EXECUTIVE SUMMARY.

Business management is the act of getting people together to accomplish desired goals and
objectives. Globalization in short, points to the whole effort towards making the world global
community as a one village. Globalization on business management is interconnection of
international markets and managing businesses in a global industry. This includes foreign
investments whereby a company expands its business and invest in foreign countries.

Globalization makes business management easier and efficient for the company.

Based on my research, Globalization simplifies business management in the world. This is due to
the advancement in technology, transport, communication, education, and regulations of trade
that makes trade fair to all parties. This attracts more people to engage in international business
and international trade. Managers within the global face a lot of challenges due to high
competition in the industry, good decisions must be made in order to satisfy and maintain their
customers and attract more customers for their products. Companies enjoy economies of scale
in the business due to reduction of cost in the management.

This report explores a range of interlinking questions, starting with what is globalization, what
are the effects of globalization in developing countries and developed countries, this is in terms
of positive and negative effects. Globalization is something that affects all of us, no matter what
our profession or interest is.

Globalization is a very wide and a very important focus of discussion. I spent time researching
what it is and the effects it has in developed countries and developing countries. So in this
report I will define what globalization is and the effects according based on my research.
Globalization despite having benefits to the world, it also has a negative effects of it.

INTRODUCTION.
Globalization in short, points to the whole effort towards making the world global community as
a one village. Goods that were only found in western countries can now be found across the
globe. Now under developed areas can enjoy the benefits of scientific advances and industrial
progress available in developed countries for the improvement and growth of their areas.

Because of globalization the economies of the world are being increasingly integrated, example
mobile phones and internet have brought people closer. The world is becoming a smaller place.
Work can be outsourced to any part of the world that has an internet connection because of
improvements in traffic infrastructure one is able to reach one's destination in a short time.

Globalization can also be defined as an ongoing process by which regional economies, societies
and cultures have become integrated through a globe-spanning network of communication and
trade. The process of globalization includes a number of factors which are rapid technology
developments that make global communications possible, political developments such as the
fall of communism, and transportation developments that make traveling faster and more
frequent. These produce greater development opportunities for companies with the opening up
of additional markets, allow greater customer harmonization as a result of the increase in shared
cultural values, and provide a superior competitive position with lower operating costs in other
countries and access to new raw materials, resources, and investment opportunities.

Globalization through global communications, global markets and global production have
promoted and facilitated by a fourth area of global activity in relation to money. For example,
the American dollar, the Japanese yen, Euro and other major national currencies circulate
globally. They are being used anywhere on earth and moving electronically and via air transport
anywhere in effectively no time. Most bankcards can extract cash in local currency from the
thousands of automated teller machines (ATMs) across the world. Also credit cards like Visa,
MasterCard and American Express can be used for payments in almost every country in the
globe (Scholte J.A., 2000).

People can move from one country to another, trade restrictions are reducing, domestic markets
are opening up for foreign investments, telecommunications are better established and the
countries that are leading the innovations are passing on their technologies to other countries in
need (Kulkami A., 2009).

EFFECTS OF GLOBALIZATION ON BUSINESS MANAGEMENT

IN DEVELOPED COUNTRIES.
Globalization has brought benefits in developed countries as well as negative effects. The
positive effects include a number of factors which are education, trade, technology, competition,
investments and capital flows, employment, culture and organization structure.

POSITIVE EFFECTS

It would be rather difficult to discuss the extent of the positives that globalization has had on
the world at large. But still, here are some of the positive effects of globalization and the positive
impacts they have had on so many demographic segments of society.

Global market.

Most successful emerging markets in developed countries are a result of privatization of state
owned industries. In order for these industries to increase consumer demand many of them are
attempting to expand and extend their value chain to an international level. The impact of
globalization on business management is seen by the sudden increase of number of
transactions across the borders. In protecting yields and maintaining competitiveness,
businesses are continuing to develop a wide range of their footprint as it lowers cost and enjoys
economies of scale (Shah A.,2009)

Multinational corporations is a result of globalization. They occupy a central role within the
process of globalization as evidenced through global foreign direct investment inflows. Their
concentrations within Europe in western economies has led to size constraints, therefore there is
a need for new geographical areas to operate whereby they will face a lot of competition in the
market. Through this they will enlarge their market and enjoy economies of scale as
globalization facilitates time space compression, economies compete at all levels including that
of attracting investors (Smith V.A and Omar M.,2005).

