Question

a) Describe the factors that have contributed to globalization of the business? b) Free market economy stimulates greater economic growth, whereas state-directed economies stifle growth. Discuss the validity of this statement. c) The concept of development should be broadened to include more than just one factor. Discuss the factors that can be used to describe development in a nation? d) Outline why the culture of a country might influence the costs, risks and benefits of doing business in that country. Illustrate your answer with examples.

Answer 1

a the following are the factors that have contributed to globalization of the business,

Containerisation . The lower unit cost of shipping products helps to bring prices in the country of manufacture closer to those in export markets, and it makes markets more constable

Technological advancement

Rapid technological change has reduced the cost of transmitting and communicating datas speedly  it helps to connect all the world together

Economies of scale  Many economists believe that there has been an increase in the minimum efficient scale (MES) associated with some industries.

Differences in tax systems

The desire of businesses to benefit from lower unit labour costs and other favourable production factors abroad has encouraged countries to adjust their tax systems to attract foreign direct investment (FDI). Many countries have become engaged in tax competition between each other in a bid to win lucrative foreign investment projects.

Less protectionism countries not a days follows the policy of trade protectionism

2 free market economy simply means there is no trade restrictions free level of exports and imports the government have no role and control over the economy , private enterprises and indviduals hold the major role , lack of resttrictions in trade helps more countries and companies to engage in business with the countries and increase the level of foreign direct investment into the country , it helps to flowing the industries altogether helps to growing the countries

instead of this state directed economies follows a policy of protectionism all together it redcues the foreign investment , and more governmnt interventons leads to pamperism and leads to read tappism which enables the growth into negative

3 development is a complex word includes different paara meters like social economical political environment stablity and balancing of all these factors , if a country produce more and more but the living standerd and education level is poor , the poverty rate is high then we cannot says that the country is a developed one , other hand a cpuntry enables industries which in harmful to the environment could not constitute a developed nation , development brings up only taking care of all these factors and improvement of both the quality aspects.

4  Sometimes cultural difference between countries can cause a negative impact when conducting free market businesses. for example if Walmart tries to expand its operation in India. It attempted to do so but buying out local farms and small stores is difficult one , As it did it was enabling the products for lower prices like  vegetables such as tomatoes and potatoes. Thinking that Indians would buy into this strategy Walmart opened up shop. Indians may be price conscious as much as Americans but to them loyalty and integrity meant more. As soon as the Indians found out that local jobs for the average citizen was being cut they immediately stopped buying from Walmart. . The American culture is embedded with how best to save cost when shopping. People are always trying to find the best deal.  
Another example is the Japanese culture. They take very seriously about having their own corporations run their country. It is very difficult for outsiders to go business there. Japan has a very large IT distribution sector and the largest IT distribution corporation that generates $40 billion in revenues headquartered in America is not able to set-up shop in that country. Japanese culture simply believes that it is best if their corporation, their employees and their stock-holders benefit from doing business within.