Opportunities for the Multinational Enterprise Term Paper

Opportunities for the Multinational Enterprise - Term Paper Example The meaning of Globalisation can easily be interpreted from the word itself. It is nothing but going international. When people realized that they cannot survive from the resources that they had available in their vicinity, they began exchanging goods with their neighbors, which got expanded to exchange with other countries, organizations, etc. This exchange of goods for goods, or the Barter system, gradually turned into import and export of goods mainly based on availability, or technically the lack thereof, which brought about this whole cycle. When focused from an overall perspective, the term globalization is something, as part of which common people, organizations, etc interact among themselves in different spheres of their lives, including cultural sphere, financial sphere, etc, etc.. â€Å"Globalization may be thought of as the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life, from the cultural to the criminal, the financial to the spiritually.† (Wiley, Nandi and Shahidullah 1998, p.21). Although from the above definition, one can infer that globalization can be referred to any form of global integration or interaction, the fact, it is mainly used with an economic perspective and multinational business, and the resultant interaction between organizations particularly Multinational Companies (MNC). The term ‘globalisation’ involves increasing volume and variety of cross-border transactions in goods and services, free international capital flows and more rapid and widespread diffusion of technology. To make things simpler, we can say that Globalisation is a process of rapid integration of countries particularly MNCs, and how those companies utilizing opportunities in a particular market or another country, enter it to do business or another process there. On the other hand, critics of Globalisation emphasize the ensuing debate regarding the roles and relationships of corporat ions and the country’s citizens in maximizing economic development and social welfare. There appears quite a number of challenges for the MNCs while doing business in new markets as part of the globalization. So, this paper first discussing the main forces driving the globalization process, will explain the opportunities and then the challenges that globalization presents to multinational businesses. Forces driving the globalization process As the various trade and other barriers between the countries got broken, MNCs, using the globalization plank, have entered and are entering into different business sectors. This entry of MNCs into various territories to do business was not a new phenomenon, but an age-old phenomenon, which happened under the guise of imperialism. From time immemorial, various geographical territories, as well as nations, have been indulging in business with one another, to fulfill their product or service wants and shortages, as well as to garner good fin ances through product sale and thereby strengthening their economies. Even the British entered Indian subcontinent to do business under the tag of British East India Company. This form of trade has been going on for many centuries, however, certain countries in different points of their history have put certain restrictions on trade with other countries or enterprises due to political, financial as well as other social reasons. That is, this trade based entry started transforming into imperialism, as the European and other Western powers, tapping the weakness of the Asian and African ruling powers, eventually captured the nations’ territories and started to rule them. This set a bad precedent, and after independence many countries started actualizing a protectionist regime, preventing or restricting entry of foreign organizations. These countries or territories did not allow the entry of foreign companies as well as its products and even went to the extent of preventing its o wn companies to do any business with the foreign companies.