Forces Driving the Globalisation Process Research Paper

Forces Driving the Globalisation Process - Research Paper Example Today, organizations can only ignore the rest of the world at their own peril due to the heightened competition both within and beyond their countries of origin. Operational and competitive strategies of businesses have to factor the globalization aspect more than ever before. Globalization, therefore, requires firms to keep abreast what their competitors are doing, where they are located and which economic, socio-political and technological developments are happening in these locations. Multinational businesses have been facing challenges in their endeavor to venture into various markets worldwide which are slowing down their prospects and the general speed of globalization. This paper will look into the forces driving globalization and explain some of the challenges that globalization presents to multinational businesses. Forces Driving the Globalisation Process Manufacturers and service providers have revolutionized the global market environment in the last 3 decades. This has bee n facilitated by the fact that organizations have increasingly formed joint ventures and strategic alliances and established foreign subsidiaries. These actions create the concept of process in globalization since a bigger picture is created which facilitates the movement of products and services to markets all over the world. It is therefore important to identify the various forces that drive globalization. Capital markets liberalization For globalization to spread there is need to have the free flow of investment beyond the confines of one country or region. Digitization of capital offered this opportunity although many countries that adopted it faced numerous start-up challenges. Many Asian countries are among the affected especially in the late 1990s. A serious financial and market crisis ensued in Russia and Argentina in the early 2000s and at this point, the IMF was blamed for having faulty policies (Tallman 2010). Those against liberalization argued that speculators were to t ake advantage of and affect cross country movements. In this respect, certain taxes were proposed for example the Chilean and Tobin taxes control the extent of speculation (Tallman 2010). As much as it is true that liberalization had its shortcomings and that some nations felt it harder than others, its benefits far outweigh its initial setbacks. One such benefit is the easy access to funds for SMEs and entrepreneurs. It is also true that in many countries banks and financial structures are largely government controlled. However, these governments have been relaxing their muscles due to pressure from inter-country competition in attracting foreign investment. As a result,  capital markets have been progressively liberalized so as to attract investment and interlink financial markets. The risk though of these practices is currency fluctuations e.g. the dollar as the case is today with the looming crisis in the Middle East and North Africa particularly Libya which is a major oil exp orter.