Globalisation refers to the trend for people, firms and governments around the world to become increasingly dependent on and integrated with each other.
According to Mittelman ?Globalization refers to the process of reducing barriers between countries and encouraging closer economic, political, and social interaction? (Mittelman:2000:5). On the other hand the International Trade Monetary Fund describes globalisation as ' the growing economical independence of countries worldwide through the increasing volume and variety of cross border transactions in goods and services and international capital flows, and also through the more rapid and widespread diffusion of technology', Osland, 2003.
Globalisation is itself a broad concept, which resulted in integration of political, economical, cultural, and technological environments of nations. The deep impact is evident of globalisation on the economy of different countries. The globalised economy is with the eliminated borders of individual nations. It may bring new opportunities for the developing countries in terms of access to global market, transfer of technology from developed countries and increased efficiency but it also has political, social and economical affects on these countries.
Impact of globalization on business environment in Unites States of America:
The globalised economy brought a huge impact on the business environment in all over the world and on United States of America as well. American economy gets the huge benifits from the globalisation and it pays cost as well. Now the study dicuss the pros and corns of globalisation on American economy, in respect to its political, economical, social-culture and technological aspects.
The role of the government is very important in protecting the national interest and managing economy. Demographics experts, such as O? Brien et al (1992) says that globalisation gives limited recognition to international borders because of the fact that the country is irrelevant when it comes to global activities. The key issue that arises from globalisation debate is, whether it threatens the national sovereignty, and who governs the Multinational Enterprises (MNEs) and the global market.
There is no doubt that unitated states of America have a unique position in economy of world because of its size and political stability. According to Griffen and Pustay (2007) the foreign investment crosses the figure of $1.6 trillion in U.S., due to political stability. The political stability plays the major role to attract the foreign investors.
One of the example is BP, which invested in oil sector $ 107,000 million. (www... 1)
One side th is free trade helps the economy, but on the other side this trades policies negatively impacts the local investors. The economy generates the revenue from free trade, e.g. the companies like Dell, Siemens, and Wall-mart generates millions of revenue, forced short domestic firms which were also the huge sector of the economy, out of the business.
The development and transfer of technology has been a part of inter-dependence and economic relations amongst developing countries. Hill 2005 narrated the role of technological change in economy as the technological change made reality the globalisation of markets and production. After World War 2, their came major changes in communication, information processing and transportation technology, including the explosive emergence of the internet the World Wide Web.
The value of web based transactions hit $657 billion in 2000 with the united states accounting for 47 percent of all web based transactions (Hill,2005).
American companies have migrated most of their manufacturing jobs to foreign countries where it is cheaper to do business. Furthermore, service and technical jobs are currently undergoing a large exodus to foreign labour too. This is now called outsourcing. According to Phil, in greater numbers, Americans with college degrees are unable to find work, while the same degrees in other countries are in demand. For example Dell shifts its some of its operation towards India, which helps the company in terms of low pays of labour, but it also shrinks the American job market.
This is evident that American economy gets the most benefits from globalisation that has height GDP in the world. Due to globalised economy the business in America increases and help to build its economy, but on the other, the economist blames the globalisation to the biggest challenges which are facing by the American economy which are unemployment and out sourcing.
Economic driven factors are probably the most important forces behind globalisation. O? Brien et al 2000 describes the economic globalisation as a set of processes through which the major economic activities such as production and consumption activities shift from local or national scale to the global scale. The main indicators of economic globalisation include the major increase in international trade.
At once the globalisation also named as Americanization, due to its huge participation in world trade.
One of the American companies which get the benefits from free trade is Wal-mart. Wal-mart giving the lowest price products to its customers, and has the labour force more than American army. The secret of the selling low price products is free trade, Wal Mart has expanded rapidly and has reported a sale of $218 billion. Due to outsourcing it has been successful in reducing its operating costs, which is passed to consumer with everyday low prices. (Hill,2005). Another example is of Starbucks that has been able to hit the profit to sales of $2.4 billion and revenue of $159.5 million in 2007. (Ghauri & Cateora,2006).
Companies like these get the huge benefits and which definitely helps the American economy.
But on the other hand the globalisation affects the American economy negatively. One of the effects is outsourcing, which has result in the loss of American jobs without sufficient remedies to provide workers with further employment opportunities. Frank LaGrotta, wrote on the issue of jobs lost to foreign competition. When a steel company left a property vacant in Pennsylvania, LaGrotta states, 'We found a lamp manufacturer to move into the empty building. The new lamp-makers didn't pay as well as the old steel-makers, but 600 jobs were, well, 600 jobs. I say was because those lamps are now made in China.'
Although the American economy once conquer the world, due to globalised economy of world, but its economy is now suffering from recession and paying the cost of globalisation.
Globalisation is brining different cultures and breaking social barriers and in the process creating a mono-culture. The culture of rich, famous and powerful is the new culture of the world. Young boys in Africa wearing American branded t-shirts or MTV culture spreading around the world are some of the examples. Levitt (1983), believed that different cultural preferences and standards, and business institutions are vestiges of the past. According to him some cultural inheritance gradually fade away and the rest expand into global preferences. For example the availability of Chinese food in most of the world countries, pita bread, country and western music, pizza and jazz are few things available worldwide. Over the course of history cultures have influenced each other in numerous ways but never before the cultural synchronisation have been at such an unprecedented rate.
Dimensions of organisational culture
Deal and Kennedy (1982) acknowledged four key dimensions of culture. According to them organizational culture can be best described by identifying values, heroes, rituals & rites and culture network.
• Values: Values are the beliefs that lie at the heart of the corporate culture.
• Heroes: Heroes are the people who represent values.
• Rites and rituals: These are the customs of interaction that have strong symbolic qualities.
• The culture network: It is the informal communication system or unseen hierarchy of power in the organization (Deal and Kennedy, 1982).
LaGrotta, Frank. 'Outsourcing Contributes to Poverty in America.' At Issue: Does Outsourcing Harm America? Ed. Katherine Read Dunbar. Detroit: Greenhaven Press, 2006.