prime Minister of India (Mitra, 2012)
1. World’s 10th largest economy
2. World’s 6th largest exporter of service
3. 2nd fastest growing economy of the world (Ahluwalia & Little, 2012)
The Indian political situation is very unstable. The opposition party in this country are up against the governing body every time. They never support in the numerous government initiatives. This is why the infrastructure growth in this country is very slow. On contrary to this, Germany is more stable to India in political terms. They are open to foreign relations, which is very necessary for an effective economy. They are open to growth as well.
Economically India has better prospect in future than Germany despite of the fact that the country is the fifth largest economy of the world where India is at the 10th position. Unarguably, India is the second fastest developing economy of the world. On other hand, Germany has struggled with its economy in past. India has a robust and constantly moving economy in the country.
Global economy has opportunities in it for the managers to make their business a success. However, it is a challenge to them as well because they need to have some solutions for the economic crisis that might occur in some foreign places. In the global economy, the economic crisis in one country affects the economy of others. Moreover, the economy of different nations is interrelated. The one example of such problems is economic recession that happened in the year 2008-09.
Employees who want to become successful managers they would be recommended for some strategy such as job cuts when there is an economic recession. This would help them to have their control on the production costs. Moreover, this is necessary to remain less affected from such an economic recession.
Completion of the project at the earliest of the possibilities would be another point of recommendation for employees that want to become a manager. This would help to maintain a healthy relationship in between the clients and the manufacturer. This would help the manufacturers in recovering its expenditures as well.
Ahluwalia, I. J., & Little, I. M. D. (2012). India's economic reforms and development: Essays for Manmohan Singh. Oxford University Press.
Bussière, M., Callegari, G., Ghironi, F., Sestieri, G., & Yamano, N. (2013). Estimating trade elasticities: demand composition and the trade collapse of 2008-2009. American Economic Journal. Macroeconomics, 5(3), 118.
Forbes.com. (2017). Forbes Welcome. [online] Available at: https://www.forbes.com/sites/greatspeculations/2017/01/31/mercedes-benz-is-the-number-one-premium-automaker-how-it-happened/#103e99223d9f [Accessed 20 Jun. 2017].
Forbes.com. (2017). Forbes Welcome. [online] Available at: https://www.forbes.com/sites/realspin/2012/11/15/in-an-increasingly-globalized-economy-free-trade-is-more-important-than-ever/#4241e6d17386 [Accessed 20 Jun. 2017].
Hanushek, E. A. (2013). Economic growth in developing countries: The role of human capital. Economics of Education Review, 37, 204-212.
Jarausch, K. H. (2014). Students, Society and politics in imperial Germany: The rise of academic illiberalism. Princeton University Press.
Madichie, N. O. (2012). International Business: Competing in the Global Market Place. Management Decision.
Mitra, S. K. (2012). Politics in India: structure, process and policy. Routledge.
Schwarzer, D. (2012). The political economy of Germany in the sovereign debt crisis. Resolving the European Debt Crisis. Washington, DC: Peterson Institute for International Economics, 143-161.
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