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 TABLE OF CONTENT

TABLE OF CONTENT.................................................................................................................I
1. INTRODUCTION.................................................................................................................1
2. REFLECTIONS.....................................................................................................................3
3. CONCLUSION....................................................................................................................10
REFERENCES............................................................................................................................12

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 1. INTRODUCTION

The way business is conducted today has significantly changed from how it was decades ago.

Organisations are being forced to reconsider their business practices to align with the demands of

the present-day business environment. The changing business environment, the emergence of the

electronic market through sophisticated technologies and the internet, increased competition, and

globalisation are key factors driving these new realities. Globalisation, for instance, has

increased the interdependence of the world's economies, making most economies and

organisations leverage international trade (becoming multinational corporations and engaging in

importation and exportation. Furthermore, globalisation, a process that allows the free flow and

exchange of ideas, goods, services, people, and capital across countries, has integrated the global

market. Now, more and more organisations are going global and expanding their geographic

operations. When organisations operate globally, they provide customers with more choices,

boost competition, increase innovation, increase customer reach and satisfaction, and reduce

business risks by spreading them across diverse climes (Sousa, Martinez-Lopez, and Coelho,

2008).

The terminology ‘business environment’ means the totality of people, institutions, associations,

and other factors (internal and external) that significantly affects an organisation’s operations or

productions. Although businesses can adjust and determine how they respond to the factors that

defines the business environment, they cannot evade them because they are inevitable. Like

humans, organisations cannot survive in isolation; they grow, develop and thrive within the

boundary of the factors that constitutes their environment. The same applies in the global

business environment world which is multifaceted and more demanding because the global

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landscape differs from the domestic environment. According to Skripak (2016), the global

business environment is vast and complex. He further posited that to succeed in the global

business environment, organisations and business managers must have a comprehensive

understanding of the political, legal, economic and cultural diversities between countries.

A multinational corporation (MNC) operates in the global business space. The MNC has no one-

size-fits-all definition; however, certain features are peculiar when describing an MNC. These

include the level of control, size, technologies, assets and turnover rate and partnership and

affiliations. According to Dunnings (2008), an MNC is a company that engages in foreign direct

investment and owns or substantially controls value-added information in several nations other

than the host country or headquarters. An MNC produces goods or provides services across

multiple nations. For Shash, Yusuf, Hussain and Hussain (2012), multinationals are mainly

privately owned businesses that organise individuals whose functions are inter-reliant through

employment contracts and are located in more than one country.

Evidently, global business presents innumerable opportunities for businesses, justifying why

businesses strive to become MNEs and expand globally. However, despite how exciting

international trade is, it is also precarious. Regardless, as posited by Skripak (2016),

organisations and other essential stakeholders must have a mastery of the global business

environment to operate effectively and maximise its full benefits.

This paper reflects my lessons from the first five weeks of this course, precisely the academic

knowledge garnered through the modules and how they have immensely benefited me personally

and professionally.

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 2. REFLECTIONS

I approached the course with great enthusiasm and expectations, which have been exceeded so

far. I observe how businesses operate globally and have often pondered the possibilities,

peculiarities, demands and requirements. I have longed to understand the nuances of how it

works, especially being a business person myself. Consequently, realising that this course

focuses on managing resources in a global business environment fuelled my desire to get the

most out of every class.

Week 1

The topic for week 1 was 'Global business today', and we explored the concept of globalisation,

its determinants, impacts, opportunities and challenges for business managers, and how the

global economy is evolving. The topic was incredibly inspiring and very enlightening, answering

many of my questions and equipping me with a comprehensive understanding of the global

business environment and helping me appreciate business endeavours. This topic helped me

understand globalisation from two perspectives: i) the globalisation of markets and ii) the

globalisation of production. In the globalisation of markets, there is the merger of diverse

national markets into one global market, while the globalisation of production entails sourcing

products and services from different countries to benefit from the differences in prices and

production quality.