Cross-cultural management

Globalization tend to be the realm of elite because in many parts of the world they are the only
people who are affluent enough to buy many of the products available in the global
marketplace. Highly educated and wealthy people from different backgrounds interact within a
westernized milieu. Western styles, since are symbols of affluence and power, the elite often
embraces western styles of products and pattern of behavior in order to impress others. Today
Western culture and patterns of behavior and language are staples of international business
(Asgary N. and Walle A.H.,2002).

United states seems to have powerful impact upon many other countries and societies. The
world today has a popular cultural force. The popular consumer culture of the economically
dominant West is relentlessly and inevitably transforming other regions, cultures, nations and
societies. In addition, such perspective imply that technological change, mass media, and
consumer oriented marketing campaigns work in tandem to remake whatever they touch in
their own image. Even attitudes and ideas about society, religion and technology are
transformed by cultural diffusion brought by globalization. Example, in America McDonalds
represent fast, cheap and convenient food while it is not the same worldwide. It's of high price in
other countries like China and Russia where it involves cultural experience (Walle A.H, 2002)

Foreign trade

Globalization has created and expanded foreign trade in the world. Things that were only found
in developed countries can now be found in other countries across the world. People can now
get whatever they want and from any country. Through this developed countries can export
their goods to other countries. Countries do business through international trade, whereby they
import and export goods across the global. These countries which export goods get
comparative advantages. Organizations have been established with a view to control and
regulate the trade activities of the countries in the world so to have fair trade. World trade
organizations emerged as a powerful international organization capable effectively influencing
individual governments to follow international trade rules, copyrights, policies on subsidies,
taxes and tariffs. Nations can not break rules without facing economic consequences (Piaseck R.
and Wolnicki M., 2004) .

The number of nations that are dependent on trade, foreign capital, and the world financial
markets increased greatly. Countries engaged in foreign trade enjoy comparative advantage.
The post Recardian trade theories predicted that specialization in labor and capital intensive
goods would bridge enormous wage gaps between the poor and the rich countries, that is the
developing and developed countries, sparing the latter from massive labor immigration (Gerber
J., 2002).

Resource Imperative

Developed countries need natural and human resources of the developing countries while
developing countries need capital, technology and brainpower of the wealthier countries.
Developed countries' economies are increasingly dependent on the natural and human
resources of the developing nations. Growing interdependence of nations and their activities on
one another fostered by the depletion of natural resources; as well as overpopulation (Harris
P.R.,2002).

Foreign investment

One of the most visible positive effects of globalization in India is the flow of foreign capital. A
lot of companies have directly invested in India, by starting production units in India, but what
we also need to see is the amount of Foreign Investment Inflow that flows into the developing
countries. Indian companies which have been performing well, both in India and off the shores,
will attract a lot of foreign investment, and thus pushes up the reserve of foreign exchange
available in India. This is also one of the positive effects of globalization in US and other
developed countries as developing countries give them a good investment proposition.

Managers' objectives might not be the same with those of stockholders in some situations. The
more complex the corporation the more difficult it is for shareholders to monitor management's
actions whereby it provides the managers more freedom to act in their own self interest at the
expense of shareholders. Multinational firms are more complex than national firms. Managers
might favor international diversification because it reduces firm specific risk or adds to their
prestige. These goals might be of little interest to shareholders. This divergence of interests
between shareholders and managers, might reduce the value of multinationals relative to
domestic firms (Saudagaran S.M.,2002)

Competition

One of the most visible positive effects of globalization is the improved quality of products due
to globe competition. Customer service and the 'customer is the king' approaches to production
have led to improved quality of products and services. As the domestic companies have to fight
out foreign competition, they are compelled to raise their standards and customer satisfaction
levels in order to survive in the market. Besides, when a global brand enters a new country, it
comes in riding on some goodwill, which it has to live up to. This creates competition in the
market and a survival of the fittest situation.

