The Impact of Global Dynamics on MNEs
Introduction
Recently globalization has become an extensively researched issue in business science, and there has been accumulated a wide array of literature regarding almost every aspect of it (Karadagli, 2012). Despite various studies, there is no consensus on the effects of globalization on companies, particularly those operating in international markets. According to Collins (2010), the major advantages of globalization that apply to international companies include global economic growth, greater access to resources, free flow of information between countries, and facilitated cooperation between nations that boosts competitiveness through innovation. Collins (2015) further notes that globalization creates conditions for universal justice, since it facilitates the development of poor countries through infusion of foreign capital and technology. In turn, opponents of globalization insist that its positive effects are mitigated by various negatives ones. These include, but are not limited to, the loss of jobs in developed countries, exploitation of resources that belong to developing nations, exploitation of labor, and the emergence of “safety nets” (Collins, 2010; Collins, 2015).
The objective of this paper is to give a clear assessment of globalization through analyzing its impact on multinationals. A range of assessment tools are used to achieve this objective, including PESTLE analysis, Yip’s Globalization Drivers, and Porter’s Diamond Determinants of National Advantage. When citing a range of multinationals, the paper aims to prove that assessing globalization as effective or ineffective trend is an erroneous strategy, given the inevitability and fast pace of the process. Instead, it is more reasonable to approach business strategies that would help multinationals to benefit from globalization, while mitigating its limitations. BackgroundTo substantiate the discussion, it is required to define globalization and to assess business environment where international companies are operating. Approaching the former issue Al-Rodhan (2006) notes that having a working definition is “anything but easy” (p. 2) Irani & Noruzi (2011) attributes it to the existence of streams and looks on globalization. In turn, Reich (1998) suggests approaching the definition of globalization through debunking the most commonly cited myths. One of such myths has been exposed by Rosenau (1996) noting that, Globalization is not the same as globalism, which points to aspirations for an end state of affairs wherein values are shared by or pertinent to all of the world’s five billion people, their environment, their roles as citizens, consumers or producers with an interest in collective action designed to solve common problems.
Nor is it universalism – values which embrace all humanities, hypothetically or actually (pp. 247-262).In his paper What Is Globalization? Reich (1998) points out that in addition to myths, some experts are tempted to approach globalization too broadly, which eventually results in definitions that “offer limited heuristic insights and little operational value” (p. 5). Such definition is for instance found in Gerny (1995) suggesting that globalization is “a set of economic and political structures and processes deriving from the changing character of goods and assets that comprise the base of the international political economy …
