How Globalization and Large Corporations Affect Small Business - Research Paper Example

How Globalization and Large Corporations Affect Small Business. On the twenty first century, globalization phenomenonit is asserted to be on the increase. With the evidenced continuous human interaction witnessed almost in all sectors of the society, and with inventions and innovations in technology, it has made globalization and market liberalization a reality in the contemporary world. As a result, numerous studies have been conducted to point out the exact effects that in deed globalization and large corporations have impacted especially on business (Sachs 66). It is imperative to note that large corporations more often have had a bigger and stronger financial muscle than small businesses making them enjoy many advantages unlike small business. The purpose of this paper is to show how globalization has impacted positively to small businesses across the globe. According to discussion presented on Business World seminar conducted at London, on June 2012, various points of arguments both pro and against have been presented in relation to the discussion. From the differing point of views and opinion about the issue of globalization, it is noted that most of the people who have gone against it come from the least developed countries or regions (Berberoglu 117). Representatives from East African chamber of commerce stated that because most businesses and industries in their regions are young and unstable, the stiff competition brought about by globalization and large corporations put their industry in the risk of collapsing. The attenders of the Business world seminar pointed that large corporations and businesses such as General Motors enjoy economies of scale and most have the capacity and abilities to use advanced technologies in their production, like assembiln machines that in short time do the work making local industries in their region such as East African Motors be at a disadvantage. East African Motors is at a disadvantage since all the assembling of spare aparts at its company is done manually. This in turn has made large corporations such as General Motors to be efficient and effective making it hard for small businesses to compete fairly in a neutral platform. The small business are finding it hard since they don’t have the capacity to match the production abilities of big businesses. In a different but similar business event held at Sao Paolo, Brazil, organized and funded by Forbes early 2013, representatives from Brazil Trade unions also pointed out that large corporations such the coca- cola company has the ability and financial capacity to buy the small businesses and therefore the threat of monopoly is real. Fluminense de Refrigerantes is a bottling company in Brazil that Coca Cola bought. This was in relation to a local beverage industry that was under threat. With monopoly, scholars and experts as were noted in a One Young World: The future of Business Leadership article that such corporations might exploit consumers when competition is eliminated (Global Economics 13). Microsoft is an example of a company that was exploiting consumers due to its monopoly at the PC operating system market. Contributors in the article such as Ariel Schwartz further argued that with globalization, it has expanded markets and in turn increased demand. Such large corporations therefore further enjoy economy of scale making their goods and services relatively cheap unlike small businesses as is presented in Globalization and Localization Association newsletter website. A good example of a wal mart is the trade on general motors parts. Most of the spare parts are cheaply impoted from China to America. The Chinese manufactures sell their goods cheaply since they are cheaply made. However, Sir Richard Branson of Virgin Atlantic, stated in his speech at the Young Leader’s Forum conducted in New York State, in October 2013, argued and reasoned on the contrary and categorically stated that globalization and large corporations is the way forward for business in global context (Parker 82). The Sturbacks Company is an example of a company that sees the way to the future is through big coorporate business. The sturbacks company began as single coffee joint but eventually went into big corporate business. Today Sturbacks has outlets in over 119 countries. In the same forum that was conducted in New York in October 2013, most leaders who spoke asserted that the increased competition brought about by globalization and large corporations have made it possible for consumers to enjoy in terms of high quality of goods and services offered as well as fair pricing. Research done by World Bank and IMF affirmed that globalization has increased quality of life since consumers have been able to save money, use for other needs and get value for their money. The report further elaborated that those against globalization and large corporations have been beneficiaries of monopoly such as Malaysian Sugar Sector have exploited consumers for a long period when the concept and ideology of globalization had not gained ground. Sugar prices in the country are three times high and are controlled by few individuals. Jobs and employment created by the large corporations that have expanded in the new markets are stated as other benefits. Forbes weekly business and financial news elaborate that even large corporations that exist today started as small businesses and they expanded and grew, therefore, small businesses today have no any reason whatsoever to argue against (Dunning 47). The McDonald cooporation is an example of a company that started as a small business venture. The cooporation began as a solo fast food joint to a multi billion cooperation. Another company that falls into the similar category is the DHL international. This company has offices in nearly every country around the globe. Research conducted by The Economist, a financial analyst firm challenged small businesses to emulate large corporations that grew and expanded to be bigger. Part of recommendations noted in the report stated that there should be no blanket condemnation against large corporations and globalization concept. As a further support on globalization, FORTUNE on CNNMoney, in listing top 100 fastest growing companies elaborated and pointed out certain specific small businesses that have realized higher returns and profits that in some situations have surpassed large corporations such as Silver Wheaton whose earnings grew by 340% in the year 2012. The board of the company attributed that to good leadership and competencies in management of the businesses and professionalism (Global Economics 18). Aside