I also understood that operating in the global market is not a decision or an action a business can

hastily take. As a matter of compulsion, and if a business must thrive, it must carefully consider

the external and internal business environment, including its strengths, weaknesses, available

opportunities, and likely threats (Cote, 2020). Additionally, global institutions and bodies

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manage and regulate the affairs of the global business system. Some of these include the world

trade organisation (WTO), the International Monetary Fund (IMF), the United Nations (UN), the

World Bank (WB), as well as the Group of 20 (G20). Each of these bodies plays unique roles

that foster world economies and provide specific assistance and benefits to members. This

understanding will help business managers accurately decide which to belong to base on their

needs.

Also, in this lesson, I got to understand the two critical reasons for the massive drive toward

globalisation. According to Stiglitz (2002), they are i) fewer obstacles to the free flow of

commodities, services, knowledge and capital, and ii) advancement in technology leading to a

reduction in the cost of communication and transportation. Compared to the 1920s, there were

stringent trade barriers. However, after World War II, developed western nations significantly

mitigated the barriers by signing trade deals like the General Agreement on Tariffs & Trade

(GATT) and engaging in other initiatives that allowed for free trade. With regards to technology

and transportation, the advancement experienced has evolved how we connect, process

information and move products and services across nations.

Week 2

Week 2 was also very instructive. I came to appreciate the variations in the political, economic

and legal systems of nations. I developed a deep understanding of the diverse domains of the

business environment. This lesson taught me that international operation is much more complex

and demanding than operating locally. Although globalisation has increased interconnectedness

amongst nations, businesses must investigate the peculiarities of the global business

environment, including the laws and ordinances of the countries where they conduct business

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and ensure compliance (Hills, 2014). Furthermore, governments have the power to impose

regulations and ensure businesses abide by them.

Specifically, political systems mean the pattern or structure of governance of the government

ruling a nation where MNCs operate. Some may be collectivist vs. individualist, democratic vs.

totalitarian. In a collectivist system, for instance, socialism thrives; the state owns and controls

production, exchange, and distribution for the good of the whole society. This is not the same in

an individualist economy, which supports democracy, individual rights, freedom, diversity and

free trade. Understanding these peculiarities will help businesses make better decisions when

deciding which climes to operate. Conforming to the political requirements of nations is a strong

determinant of the success or failure of operating internationally.

A nation's economic system may be either a command economy, a market economy or a mixed

economy. These three have peculiar demands. In the market economy, for instance, supply and

demand determine the kinds of goods and services and the quantity produced. In a command

economy, the state government determines the goods and services produced, the quantity and the

selling price (businesses are state-owned). Just as the name states, a mixed economy blends

features of both the command and market economy.

I also became aware of the legal systems governing business in diverse countries. Laws bring

orderliness and they differ from country to country. According to Gangadevi, Devilakshmi, and

Saikabitha (2017), laws regulating business practices promote what is permissible and guide

against what is not. These include common laws, civil laws, and theocratic laws. I also

understood property rights, what is considered intellectual property in business and the

consequences of flouting them. For instance, businesses can protect their intellectual properties

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through patents, copyrights or trademarks. Using resources without referencing their sources can

attract severe legal, operational and reputational consequences. Additionally, I now understand

that MNCs must comply with the standards of their local or host countries. For instance, product

safety and liability requires that a degree of safety standard is adhered to and non-compliance is

severely punished.

Week 3

Week 3 is an extension of the knowledge I garnered in the previous week. The instructor

explored the macroeconomic business environment and how its variables influence business

operations and performance. We considered factors like economic growth, inflation,

unemployment, national income, financial stability, the balance of payment and the like. More

specifically, I was able to understand what brings about economic growth and level of output and

how economic policies are developed to maintain economic stability. Prior to this class, I had a

peripheral knowledge of what GDP entails; however, I now have a more comprehensive

understanding of the GDP and how it indicates a country's economic health and guides MNCs to

determine which economies are worthy of investment. Buttressed by Stobierski (2021), an

economy that records growth in its GDP or shows potential for growth and output will typically

attract investors, and a declining GDP will repel investors.

