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The Emerging Trend
Academic affiliation: Oklahoma State University
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A current trend in the business world is when large companies move across their home countries' borders to conduct business in foreign markets. Competitively global firms are constantly growing into new markets that show great potential for success. However, these newly entered conglomerates pose an additional threat to local existing businesses, culture and other economic factors. Multinational companies entering into new markets can have both positive and negative impacts on local economies; therefore a greater understanding of corporate globalization must be achieved by global firms and those in the field of business. The purpose of this essay is to examine further scholarship which focuses on the emerging trend of corporate globalization and the impact it leaves on local economies across the world.
International businesses are growing exponentially in both developed and developing nations, where they all want the chance to compete against or become the leaders within a given industry. However, for certain companies, the opportunity to enter into an undeveloped market is slim, and countries must wait for new innovations from foreign competitors to force local companies to meet the demands of the consumers. Furthermore, in various cases "in today's global markets, you don't need to go abroad to experience international competition. Sooner or later the world comes to you" (Bartlett 139). Therefore, consumers in undeveloped domestic markets can receive the benefit of increased variety of goods and services, not only from international firms but through their own local firms as well. Christopher A. Bartlett and Sumantra Ghoshal are pioneers in the research of corporate globalization, and after several tests, they derived conclusions on how a company can use certain aspects of their business to their advantage. For instance, a common mind-set within developing countries which the researchers attempt to dissolve is that local corporations "couldn't compete successfully on the global stage" (Bartlett 135). In all actuality, the truth is just the opposite, local companies can compete globally and potentially be stronger in their own markets when they feel threatened. Another scholar who agrees with Bartlett and Ghoshal's notion of local economies surviving in their quickly changing business firms is Roseabeth Moss Kanter. According to Kanter "the best way for communities to preserve their local control is to become more competitive globally" (120). Therefore, one common belief held by international business scholars is the idea that through competing globally and allowing large international firms to enter domestic markets, local businesses and communities can maintain greater control of their own economies and customers.
While Bartlett and Ghoshal researched different strategies for emerging businesses, their research did not end there. Through the pair's extensive research they were able to devise specific forms of businesses operating across nations. Their forms of businesses operating abroad were developed into a typology which included multinational, global and international companies. Expanding on their typology, two additional researchers, Siew Meng Leong and Chin Tiong Tan, were able to label a final form of cross-national businesses, leaving a topology of four types of firms. The additional type of firm developed and described by Siew Meng Leong and Chin Tiong Tan included transnational corporations. Further, this fourth form of an organization involves being specialized and dispersed, having different contributions, and having knowledge which is gathered and shared together to worldwide industries and operations (Leong 452). However, how an organization is classified certainly defines itself and its means of conducting business. In the end, without the research of Bartlett and Ghoshal, it would not have been possible to distinguish among corporations and predict their global strategy as intensely and effortlessly as it is now.
Corporations can have several different global business strategies to help them succeed. For it is believed that "success will come to the companies, large and small, that can meet global standards and tap into global networks" (Kanter 119). If a corporation of any size is capable of adjusting to the distinct demands across the world, then they will prove to be the most profitable and successful globally. Kanter stresses that globalization can be useful for developing economies and if large multinational corporations are responsive to the local economies they enter into, then they can help the nation develop for the better. Rosabeth Moss Kanter is a strong believer that globalization can have a positive impact on culture and shares this believe with other international businesses and economic scholars. For instance, Stuart L. Hart agrees with Kanter that corporations can make a difference in developing economies, especially in the environmental arena. Hart further believes that "corporations are the only organizations with the resources, the technology, the global reach, and, ultimately, the motivation to achieve sustainability" in a world constantly polluting the earth and depleting it of its resources (67). Culture and pollution are two aspects of an economy that can be positively changed by corporate globalization as they have the means to re-source and re-invent their strategies to meet local needs.
Still, Kanter and Hart's views are not shared by all scholars. James N. Rosenau suggests that corporate globalization can have different effects on developing countries. Rosenau believes that there exist two extremes in the international market, localization and globalization. These extremes can meet in the middle if corporations sacrifice certain things. Furthermore, Rosenau's book points out those local and global economies have direct effects on one another and overlap in many areas of business, such as resources and means of production. A central theme of the book, which conflicts with Hart and Kanter's ideas of positive effects of globalization on the economies, which Rosenau conveys, is that "the insufficiency of globalization [is] a concept with which to organize understanding of world affairs" (3). In order to understand international relations and cross-culture effects on societies, it is believed that problems of globalization must first be observed. Furthermore, corporations that are going international and entering infant markets are not the only factor changing societies' structures and beliefs. Rosenau points out that those cultures are continually changing at the demands of the residents of nations not at the need of corporations. "There is growing evidence that the consumption of the mass media throughout the world often provokes resistance, irony, [and] selectivity" of goods across the global market (Rosenau 190). Cultures across the world are constantly influenced by western media, predominantly programming from the United States, therefore people demand the products and living styles of their western counterparts.
