HI6008 Globalization and Impacts on Micro and Macro Business in UK Assessment Answer
What are the impacts of globalization on business growth and expansion of micro and small businesses in the UK
The positive side of globalization has a long-lasting implication, which can be an effective source of the widely used resources and how to convert them into effective use. The purpose of the essay is to understand the “globalization and the impacts on the micro and the macro business in the UK”. As noted, how the use of the globalization can also have the positive and the negative impacts, such as the globalization can help to increase the overall welfare surplus of the economy, while for the producer, if they are not competitive, then it would cause the loss of the business. The importance of globalization can be understood in today's world and throwing impact in the UK business. It is observed, while globalization can affect micro business, as they would not benefit from the high scale foreign inflows of the same products. Similarly for the major business, the main challenge would be how to seen trading with the across globally, thus earning the high production conversion to the profits. Globalization can help both the consumers and the business to connect and can also help in deriving the benefit and the welfare, thus reducing the deadweight loss (Smallbone 2019). The globalization has been identified how there can be a cascading impact and it can result in the positive impacts on the economy
Globalization is defined as the market, which can help to trade and merge that belongs in the different national markets and convert them into one single global market. Globalization also helps in reducing the cross borders and can help in overcoming the barriers, which can further rust in the increase sell and the buy of the same product and the services. The globalization can be understood as to how the markets that belong to the gradual integration can help to convert and match with the customer preferences. Nwajiuba (2020) has mentioned the globalization has increased the exchange of goods, from one place to another, thus befitting in the increase in the technology, in the increased use of the labor, capital, and also the end products have multiple choices. For example, if the micro SME is operating in the UK, selling footwear, before globalization, all the people of the town belonging to that region, where the micro business is operating would purchase the footwear from the shop. Due to this the micro-level SME, can change the customers as per the convenience, as he would have low and no competition around. The other thing is the micro SME selling specific product may also experience a monopoly in such cases. The customer can be exploited and they would experience a rapid, reduced consumer surplus, as the producer would be charging a high price from the customers and the customers would be bearing all the loss. In such a scenario the producer would gain and the consumer would have the loss.
Petricevic (2019) has mentioned how the globalization has happened, it has allowed the foreign goods and the services to sell within the market, for this, now the micro-unit of the UK SME would experience a tough competition, as the entities market would be flooded with the foreign cheap priced and high-quality products. Due to globalization, either the micro-unit SME can use the innovative approach, research over the foreign good, or simply experience a shutdown business and an exit out strategy. If the UK micro-unit operation uses the competition to their advantage and even increases their protection with the high quality and selling competitively at the foreign good prices, the consumers would not switch and they would continue to buy the product from the same producer. This would be the case of both the consumer and the producer benefitting due to globalization. Due to globalization, the consumer would have wide choices and they cannot have to bank upon the single technology high priced producer or seller, selling in the market. The consumer can demand Apple iPhones or the Lenovo laptops from anywhere, which would deliver in no time.
