The benefits and costs of globalisation for business
As you explored earlier, globalisation creates both opportunities and challenges for businesses.
Some of the benefits of globalisation are:
- It offers opportunities for firms to gain access to the larger markets
- It helps businesses to gain access to cheaper factors of production, such as raw materials, natural resources and labour
Some of the challenges globalisation poses are:
- The uncertainty created by the complex global environment: businesses are increasingly confronted with different political regimes, legal and regulative issues and cultural and social norms
- The value chain of businesses – the activities they need to perform in order to deliver their product or service to the market – is becoming increasingly dependent on foreign markets and suppliers
So, the challenge for CEOs is to figure out how to maximise the benefits of globalisation while minimising the costs.
Read the following Forbes article on globalisation:
- ‘This Is How Globalization Is Affecting Entrepreneurs’ (Power, 2018)
Based on the information in the article: ‘This Is How Globalization Is Affecting Entrepreneurs’, how would you maximise the benefits of globalisation while minimising the costs? Discuss your suggestions with other learners.
What would be the pros and cons for maximising the benefits of globalisation while minimising the costs?
Share your thoughts in the discussion area.
Power, R. (2018) ‘This Is How Globalization Is Affecting Entrepreneurs’. Forbes [online]. available from https://www.forbes.com/sites/rhettpower/2018/07/15/this-is-how-globalization-is-affecting-entrepreneurs/#6e3d3bc71b7a [2 April 2019]
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