The Importance Of Globalization In Business

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The company can be defined as an institution created to conduct business, and an organization of performers and associated personnel. These characteristics determine the company’ s fundamental purpose is to make profit. Companies often change and decide the company’ s business strategy, according to the change in situation. Thus, driven by the profit, and the context of globalization, more companies move factories in developed countries to developing countries which also means globalization. Human is going through an important period of historical change. These changes are not confined to one region of the world, but almost every corner of the world( Giddens 2013). Under the influence of economic globalization, the economic relations between…show more content…
As shown in Table 2(Bruhn 2013), a large amount of resources are distributed in the Southeast Asia where a great quantity of developing countries also located. Taking Cambodia as an example, Cambodia contains the largest variety of resource compared with others at the table, including silver, gold, natural gas, oil, and coal. Myanmar which has the least variety of resource in the table also have rich gold, and coal. However, industrial structure of developing countries is single. Usually, local enterprises can not effectively mining, and processing resources, foreign enterprises have no wealth resource with master technology. Thus, not only for profit,, but also for the effective use of resources, and the development of the global economy, companies are more active to do overseas…show more content…
Citizens of developing countries have an increasing demand for foreign consumer goods, and just a small part of citizens can often go abroad to consume. Thus, other residents can just consume the required imports with high tax. The Table 3(Gupta 2013) in appendix shows the tax account for a high percentage of GDP which means locate people need to pay much to consume the foreign. Sometimes, in order to protect domestic companies, government set high duties which result in the price of imported goods being expensive than it in country of origin. Foreign direct investment can enable companies to circumvent international trade barriers, engage in production and business activities as a domestic company, and not affected by customs, taxes and other import restrictions. Now, more factories have moved to these developing countries, and the goods that are produced in the countries also are sold in the countries. The measure reduce the price of the product a lot, and improve the relative purchasing power of residents. To a certain extent, it also improves the well-being of the

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