International business environment Essay Example | Topics and Well Written Essays - 2750 words

International business environment - Essay Example The paper describes the process of globalization that results in mutual satisfaction of international economic relations as man-made and natural barriers fall. The process itself may have positive as well as negative effects on country's economy. The process grew strength in the early 19990s. Globalization offer opportunities that entail effective resource allocation and so higher per capita incomes. Faster integration to the system can be promoted by new methods and ways of production driven by change in technology. Globalization has made it easier to divide production into several sub-processes, so labor-intensive sections of the production process could be gotten from abroad. This atomization made international trade in intermediate goods a growing substantial feature of international trade. The rapid change in international demand and supply conditions has besides bringing economies together, made relations more composite. Another issue that has made international trade complex i s the weight of the upcoming markets in the world economy has become substantially more prominent. Although globalization entails various dimensions, it usually refers to economic ties and processes. Economic globalization pertains the expansion of production, consumption, trade, savings, and investment made to markets beyond regional and national ones. For countries that are developing, the risk of growing inequality linked with active participation in the global economy attributed to institutional weaknesses relating to being poor. (Prasad 2003, p.4). This paper tries to bring out a fair view of globalization; pointing out the benefits and risks that globalization has for countries that are developing. The paper looks at the evidence and controversies that can be used against and in favor of globalization and also the policy options and prospects. It also tries to assist Palomia by looking at its economy and reporting the risks and benefits of globalization. Gains from globalizati on Benefits from Globalization can lead to advances, in efficiency and gains, in economic wellbeing. Trade improves division of labor as countries that specialize in a given field gains comparative advantage over the rest. This is a very vital part of economic empowerment as a country like Palomia may have the advantage on something over the others. Deeper relationships and penetration of international markets will enable and encourage and motivate consumers and producers to reap the benefits of economies of scale. The competitive international market will also reduce profits of monopolies. This incentivizes businesses to seek innovations that are cost efficient and advances what they sell. Gains in efficiency also should bring advancement in economic growth and so resulting in higher per capita incomes. This could be good prospects for developing nations as it is able to make more money to stir more growth. Globalization also has assisted many poor countries in the world achieve hi gher growth rates and minimize the number of citizens living in absolute poverty. For consumers, globalization or international trade expands the range of good services available. The rate at which goods and services get innovated is also encouraging making the trade dynamic. The participation of countries that are still developing in the process of globalization can allow them better apply their comparative advantages. This making them bring in advanced technologies, management experience and foreign capital. It is also prosperous for eliminating monopolistic characteristics and toughening market competition (Bigman 2002, p.10). Risks involved in globalization While providing more growth opportunities for countries that are still growing, the globalization process also poses enormous risks. To begin with, economic globalization has indeed expanded instead of reducing the