Culture

The positive effects of globalization on culture are many! Not all good practices were born in
one civilization. The world that we live in today is a result of several cultures coming together.
People of one culture, if receptive, tend to see the flaws in their culture and pick up the culture
which is more correct or in tune with the times. Societies have become larger as they have
welcomed people of other civilizations and backgrounds and created a whole new culture of
their own. Cooking styles, languages and customs have spread all due to globalization. The
same can be said about movies, musical styles and other art forms. They too have moved from
one country to another, leaving an impression on a culture which has adopted them.

Legal Effects

Increased media coverage draws the attention of the world to human rights violations. This
leads to improvement in human rights. Global economic growth does not necessarily make
people happier, worldwide free trade, should also benefit humanity as well as protect nature,
not just reward managers and stockholders. Those who would be authentic leaders need to
address inequalities. Globalization should promote openness and information along with
exchange with greater democracy and prosperity (Harris P.R., 2002).

Gone are the days where the limited jurisdiction became a hindrance in the prosecution of
criminals. These days due to international courts of justice, these criminals can no longer seek
asylum in a foreign country, but will be brought forward and there will be justice. Due to
globalization, there is also an understanding between the security agencies and the police of
two or more different countries who will come together to curbglobal terrorism. Hence, it is now
possible to catch the perpetrators of crime irrespective of which country they choose to hide in.
This is undoubtedly one of the greatest positive effects of globalization on society.

NEGATIVE EFFECTS

Globalization also have its side effects to the developed nations. These include some factors
which are jobs insecurity, fluctuation in prices, terrorism, fluctuation in currency, capital flows
and so on.

JOBS INSECURITY.

In developed countries people have jobs insecurity. People are losing their jobs. Developed
nations have outsourced manufacturing and white collar jobs. That means less jobs for their
people. This is because the manufacturing work is outsourced to countries where the costs of
manufacturing goods and wages are lower than in their countries. They have outsourced to
developing countries like China and India. Most people like accountants, programmers, editors
and scientists have lost jobs due to outsourcing to cheaper locations like India.

Globalization has led to exploitation of labor. Safety standards are ignored to produce cheap
goods. "In practice, however, the recent experience in Latin America has been that many such
open-handed multinationals moved their operations to, for example, China or South East Asia
because of cost and market considerations"(Piasecki R. and Wolnicki M., 2004).

FLUCTUATION IN PRICES.

Globalization has led to fluctuation in price. Due to increase in competition, developed countries
are forced to lower down their prices for their products, this is because other countries like
China produce goods at a lower cost that makes goods to be cheaper than the ones produced
in developed countries. So, in order for the developed countries to maintain their customers
they are forced to reduce prices of their goods. This is a disadvantage to them because it
reduces the ability to sustain social welfare in their countries.

EFFECTS OF GLOBALIZATION ON BUSINESS MANAGEMENT

IN DEVELOPING COUNTRIES.
POSITIVE EFFECTS.

"I know that globalization has also created many negative effects, but I believe it's always better
to look to the future with optimism and hope. Tomorrow, hopefully, we will be able to minimize
or even eradicate the evil forces that give globalization a bad name. Thus we will be able to
move forward with peace and harmony"(Kulkami A., 2009)

Poverty alleviation

As far as poverty reduction is concerned, globalization played a role in poverty reduction in

developing countries. In deed most developed countries experienced reduction in poverty in the
proportion of their living below the poverty line, including fast developing countries like China,
India, Vietnam. While other countries like Sub-Saharan Africa registered an opposite trend (Lee
E., 2006).

Employment situation.

