Risk Assessment for Organizations

Module 1 Assignment3 Amber VanHausen

Globalization

Amber VanHausen

Argosy University

Globalization is a process which involves the reduction of cultural and trade boundaries all over the world. It is a process which is rather unstoppable in nature and is inclined towards increased interaction among people all over the world. This increased interaction leads to a lot of potential and opportunities in the world of commerce. As such, corporate executives have a lot at stake with regard to the issue of globalization. The implied reasoning is that there are several challenges as well as opportunities which an executive might face as a result of globalization

One challenge that an executive might face is the mitigation of risks. This is due to the fact that globalization might prompt executives to expand their business operations. These expansions are likely to see the executives venture into foreign countries. This brings about the risk of loss. The premise here is that the executive in question will be expanding their business to a new territory.

There is always the risk that this new territory might not conform to the expectations of this executive. As such, there is a huge potential for losses in such a scenario. However, this is a risk which can be overcome (Gerdes, 2010, p.88). The executive needs to carry out extensive feasibility studies before expanding their business to a foreign country. This will ensure that the executive is better informed and is therefore in a better position to make more accurate predictions based on the expectations of the expansion.

Another challenge that executives face due to globalization is increased competition. In the business world the portion of the market share that a business controls is very important. Globalization leads to an increase in the number of players in the business sector. The result of this is an increase in the selection base of the consumers. This is specially a challenge for executives who are faced with new players who offer services that are considered to be superior or cheaper. This might result in the executive losing a lot of business.

This challenge is, however, controllable from the point of view of the executives in question. First of all, the executives have to realize and in deed accept the fact that competition is inevitable. As such, a more prudent move is to ensure that the services they offer give them a competitive edge. This can be achieved through constant improvement of services and better relations with their customers.

In the next five years an international executive has to deal with the fact that labor laws differ from country to country. There are also aspects such as holiday with each country having its own unique set of them. This can be a challenge to an executive expanding operations to foreign countries. However, this challenge can be overcome by carrying out extensive research and ensuring compliance with the law before expanding operations to any foreign country.

There are also opportunities presented to executives as a result of globalization. Over the next five years an executive with a global point of view has the potential to expand their business exponentially. This is especially with reference to areas where such businesses are needed but lacking. As such, the next five years can see executives expanding their businesses to new areas and in the process give their business a more global outreach.

Over the next five years, globalization presents the opportunity for executives to increase their knowledge and technological base. This can be achieved through taping such potential from foreign parts of the world. Executives can tap the technological potential that exists all over the world. This is very important due to the fact that technology is one of the key driving forces for the business community all over the world. Another opportunity that presents itself to an executive as a result of globalization is the opportunity of more specialization and application of their business practices on a global scale (Sjursen, 2011, p.93). This specialization is likely to give the business executive the critical acclaim they need o to grow their business on a global scale.

There are several economic drivers which might have a profound impact on globalization. One such driver is the trading systems in place and their impact on free trade. It is important to note that international trading systems usually dictate the degree to which businesses expand beyond their parent country borders.

As per the status quo there are several regional blocks which offer free trade. This has led to an expansion of business but on a regional scale. As these policies expand the idea of free trade will be more widespread and the result will be a facilitation of globalization.

The second economic driver which might influence globalization is the expansion of emerging markets. It is a fact that emerging markets are expanding at quite a fast rate. This is with reference to markets especially in third world countries. As these markets expand they create the potential for increased business in their regions. They also position themselves to integrate into the global market. The result of this is the facilitation of globalization at the international level the growth of emerging markets is a good thing for globalization as the potential for commerce increases exponentially as a result.

Technology is yet another economic driver that is very influential when it comes to globalization. Of special interest is the commoditization of technology and the degree to which the world is becoming dependent on aspects of technology. First of all, technology has revolutionized information and communication. As such, it is possible for executives based half way across the world to effectively manage their businesses (Appadurai, 2013, p.27).

The demand for technology is also a key target area for expanding businesses. Thus, technology and globalization are aspects of development which happen to be intertwined. This means that expansions in technology are likely to cause a ripple effect that will see the facilitation and in deed the growth of globalization.

Political environment is also a driver of economies all over the world. This is in light of the fact that politicians happen to be policy makers who make laws on aspects such as trade. Thus, the political environment of a given region is likely to influence the spread of globalization into the region. There are some instances where countries are completely closed politically. These countries happen to remain behind when it comes to globalization.

The political environment of a region dictates the degree of reception with which globalization will be subjected to in the region. If the political environment is hostile, then foreign investors are likely to boycott the region in question and take their business opportunities elsewhere.

References

Appadurai, A. (2013). Globalization. Durham, NC: Duke University Press.

Gerdes, L. I. (2010). Globalization. San Diego, CA: Greenhaven Press.

Sjursen, K. (2011). Globalization. Bronx, NY: H.W. Wilson.

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