|Type of paper:
|Globalization Software International business
The current trends in rapid expansion and an increase in technological advancements have facilitated the growth in international business. As a result, the companies have expanded the transactions to other countries as a way of enhancing their market shares, acquisition of more resources, increasing diversity in the sales and supplies as well reduction of the competitive risk. International business is a term that is used to refer to all the business transactions that entail governmental and private investments, sales, transport and logistics that is conducted between two or more nations, regions or continents beyond their political limits (Kolk & Van Tulder, 2010). The international business has had several complex and controversial impacts, majorly being the Globalization of companies.
Globalization consists of rapid cooperation and integration of the distinct national and regional economies and cultures through the worldwide network of trade, immigration, transport, and communication. The concept of Globalization has been a rapidly growing trend that has depicted the increase in interconnection and interdependence among people and nations. The idea of Globalisation in its wide sense can be said to be a complex, prismatic and multidisciplinary point. It tends to be inspected from a few edges which incorporate monetarily, the most well-known perspective, yet besides cultural, social, ideological and political ones. Globalization has had both positive critics of being a tool for modernization as well as negatively as a mortal threat and risk. Although Globalization has been effective in the rapid interactions, movement and exchange of people, information, technology, good and services across the globe, it has also been faulted for some negative impacts it has necessitated. This paper is objected at discussing the impacts and benefits of Globalisation of a medium-sized company producing Software Company.
Advantages of Globalization
The globalisation of a company producing Software Company has effected the creation of a global market. It would encourage the facilitation of the specialization of the software company to offer services in the local market. Every country has its unique product that it produces, and the majority of the nations are not self-sufficient. Globalisation has enabled the country to access the raw materials for software products from other developed economies. Global integration has effected the convenient way of sourcing raw materials; therefore, the Software company can produce internet services at a lower price hence maximizing the profit. For instance, the company can depend on Google, an American based company, for hosting the software on the internet. Similarly, it can rely on other social media platforms such as Facebook, which are based in America (Meyer & Peng, 2016). The creation of the global market for both the raw materials and finished product for the organization would ensure more returns for the company. The creation of the global market for the company also facilitates the economic growth of the country where the raw materials are sourced as well as the UK. The concept of the global market as provided by the Globalisation of the company, would enable the acquisition of other companies in other, partnership and company merger in other developing nations hence reach a wider market. Therefore, the Globalisation of the company would result in the creation of a global market that would facilitate more returns.
Competition is one of the benefits that is facilitated by the Globalization of any company. It is a healthy way of conducting business in all industry since it encourages innovation in trade across the border. Globalisation encourages competition among business, hence would pose a challenge to the software producing company to increase its product quality as well as moderate on its prices. Through world market regulation authorities, the market of the products of the company is regulated hence shield the company against any unhealthy competition. The competition that is created by Globalisation would ensure that the organization produces products that match international standards to compete effectively with other products across the globe. The increased competition encourages global creativity and innovation in the company as it strives to stand out as unique. The increased competition that is brought about by striving of the company to maintain a step ahead of the competitors. The drive-in aim to be the best results in improved quality and prices. Therefore competition, as facilitated by the Globalisation, may result in the improved cost of products and quality.
The Globalization of the company may contribute to ease of access to the foreign culture of other people. The global connection will not only facilitate the free movement of people and the products to different nations, but it will also facilitate the movement of information and innovation. Similarly, there will be a transfer of technology from the UK to other undeveloped nations. Globalization has also facilitated the exchange of cultures among companies (Azmi, 2006). As a result, the software company is likely to be flexible as it expands its business activities in other nations. The interaction with other people from different cultures may contribute positively to the value addition through the introduction of new ways of doing things. A steady requirement for innovations shows up because of the absence of quick information transfer and open correspondence. Loads of designers have attempted to serve the necessities of present-day society by improving innovation. Its progression has made ready for beneficial outcomes of Globalisation in nations that at first would not like to connect with others. Such states select accomplices for participation, relying upon religion instead of the economy. Nonetheless, Globalisation of any company enables the exchange of cultures among different people and nations.