from all stated points, liberalization of financial institutions that support businesses to expand and grow in the world presently in noted to be on the increase according to statistics released by World Bank, therefore small businesses can expand and go global because all resources and facilities are available. The resources include mineral deposits and labor, the facilities includes rodes and power supply. However, it is noted that global institutions such as World Trade Organization (WTO) have been put up that try to help both small and large corporations and businesses to grow and develop, while at the same time address issues raised as challenges. In some instances, small businesses have been given immune and time to expand and up their game to compete with large corporations such as cotton industry Haiti. The cotton industry in Haiti has been given the immune from unfair competition coming from corporations outside the country that export cheap cotton to Haiti (Wickramanayake & Anil 45). Monsanto Company is an example of a company that falls in that category. As a result, in some places and regions, large corporations are not allowed to operate fully and freely in such markets. Monsanto Company is an example of a company that has operational restrictions inorder to give rising businesses space to grow. Restrictions and regulations have been placed in some circumstances and certain specific products from small businesses have been given priority (Wickramanayake & Anil 51). The company deals with cotton products and has restriction that it can only sell a certain amount of cotton to Haiti. Such kind of measures is intended to bring fair competition and ensure both parties gain and compete fairly. In the US, a few legislatures in the congress had opposed globalization and market liberalization specifically from China industry because of cheap and low quality goods that penetrate their markets and put their industries at risk of collapse. Research has indicated that there has been a lot of consideration for and against globalization but the benefits realized because of globalization has outweighed the drawbacks and benefit in business (Hill 76). Summary There is a frenzied debate about the factual effects of globalization and if it actually is such a fine thing. Good or bad, nonetheless, there is not much case as to whether or not globalization is happening. Let us focus at the positives and negatives aspects of globalization, and you can choose whether globalization is the best thing for our globe (Eswar 10). Positive Characteristics Of Globalization As more cash is poured in to developing nations, there is a better chance for the public in those nations to economically thrive and boost their standard of living (Eswar 24). Global rivalry encourages originality and improvement and keeps costs for commodities and the services in check. Developing nations like Uganda are able to harvest the benefits of existing technology like highbreed and advanced agriculture without undergoing several of the growing pains related with development of these particular technologies (Eswar 32). Governments are capable to improve work together towards universal goal of making the globe a better place to live. Now that there is a gain in cooperation in developing countries like providing business for small companies that work for them. Therefore, an enhanced ability to interrelate and organize, and a global awareness of the issues that resut from globalization. There is a better access to foreign civilization in the type of movies,food, music, clothing, and many more. In summary, the globe has more choices. Negative Characteristics of Globalization Outsourcing, whilst it provides job opportunities to a population in one nation, takes away these similar jobs from another state, leaving many people without job opportunities. For instance big football companies like Barcelona have taken players from their original small football companies so that they can play for them. Although diverse cultures from all over the world are able to collaborate and interact, they begin to bond, and the contours and identity of each state begins to fade.There is a chance for disease spreading globaly, as well as invasive species and families that could prove unfit to survive in non-native ecosystems (Eswar 37). {any example} There is little or no international regulation, a fateful fact that could have dreadful consequences for the security of people and the natural environment. Big Western-driven organizations like the International Monetary Fund and the well known World Bank make it easy for any developing nation to get a loan. Nevertheless, a Western-focus is frequently applied to any non-Western state, culminating in failed progress (Eswar 44-46). In conclusion, globalization and large corporations has influenced positively to business industry that has helped not only the consumers but businesses as well, both large and small. Both parties need to focus on the positive results that globalization brings alongside with it and exploit to full potential the opportunities created. It is the principles, values, vision, and objectives of business that determines growth and development of business and not size, because most large corporations at one time were small. All need to support globalization concept because of the global village that we currently live in that has impacted positively to both small and big businesses in the global world (Eswar 68). Works Cited “Global Economics: Economy and Globalization News”. Businessweek. http:www.businessweek .com/global-economics. Web. Nov. 28, 2013. Berberoglu, Berch. Globalization and Change: The Transformation of Global Capitalism. S.l.: Lexington Books, 2005. Print. Dunning, John H. Governments, Globalization, and International Business. Journal of Global Business Issues New York: Oxford University Press, 1997. Vol. 7(6): 34-65 Print. Hill, John S. World Business: Globalization, Analysis and Strategy. Mason, Ohio [u.a.: Thomson/South-Western, 2004. Print. Parker, Barbara. Introduction to Globalization and Business: Relationships and Responsibilities. Journal for Global Business Advancement. London: SAGE, 2005. Vol.4 (2): 77-98 Internet resource. Sachs, Effrey. Globalization’s Government –Project Syndicate.2013. www.project-syndicate.org/commentary/globalization-s-government.Web. Nov. 28, 2013. Wickramanayake, and Anil Perera. Financial Integration of Selected South African Countires. South African Journal of Global Business Research. 2010. Vol: 2(1): 43-72. Print. Prasad, Eswar. Effects of Financial Globalization on Developing Countries: Some Empirical Evidence. Washington, D.C: Internationl Monetary Fund, 2003. Print. Read More