Through globalization, people from different countries are provided with jobs opportunities
within the global. It has created the concept of outsourcing. Developed countries prefer to
provide work to developing countries where costs are cheap. Work such as customer support,
software development, accounting, marketing and insurance are given to developing countries
like India. Therefore the country that is given the work enjoys by getting jobs. It has given an
opportunity to invest in the emerging markets and tap up the talent which is available there. In
developing countries, there is often a lack of capital which hinders the growth of domestic
companies and hence, employment. In such cases, due to global nature of the businesses,
people of developing countries too can obtain gainful employment opportunities (Pillai P.,2008).

Technology

This is a powerful force that drives the world toward a converging commonality. It has
proletarianized communication, transport, and travel. People from different places everywhere
wants all the things they have heard about, seen, or experienced through technology.
Organizations through its managements can obtain knowledge from different places in the
world that can be used in the organization.

Television and medias played a big role in influencing the perception of the world, from a
relatively small national unity and reality, into a global market and international concerns. As
multinationals establish subsidiaries in new locations, they transfer know how from the parent to
the local operation. Knowledge flows from one unit to another as a whole organization benefits
from development activity. One of the ways that organizations use in knowledge transfer is the
movement of personnel, which takes place within multinationals. This build up a bank of
knowledge about working in different situations with people from different cultures and this
represents a stock of knowledge that could be developed and used to benefit the organization
(Kamoche, 1997).

Education.

Globalization from the point of view has positive effects as well as negative effects. It has
increased the access of higher education example universities and reducing the knowledge gap
in developing countries, it equally has negative aspects which can seriously threaten universities
in those countries. From point of view it has brought more positive effects to developing
countries through increasing access to higher learning institutions. Today you can move in the
search of the best educational facilities in the world including developing countries without any
hindrance. This is due to increased output from secondary schools, greater participation of
women in higher education, a growing private sector demand for graduates, and the exorbitant
costs of acquiring education in foreign countries, especially those in the nort (Mohamedbhai G.,
2002).

Foreign trade

Despite having negative effects of globalization, it has a good side too. One of the most
significant effect it has brought to developing countries is Trade. Before people used to
exchange goods for goods or services for services but now people can trade goods for money.
This is mostly through International trade whereby people exports and imports goods within
countries. Globalization has led to reduction of costs in trade within the globe. It has led to
reduction of tax of importation of goods.

According to economic theory, foreign trade is in principle, beneficial to any country engaged.
The international division of labor allocates the resources more efficient whereby it increases the
economic welfare of all countries engaged in foreign trade in long run (Kaitilia V and Kotilainen
M., 2002).

Foreign investment

Foreign investment is a direct result of globalization. Foreign investment is always welcomed as

it provides resources, capital and technology to a country that will support economic
development of the host country. This improves employment as in direct and indirectly.
Increases exports to a country and thereby improves the current account and therefore will help
to the repayment of foreign debt. This however has some criticisms for leading to too much
foreign control (Kaitilia V and Kotilainen M., 2002).

Developing countries can use general or specific industrial and trade policies to be more or less
welcoming to foreign direct investments, capital and foreign tourist services. They can directly
and indirectly shape their participation in the economic activities in the globe (Piasecki R. and
Wolnicki M., 2004).

Market sector
Globalization of markets in developing countries is growing so fast. The emergence of global
markets for standardized consumer products on a previously unimagined scale of magnitude.
This brought benefits which are economies of scale in production, reduced world prices,
distribution, marketing and management (Levitt T., 1983)

IKEA is one of the company that is growing fast in developed countries. Its market is increasing
within the global. It has become the world's largest home furnishings retailer. The managers are
facing a lot of challenges in managing them (Nanda A., 1990). IKEA can now be found in so
many places in the world example Malaysia.

NEGATIVE EFFECTS

Globalization is a tool that benefits all sections of mankind. We cannot ignore the negative
effects it has in developing world.

Unemployment

Globalization is a blame to world's unemployment situation though it brought some jobs

opportunities. Despite the fact that it brought jobs opportunities to the global but it is still a
blame to the current situation. "It 's true that global economic integration and increased travel
have resulted in increased competitiveness at the national and enterprise levels, forcing
producers to find ways to cut costs, improve efficiency, and raise productivity"(Kigundu
M.N.,2002).