I reckoned that inflation/exchange rate must be another key macroeconomic factor impacting

global business. The value of a currency, the dollar, for instance, differs in worth in other

countries' currencies, and it affects the prices of goods and services in different countries.

Similarly, the inflation rate keeps fluctuating. MCNs must continue familiarising themselves

with currency exchange rates between the host country and subsidiaries and constantly monitor

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inflation rates to correctly make a budget for materials, labour, and pricing. I also gained insights

into how unemployment can affect business growth. Clearly, its impacts are negative; it results in

poverty since citizens' purchase and spending power are crumbled (because they do not earn

from paid employment/earn low income), and the par capital income of the country is affected

(Ademola and Badiru, 2016).

As a result of my learning, I have come to understand that sociocultural factors, including

language, culture, and time difference are essential contributors to global business. For instance,

countries express and communicate via the diverse languages they speak, and they connote

different meanings in different contexts. Therefore, businesses must consider languages and their

meanings to avoid operational and reputational risks due to miscommunication and

misinterpretation. An example was the case of the luxury car brand Mercedes-Benz when it

entered the Chinese market. The company chose to adopt a Mandarin Chinese name close to

Benz, which was 'Bēnsǐ.' Sadly, the translation is 'rush to death', totally different from the

impression Mercedes-Benz intended to create. Upon realising that the product message was lost

in translation, the company had to change the name to 'Bēnchí', which means 'run quickly, speed

or gallop'.

Week 4

This week, I strengthened my knowledge of balance of payment (BOP). I understand that a

country’s BOP represents its economic dealings with the rest of the world and demonstrates how

these dealings are linked to the domestic economy. According to Pugel (2004), the BOP is a

statistical declaration that methodically summarises the economic exchanges between an

economy and the rest of the world within a timeframe. The international monetary fund (IMF)

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also explains the BOP as a statistical report summary of an economy's financial interactions with

other nations within a specified period (IMF, 2000). Specifically, I got to understand that the

BOP covers all transactions, including all visible and invisible transactions, capital transfers,

financial rights and obligations, funds inflow, outflow, excess, and deficit towards another

country and its implications for the global market. The knowledge I have been equipped with

will help me carry out a thorough, investigative assessment of the economic and financial

dealings of countries, which will be very beneficial for me to thrive in the global market. As

buttressed by Ajayi (2014), my understanding of the BOP will help me forecast and evaluate

choice countries where my business desires to operate, identify their demands and what to adopt

or avoid. Second, with my understanding of the BOP, I can better analyse the competitive

position and predict the direction of pressure on the exchange rate of the currencies spent in

countries where I may choose to operate and help examine the possibilities of export growth.

I also learnt about the foreign exchange market, its flaws (volatility, unstable value, inflation

rates, scarcity and inaccessibility), and its critical role in global business. Davidson (2009)

opined that FX often fluctuate in value; the market, therefore, determines the value it holds per

time. Thus, understanding and monitoring market value and promptly trading with it when it

holds reasonable value is a significant determinant of profitability or loss.

Week 5

In week 5, I learnt about trending issues in the global economy, the factors driving globalisation,

the nature and roles of the MNCs in the global economy, and the benefits and challenges that the

global economy is confronted with due to MNCs. I learnt the main drivers of globalisation,

which Yip (1992) cited in Delfmann and Albers (2000) categorised into four. These are i)

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competitive drivers (competitors, high rate of exportation and importation); ii) government

drivers (favourable policies, market regulations); iii) cost drivers (favourable logistics, sourcing

efficiencies, fast-changing technologies); and iv) market drivers (customer's needs, distribution

channel). All of these factors make it possible for ease of economic activities across national

borders.

