International Business

Question 2: Globalization can be very threatening for the small firms. How can governments and other supranational authorities support these firms?

Business environment is always changing, as President Obama emphasized during his elections, ‘Change’ is needed and the reason why we need to change is because everything is changing rapidly after the boom of internet and the only result to those who is not able to catch up will be one simple word, ‘Elimination’.

What is globalization and what are the impacts of it to the global economy?

Globalization describes a process, not a state. As Dalton.G. 1. points out, it is hard to describe these series of process so I will take New York Times Journalist and author Thomas Friedman, calls a ‘flattening process’. The world is being flattened in the sense that technology is creating a ‘flat’ or level playing field by allowing developing countries like China and India to become participants in international business on a par with the rich developed countries.

It’s been a long argument on the impacts on globalization and it is mostly concerning on the bad effects on the ‘infant industries’. Generally the impacts are present because of the less barriers of trade during the process of globalization which facilitates cross border trade and finance. There are many POS to both consumers and manufacturers such as the wealth gains and the technologies gains. It always CONS find when the POS exist which is for the small firms, not only CONS but they’re also threatening their survivals. Small firms may not be capable of enjoying the competitive advantages derived from the economy of scales in their early stage which is deadly to their survivals when facing the competition from the international MNCs after the removal of trade barriers by the globalization.

Under these circumstances, small business certainly has no hope facing the reality and so government intervention measurements are then recognized as reasonable and this...