Globalization

Introduction

Globalization had led to both positive and negative transformations and its impact is huge and diverse.  Unlike twenty years ago, today people around the world can access information, services, and products easily. Also, the emergence of the internet has influenced the continued changes in globalization (Habib, 2011). Currently, the business sector is experiencing improved technology which has made it easy for individuals and companies access information. With easy access to information, competition in the corporate sector has become competitive and fierce.  Developing countries such as the U.S highly depend on outsourcing.  Hence, the effect of international trade through outsourcing is having a huge impact on the United States. The state is outsourcing a huge number of local jobs to the developing countries for fewer wage rates so that they can obtain cheap products and services. In this case, globalization in the U.S has had both challenges and opportunities for different sectors forcing the executive to adopt new approaches so as to remain competitive.  

First, one of the problems that might affect an international executive is the transformation in the U.S wages pattern. Research shows that the model has changed over the last fifteen years. Initially, in the beginning of the 1990s, all employees grouped based on education status experienced a high increase in personal income (Haskel et al., 2012). However, in 2000, the employees experienced a fall in wages. The real income of many American workers continued to fall despite the growth of GDP and productivity. The decline can be linked to rising corporate profits. In this case, it is evident that globalization has negatively changed the U.S wage pattern. Additionally, globalization has led to wage inequality, for instance, there has been a rise in the ratio of the median yearly earnings of college graduates to high school graduates. The income of the highest-earning employees has also increased. In 1991, the average salary of the employees was $534,264, and it rose to $857,477 in 2010. Although, the groups of workers are highly educated, the difference in real income is unfair.

The international executive will be required to ensure that they manage the wage pattern to minimize inequality. It can be achieved by putting more focus on the individual skills rather than the education background. Although education is linked to enhanced skills, many school drop outs have proved to be successful (Haskel et al., 2012). For instance, Bill Gates is a college dropout, and despite this, he is highly skilled. The international executive should focus on particular group of people so as to attain equality.

In turn, increased globalization has put constant pressure on companies to deliver. Businesses have become more profit oriented as they seek to minimize cost and at the same time increase the profit margins (Habib, 2011). Organizations in the United States outsource jobs to the developing states because it is expensive to employee local workers. The government has imposed strict work regulations, benefits as well as standard pay rates. Therefore, it can be difficult for companies to manage American workers and increase their profit margin. Initially, American multinational companies outsourced blue collar jobs to Mexico. The country was the best option because it is near and has cheap labor rates as well as effective rules and regulations.

Nevertheless, the companies started seeking other options after the Maquiladora industry was affected by low employment rate in 2002. Hence, American multinational organizations began seeking cheap labor from China and India (Habib, 2011). The companies are seeking to minimize costs at the expense of offshore workers. The approach results in hazardous working conditions as firms do not focus on safety and other benefits of the workers. Hence, an international executive might face pressure to increase profit with minimal expenses. He or she ought to balance the company’s costs and its profit. The balance can be achieved if he or she hires highly skilled workers that will help in increasing the production of quality goods.

Apart from challenges, there are various opportunities that an international executive may face in next five years. First, with the increased globalization, the marketplace is exceeding borders offering organizations access to greater market size (Habib, 2011). There are various options for the clients to select from; therefore, the companies are forced to increase their production so as to increase their competitive advantage. In this case, the international executive should work on increasing the company’s production. Additionally, globalization has led to higher productivity and efficiency within the business sector (Rajagopal & Behl, 2016). Companies can produce quality products at a reduced price. The approach has helped in keeping the inflation rate low which allows states to be competitive in certain sectors. Consequently, the decisions made by the executive are of great importance for the greater good of the people. Therefore, international executives will be required to expand their mandate so as to ensure that the organizations remain competitive. 

Moreover, globalization has had a significant impact on culture. Cultures are being flooded with new and diverse ideas as well as beliefs which are transforming people’s lives. Some of the forces of globalization include taxing the youth, families and cultural systems globally (Scriven, 2014). Every social system is contaminated by the need of people to borrow values, skills, and competencies from other regions or countries. Some of the organizations have handled the challenges well. They have invested in the international market, and to succeed they localize their products (Rajagopal & Behl, 2016). Localization has allowed the companies to attract more clients and increase their chances of succeeding in the global market. Furthermore, international companies are developing values and beliefs that rise their success in the global market. Also, consumers are conducting more research on products in search for the best deal. Currently, a brand name is not the primary determinant for clients’ choice. Hence, international executives will be required to change their marketing approach so as to survive in a rather competitive market. 

Conclusion

Globalization has had diverse challenges and opportunities on the U.S market. One of the challenges is that it has led to a negative wage pattern. Although the high-income earners are imposed a small percentage tax rate, their salaries have continued to increase. The approach has widened the gap between the highest income earner and the lowest income earner. International executive will be forced to balance the wage pattern. There is also increased pressure on organizations to increase profit rate and minimize their expenses. Despite the challenges, there are various opportunities presented by the globalization. Companies have a chance to increase their productivity and expand to other markets. Also, they have a chance to transform their marketing approach so as to succeed in the international market. The executive needs to focus on different economic drivers so as to remain competitive in the global market. 

References

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Habib, A. (2011). ‘’American outsourcing’’ the impact of globalization on the way organizations

conduct their business overseas, the case of general electric . EUL Journal of Social Science, 1(2), 107-118. Retrieved May 18, 2017.

Haskel, J., Lawrence, R. Z., Leamer, E. E., & Slaughter, M. J. (2012). Globalization and U.S.

Wages: Modifying Classic Theory to Explain Recent Facts. Journal of Economic Perspective, 26(2), 119-140. Retrieved May 18, 2017.

Rajagopal. & Behl, R. (2016). Business analytics and cyber security management in

organizations. Hershey: Business Science Reference.

Scriven, J. (2014). The Impact of Globalization on the Consumer. 13-23. Retrieved May 18,

2017.

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Paper details: Assignment 3: Globalization

Directions:

Think about what you have read and seen in the news on globalization. Consider the fact that the clothing we wear, the cars that we drive, the cell phones we use to communicate and the computers we use to work, are each likely to have been manufactured in whole or in part in different parts of the world. While there are still companies and firms that maintain local and national borders, it is almost unheard of in the 21st century that an industry does not maintain an international strategic position.

From an executive’s position, identify and explain at least three challenges and opportunities that might face an international executive over the next five years. Provide possible solutions of how the executive might address these issues in order for their firm to maintain a competitive advantage.

Prepare a 4-6 page paper that describes the impact of globalization on U.S. businesses. In your analysis, please include information about the impact of at least four economic drivers that might impact globalizatio

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