Becoming an MNC produces benefits, including costs reduction and exploration of new markets.

Recently, many pharmaceutical companies go to countries such as India for production because

production cost is significantly reduced compared to their domestic countries. By leveraging the

resources available in the host country, they access cheaper labour and highly-skilled workforce,

thereby increasing productivity and product quality and reducing cost.

Additionally, MNCs could cause challenges for the host countries just as much as they bring

many benefits. For instance, since the MNC hire workers from the host community, the host

country will enjoy employment benefits, technological advancement, better BOP due to capital

inflow, and transference of skills. In contrast, the challenges include the host country's insecurity

about the MNCs ceasing operation (resulting in job loss and low GDP) and the MNCs' attempt to

reduce or evade paying taxes to their host countries by engaging themselves in transfer pricing.

Generally, this course has equipped me with the knowledge and skills to maximise opportunities

to globalise effectively. I understand the external and internal global business environment, its

nuances, and how to apply the lessons learnt. It has also honed my introspective, critical thinking

and analytic abilities, which is significant for effectively functioning in my current and future

endeavours. The activities of the first five weeks of this course, including the task and discussion

forum especially, enhanced my collaborative and communication abilities. Similar to

understanding and adjusting to the demands and peculiarities of global economies, I have learnt

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to appreciate and accommodate diversities and the uniqueness of humans and value other

people’s opinions in my daily activities. I have recorded tremendous improvement in my

interpersonal relationship with others.

3. CONCLUSION

My reflections explored global business in this age and how fewer barriers to free trade and

technology are integrating the business world. Also, I touched on the two perspectives of

globalisation (market and production) and the need for businesses to carefully analyse and

understand their internal and external environment to succeed in the global market. Also, I

identified the international bodies serving as regulators and mediators in global business affairs.

Second, the reflections on the variations in nations' political, economic and legal systems lay

credence to the importance of understanding these variations to avoid legal, operational and

reputational risks and determining entry into new markets. Third, I considered the

macroeconomic business environment and how factors, including inflation, exchange rate and

balance of payment, economic growth, unemployment, and financial instability can impact

global operations and performance. Fourth, I looked at how the balance of payment of a country

speaks volume of the country's financial health and how it serves as an indicator for making

investment decisions. Fifth, I explore what constitutes a multinational corporation, the reasons

why businesses are seeking to become MNEs, the benefits to businesses, as well as the benefits

and challenges to the countries that host them.

I believe that technological advancement tremendously impacted the global business

environment, as well as contributed to the changes in demographics (market and customer),

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crushing the stereotype that certain countries only participate in global business. Now, more and

more countries partake in world trade. Although not without challenges, in fact, the global

business and globalisation have been critiqued for causing more harm than good by increasing

poverty through wage inequality, unemployment and the exploitation of resources, skills and

labour, for empowering MNCs instead of the citizens or the government, creating trade

imbalance, creating tax compliance issues and widening the margins between the poor and the

rich in society (Elliot, Kar, and Richardson 2002). I believe that it has been more beneficial than

detrimental; it has provided a level playing field for nations, improved nations' prosperity and

standards of living, increased global tolerance and cooperation, reduced the monopoly of

products and services, fostered unity, created new markets and expanded technologies,

knowledge and expertise among nations.

As long as technological advancement and ease of movement are a thing, global business will

thrive, and more businesses will seek to engage in cross-border trading or transactions. This

informs that competition will heighten, and only businesses who know their onus and understand

the global business landscape will thrive. The place of market research can never be

overemphasised as long as global business environment is concerned. In addition to mitigating

marketing risks, researching and possessing adequate knowledge about a foreign country is

leverage for staying competitive and maintaining market relevance.

Lastly, businesses operating in the global business environment must remember that change

remains constant; the ideas, technologies and systems relevant today may become obsolete

tomorrow. Therefore, they must continue to stay informed, dynamic and adaptive to evolve with

the changing times.

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REFERENCES

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