Domestic Businesses and Global Market

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Table of Contents

Introduction
Types of Business Environments
Example Organizations
Benefits of Expansion
Ethical Considerations
Conclusion
Reference

Introduction

The main feature of the modern world economy is globalization, which has a decisive impact on global business development. This article analyzes various aspects of globalization that are characteristic of business both within the country and abroad. It also reflects the main differences in the processes of doing business, touches on ethical problems that may arise.

Types of Business Environments

Domestic business is defined as existing restrictions; international business is not limited and goes beyond the country. Local businesses facilitate limited exchanges between people in a given country, while international companies operate in many countries (Djelic, 2018). Meanwhile, domestic enterprises do not perceive too many warnings or strict requirements for product quality (Thorbecke, 2019). International companies must maintain very high-quality standards of the products or services offered.

Example Organizations

Google’s parent firm, Alphabet, acquired its Delaware incorporation registration and is registered as a foreign entity in California. When compared to, for instance, Huawei, a Chinese technology company, Alphabet is a decidedly domestic organization (Djelic, 2018). A domestic corporation is one that operates entirely inside its native nation. On the other hand, international organizations such as Huawei cover multiple countries, which is why such businesses are regulated depending on the states in which the entity operates.

Benefits of Expansion

Entering the foreign opens up almost limitless opportunities for business development. An example that is relevant is how the oil production in Saudi Arabia, a country with significant reserves, can supply the demand of multiple countries and affect the pricing of the oil worldwide (Thorbecke, 2019). The development of new markets makes it possible to significantly increase sales volumes and regulate seasonal fluctuations (Djelic, 2018). Another advantage is the increase in the currency resources of the exporting company.

Ethical Considerations

Even when a corporation meets all local legal standards, wages and working conditions in other countries are typically lower than those in the United States. If a company recruits people there, they must decide what wage and working conditions are appropriate (Djelic, 2018). Thus, the appropriate way is to develop corporate rules while integrating into the local economy.

Conclusion

Globalization is a new qualitative level of internationalization that covers all spheres of modern society: production, exchange, distribution, consumption, social, political, and cultural relations, developing them in breadth and depth. It is worth noting that as a result of globalization, supranational forms of industrial relations are being created.

Reference

Djelic, M. L. (2018). Globalization and business regulation.Annual Review of Sociology, 44, 123–143. Web.

Thorbecke, C. (2019). Supply, demand and geopolitical tensions: How oil prices rise. ABC News. Web.

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