"The most important factor to determine the level of employment during 1980-2000 was
national or regional macroeconomic policies which were implemented and sustained. In
addition those countries with liberal macroeconomic reforms, pursued politics promoting
flexible labor markets and employment practices, decentralized industrial relations systems, and
judicious enforcement of labor. On the other hand, countries with employment laws, regulations,
and policies experienced higher level of employment because they were not able to attract and
retain as many new jobs"(Kiggundu M.N.,2002).

For example ,Indonesia faced unemployment and poverty that grew to levels not experienced in
two decades, health conditions worsened, and the natural environment degraded (Piasecki R
and Wolnicki M.,2004)

Spread of fast foods chain.

Fast foods chain is growing very fast. But some of the most rapid growth is occurring in the
developing countries, where it's real changing the way people eat. "Kentucky Fried Chicken(KFC)
is the largest, fastest growing, and highest potential units" (Bartlett C.,1986).

Most people prefer to buy fast foods because it's cheap and quick. This replaces home cooked
fare enjoyed with family and friends. Traditional diets and recipes are yielding to sodas, burgers,
and other highly processed and standardized items that have a lot of fat, sugar, and salt
resulting a global epidemic of diabetes, obesity, and other chronic diseases. Meanwhile, fast
food producers require farmers to raise uniform fields of crops and herds of livestock for easy
processing, eliminating agricultural diversity.

Western culture.

Globalization has led to the spread of western culture and influence at the expense of local
culture in developing countries like Africa. Most people now in developing countries cop what
people in developed countries do. So, its like they ignore their own culture and practice western
culture ( Goyal K.A., 2006). For example dressing styles and eating habits, language. All these can
affect management in one way or another example it can cause misunderstandings because of
language barrier.

Trade
Average tariff rates continue to be high in many developing countries, including some that have
recently implemented trade reforms. Example,India. Trade policy continues to be an important
aspect in globalization at least in some of the lower income developing countries.

widespread use of computers, faxes and mobile phones, introduction of the internet and e-
commerce, and quicker and cheaper means of transportation in some cases offered
opportunities to developing countries, but in many cases deepened the gap between global
firms and traditional industries globalization opened up new opportunities for developing
countries to create jobs and expand exports. In practice, many developing countries competing
for foreign investors offered longer tax holidays, costly subsidies, and various incentives for
multinationals. The competition among developing nations reduced positive net effects of
globalization or, at best, delayed them.