The westernizing of the world is a major issue discussed by scholars researching international business. The "American Dream" is seen as a threat to cultures across the world. The spread of corporations from the United States to other nations is looked down upon by many scholars for the very same reason. One particular scholar stressed:
In today's global consumer climate, people all over the world are being subjected to a uniform, homogenized culture in which everyone is encouraged to eat the same food, wear the same clothing and live in houses built of the same materials…this monoculture is not an inevitable result of some sort of evolution, but rather a result of deliberate policies made by government and big business (Norberg 258).Due to this rapid consumer monoculture that has developed across the world, Helena Norberg-Hodge believes that companies need to re-route back to locally owned businesses within culturally similar borders. Furthermore, the general argument presented by Norberg-Hodge is that the process of localization needs to be the goal of businesses not globalization, and by implementing localization, it will be possible "to restore health and vitality to people and communities" (260). Through localization cultures become diverse, rather than one Western affluent lifestyle, and less competitive over the same scarce resources distributed across the globe. Therefore, she demands that specific action be taken by citizens, "pressure needs to be applied to governments to address specific policies on trade and subsidies," so that local tastes are restored to their natural state (260).
Investigating and finding the proper means to restore the impact globalization has left on the world is also the issue of concern of other international business and economic scholars. For instance, Editor Kevin Danaher compiled a series of articles regarding the effects of corporate globalization here in the United States, at the home bases of many large multinational corporations. In the United States, one threat of corporate globalization that sticks out greatly in the minds of citizens is the effect on American wages as corporations move abroad. Many researchers try to discover the exact impact globalization has on wages and other perverse changes it leaves on American standards of living. In Kevin Danaher's introduction to his compilation of scholarly articles he points out four specific ways which international corporations alter preferred ways of living in the United States. First, he points that when corporations expand overseas, they put the United States workforce in direct competition with lower paid foreign workers (Danaher 15). Also, technologies offered from abroad are a threat as they cause anxiety and hostility among workers (Danaher 16). More importantly, when corporations go global, they become less supportive of any one nation's tax system and in the process lower the revenue of the nation's income (Danaher 16). Lastly, the downward move of high "living standards of the majority," to other nations by, "the corporate class has shifted more and more wealth from our pockets to theirs," therefore allowing the average American worker to build resentment (Danaher 16). Therefore, it can be seen through Kevin Danaher's compilation that developing nations are not the only economies affected by corporate globalization. American businesses that go multinational can leave an impact on their own country's culture and ways of life. Concisely, many scholars would agree that corporate globalization truly influences all aspects of the world in some way or another.
While Kevin Danaher and Helena Norberg-Hodge are two scholars who look unenthusiastically upon globalization, there are equally the same amounts of scholars who believe it is inevitable, and therefore the world should welcome and embrace all that it can bring to nations across the world. Corporate globalization affects local economies everywhere, the only difference between outcomes are how they are perceived by citizens and community members of separate nations. If corporate globalization is truly inevitable and not slowing down in the near future, then in order to succeed globally, multinational corporations must follow guidelines developed and discussed by international business scholars. Scholar guidelines propose that multinationals "reconfigure their resource base, rethink their cost structure, redesign their product development process, and challenge their assumptions about the cultural mix of their top managers" (Prahalad 79). Furthermore, if these guidelines are followed by emerging global firms, then they will have a greater chance of success globally in the long-run. Additionally the scholars, C.K. Prahalad and Kenneth Lieberthal, emphasize and conclude that "multinationals will be shaped by a wide variety of forces in the coming decades. The big emerging markets will be one of the major forces they come up against" (79). Prahalad and Lieberthal stress, along with other scholars that no matter what globalization is going to come in the very near future and guidelines will have to be adjusted to meet different demands a multinational company may be faced with. Therefore, scholarship in business show that an emerging global firm may increase its probability of success, in a foreign market, by determining its potential impact on an economy as a direct result of developing a greater understanding of corporate globalization and the aspects it brings to the ever-changing business world.
Bartlett, Christopher A., and Sumantra Ghoshal. "Going Global: Lessons from Late Movers." Harvard Business Review 78.3 (2000): 132-142.
Danaher, Kevin, ed. Corporations Are Gonna Get Your Mama: Globalization and the Downsizing of the American Dream. Monroe, ME: Common Courage P, 1996.
Hart, Stuart L. "Beyond Greening: Strategies for a Sustainable World." Harvard Business Review 75.1 (1997): 66-76.
Kanter, Rosabeth Moss. "Thriving Locally: In the Global Economy." Harvard Business Review 73.4 (1995): 119-127.
Leong, Siew Meng, and Chin Tiong Tan. "Managing across Borders: An Empirical Test of the Bartlett and Ghoshal  Organizational Typology." Journal of International Business Studies 24.3 (1993): 449-464.
Norberg-Hodge, Helena. "The Consumer Monoculture." International Journal of Consumer Studies 27.4 (2003): 258-261.
Prahalad, C.K., and Kenneth Lieberthal. "The End of Corporate Imperialism." Harvard Business Review 76.4 (1998): 69-79.
Rosenau, James N. Distant Proximities: Dynamics Beyond Globalization. Princeton: Princeton University P, 2003.
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