The Software Company's Globalization would contribute effectively to the reduction of the disparity between the poor and the rich people. Globalisation would contribute to the creation of job mobility would enable the majority of the people to have access to work opportunities without limitation of their nation's boundaries. The developing nations, such as African countries, would have an opportunity to have access to great improvement in technologies; therefore, apply the technology to improve their living standards. More so, the company would have access to a bigger pool of labour with the Globalisation (World Commission on the Social Dimension of Globalisation, 2004).
Disadvantages of Globalization
The globalization of the Software Company, on the other hand, would present immense side effects. One of the negative impacts is that it would contribute to the development of a new political system. Being a software company, its Globalization would present a threat of being involved in other nation's politics and the social way of life hence spark disagreement and war among nations. The people and associations who spend the most to campaign lawmakers would get the most obvious opportunity with regards to having their necessities met first. Billions are spent in America's election of late to impact enactment and policy to become favourable toward explicit results. This issue would mean a worldwide economy, where just the most extravagant and most persuasive would impact laws that would affect everybody. The Globalisation of other software companies has been faulted and criticized for manipulating other nation's activities such as rigging in elections. Therefore Globalisation has an effect through threatening to influence the existing cultural and political activities of a country (Negrea, 2012).
The software company's Globalization may have an effect on other developing economies. The free trade that is accompanied by Globalization disadvantages more the under-developed countries. As a medium-sized company, the organization should be shielded from free trade for it to grow. Nonetheless, the software company's Globalisation is likely to affect the infant industry in other nations, especially where the tariff protection measures have not been implemented. Globalization would result from trading imbalances. In countries where huge trade surpluses are run, they would create tensions and pressure resulting in the introduction of shielding policies like control of imports through taxes on online products. In case the software products are substandard, the undeveloped countries are likely to be disadvantaged as they would experience dumping in their countries. The under-developed countries are likely to be provided with software products of lower quality; hence Globalisation has significant effects on the other developing economies.
The globalisation of the software company may result in competition and avoidance of taxes. This has a significant effect in the UK, as a nation as the company would prefer to invest in nations that have low taxes rates. For instance, the company may prefer to set up offices in nations where the tax rate policies are low compared to the UK, hence channel their profits through the subsidiaries. This would imply that the company would pay low corporate tax where they conduct most of the transactions (Calitoiu, 2011). On the other hand, there are nations where the tax rates on the software industry are incredibly high; hence the company is likely to yield low profitability. As a result, the company will most likely be unable to meet the cost of operation, hence be discouraged. This indicates that the corporate tax levied on the companies has a cutting edge impact on both the company and the government imposing the taxes. The taxes levied by the government, however, have a significant effect on the profitability of the organization.
The Globalisation of the company is likely to cause the loss of the company culture. This is because of the cultural diversity that is availed by the different nations. Hence the company may lose its culture as it attempts to adopt the culture of the hosting nations. Similarly, as a software company, it is likely to fall victim to terrorism traps. The current trends in terrorism have seen in that terrorist acts have been extended to online wars through malware and viruses. The creation of weapons through software that can cause a crash and failure to critical machinery has been one of the biggest security threats; as a result, the company is likely to conduct business with the terrorist without their consent hence facilitate cybercrimes intentionally.
Competition is likely to increase with the Globalisation of the software company. As a result, as the company increases its activities to reach other nations, it equally faces the equal opportunity of being wiped out of the market. As a way of countering the expected competition, the company is likely to expedite more resources as a way of marketing and product promotion. With a bigger market, the company is exposed to stiffer competition especially from the developed multinational software producing companies; hence Globalisation presents the risk of being forced out of the market if the company does not initiate the right methods to mitigate the stiff competition that it is likely to face (Yaprak, Xu & Cavusgil, 2011).
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