REFERENCES.
 http://www.oxfamblogs.org/fp2p/?p=1872
 http://www.unescap.org/esid/hds/issues/GlobalizationHealth.pdf
 http://www.un.int/turkey/3.pdf least developed countries
 Lee E,2006.....Poverty Alleviation, from http://ftp.iza.org/dp1925.pdf ILO,GENEVA
 (Foreign trade) How does globalization affect developing countries economically, article
3/2002 from http://www.etla.fi/files/918_FES_02_3_developing_countries.pdf
 FOREIGN INVESTMENT, from
http://www.etla.fi/files/918_FES_02_3_developing_countries.pdf
 Impacts of globalization from www.emeraldinsight.com
 Does globalization affect growth? http://129.3.20.41/eps/dev/papers/0210/0210004.pdf
 http://www.oit.org/wcmsp5/groups/public/---dgreports/---
integration/documents/publication/wcms_079177.pdf
 http://books.google.com/books?q=effects+of+globalization&btnG=Search+Books
 Effects of financial globalization on developing countries by Eswar S. Prasad, Kenneth
Rogoff, Shang-Jin Wei, and M.Ayhan Kose, International Monetary Fund, Washington
DC,2003 from
http://books.google.com/books?id=eBcFQ3DUcQEC&printsec=frontcover&dq=effects+
of+globalization&cd=1#v=onepage&q=&f=false
 Global Employment situation, Managing globalization on developing countries, by
Moses N. Kiggundu,2002 ....United States Of America from
http://books.google.com/books?id=OejvLdnW-
oMC&pg=PA293&dq=effects+of+globalization+on+developing+countries&cd=2#v=on
epage&q=effects%20of%20globalization%20on%20developing%20countries&f=false
 http://books.google.com/books?id=BU9sU7sG3DoC&pg=PA131&dq=effects+of+global
ization+on+developing+countries&lr=&cd=12#v=onepage&q=effects%20of%20globali
zation%20on%20developing%20countries&f=false
 Managing globalization on developing countries, by Moses N. Kiggundu ,2002 ....United
States Of America from http://books.google.com/books?id=OejvLdnW-
 oMC&pg=PA293&dq=effects+of+globalization+on+developing+countries&cd=2#v=on
epage&q=effects%20of%20globalization%20on%20developing%20countries&f=false
 Effects of globalization in Latin American countries
http://books.google.com/books?id=ilL3tOo8My0C&pg=PA139&dq=effects+of+globaliz
ation+on+developing+countries&cd=3#v=onepage&q=effects%20of%20globalization
%20on%20developing%20countries&f=false
 Jobs opportuinities in devpng countries,by Prabhakar Pillai,2008,
http://www.buzzle.com/articles/negative-effects-of-globalization.html
 Positive effects of globalization http://www.buzzle.com/articles/positive-effects-of-
globalization.html
 Negative Effects of globalization in developing countries
http://global_india1.tripod.com/negative.htm
 Technology in developing countries from
http://www.freeonlineresearchpapers.com/how-globalization-effects-third
 Effects of globalization, global market in developed countires
http://www.globalissues.org/article/768/global-financial-crisis
 Smith V.A and Omar M.,2005, effects of globalization,
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0540170105.
 Effects of globalization in developing countries,infranstructure from by Smith V.A and
Omar M.,2005 from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0540170105.
 Cross cultural management in developed countries, Nader Asgary and Alf H. Walle,
volume 9, 2002 from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldabstractonlyarticle_pdf_1360090303.
 Foreign Investmet in developed countries,A review of the literature on the market
Valuation of Multinational Firms, by Saudagaran S.M., vol 28 No. 3, 2002 from
www.emeraldinsight.com_Insight_ViewContentServle_contentType=Article&Filename=pu
blished_emeraldabstractonolyarticle_pdf_0090280301.
 Unemployment situation in developing countries, Piasecki R and Wolnicki M.,2004 from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0060310306.
 International Trade in developed countries, Piasecki R and Wolnicki M.,2004 from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0060310306.
 Jobs insecurity in developed countries, the evolution of development economics and
globalization, by Piasecki R. and Wolnicki M.,vol. 31 No.3, 2004 from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0060310306.
 Effects of globalization, Globalization and Its Implications on Universities in developing
countries by Mohamedbhai G.,2002 from
www.emeraldinsight.com_MohamedbhaIGoolam2.pdf
 Effects of globalization in developed countries, developing global organization, by Harris
P.R vol 14 No. 6, 2002 pp 416-425 from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0540140603.
 http://www.indianmba.com/Faculty_Column/FC954/fc954.html
 http://books.google.com/books?id=e2b8TvlNxJ0C&pg=PA41&dq=definition+of+globali
zation&cd=1#v=onepage&q=definition%20of%20globalization&f=false
 Impact of globalization on developing countries by Goyal K.A, Issue 5, 2006 from
http://www.eurojournals.com/IRJFE%206%20goyal.pdf
 Ricardo D.(1911) as cited in Piasecki R. and Wolnicki M., Vol. 31 No. 3, 2004, evolution of
development economics and globalization from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0060310306.
 Kamoche K. (1996) as cited in Kidger P.J., Vol 24 No. 1, 2002 pp.69-85, Management
structure in multinational enterprises Responding to globalization from
www.emeraldinsight.com_Insight_ViewContentServlet_contentType=Article&Filename=_
published_emeraldfulltextarticle_pdf_0190240104.