Mohammed (2020) has described how globalization can have its advantage and its disadvantages. While for the UK, the main purpose to go ahead with globalization is that they are the producer of the few products and they are not being able to produce all the goods, with the given resources, for examples, such as Oil or the energy. Secondly, the capital is highly-priced, while labor is expensive. Stackhouse (2019) has mentioned how the UK can rely upon their market innovation and the high technology used products, such as producing the drugs, which has not been produced by the global seller and taking the market advantage in it. The UK can also employ cheap labor from countries like the UK, India, and across South Asia. Due to the labor employment in the UK, both the parties would benefit, such as the business would get the cheap labor who can produce tremendously, while the nations like China and the India, where the labor is abundant, there is low employment opportunities and there is also the high poverty, would benefit by getting employed in the UK business and bringing home the UK currency inflow to India. Globalization apart from the benefit in the trading also helps in the perfect mobility of the labor, capital, and even exchange in the innovation and ideas. Tijssen (2019) has mentioned how due to globalization, at no point, the economy would benefit and can learn the new technology, increase its global presence, and even open the channels to trade. For example, in the micro sector of the business UK, the section of business have no technology idea of how to produce the cheap laptops which are from the latest technology, but due to the globalization apart from hiring the global leaders from the set companies, who are knowledgeable about the given technology can even benefit the by placing the use of the technology and increasing their production. Wong (2019) has detailed how the globalization is defined as the production of the source of goods and services that would exchange from across the globe and even take advantage of the differences to the cost and the quality of the factors of the production. As China is the leader in the cheap quality high production, there are low labor costs, the companies like the UK big business and the micro-units can think of setting the offices in the given destination to produce the maximum goods and the higher production and even enjoy the parallel economies. It would help to produce the product at the cheap low labor cost, can help in the overall enhanced economies of scale and even help in gaining an undue advantage due to the rapid use of the globalization production, For example, the Mittal Steel plant wants to sell the high-quality steel across, they can also open the centers in India, thus helping India, to employ the maximum labor and generating the revenue. The country would reap the more foreign exchange flows and the Mittal steel plant would benefit from the cheap production centers and producing high-quality products. Globalization also helps the both the low skilled and semi-skilled labor to increase their knowledge and understand what the global requirements are. The global leaders can train the low skill labor and the semi-skilled of the latest technology and the innovation, who can further share the same knowledge with the other operating peers and colleagues back home. Similar to education, as most of the education in the set countries is in the native language, due to globalization, it has helped the education system to get improved. Some of the country schools have the mandatory “English” as the global language there is increased use of the latest technology such as the video-based classes, the time recorded audio/video knowledge, and the online courses, that are readily available and free access to the large communities. Globalization has helped the micro SME's in the UK to survive and learn the innovation, has allowed opening the new production centers globally, and also has helped in the gaining of the increased foreign exchange flow. Subsequently for the major UK business, it has helped in the overall increase in the production, exchanging high-quality products, using the competition for the advantage, and even reaping the high technology and the highly used production items. It has overall helped in gaining the high foreign exchange inflows and it has also helped the companies to expand, beyond the UK centers. The UK is by far the expensive country and with the limitation to the highly skilled labor being expensive and serving in the tough legislation centers, both for the small and the big business units, it would be an advantage for the overall success and the growth that can help to define the business goal path.
Globalization and impact on Micro and Macro Business
Within the UK, the Small Medium Enterprises has an approximation of the 50% that contributes to the national GDP and similarly has over 60% of the total employment that shows that how it has been derived from the high-income countries. Small and Medium Entrepreneur plays a vital role and even in streamlining the economic growth that can be the biggest advantage for the overall working in the job creation (UNCTAD) (da Silva Lopes, 2019). It is also important to understand how the small businesses can further even employ the economic growth and can help to gain an economy which is from the small scale as an advantage for the developing countries and it is also largely an important factor that can result in the overall growth and profitability due to globalization (Chege 2020).
As observed, the UK infrastructure is far from the superior and the major economies and the business can find it an advantage to do business with the well-connected UK. The economy is stable, not very volatile and the currency is also not very fluctuating. The SME’s operating in the UK would also enjoy enhanced communication, can benefit from the increased presence of the SME’s and also help in reducing the cost of the production. The UK business also has to experience the heavy costs and they can be compelling size issues, which can be faced by the SME’s. The problem of the limited resources such as the high financial returned(capital is expensive) along with having low manpower (skilled and semi-skilled both), can cause tough market research, market entry and even can cause the higher proportion of the total spending (Araar, et al, 2019).
Globalization has also helped the UK business to understand the cross-cultural implication, to exist in the diverse system, and how to hire the global recruits. The UK business follows s a strict westernization culture and has a structured business, which is formal and hierarchy-based. While hiring the other culturally different person or the people from different backgrounds, the company can open the policies, train the newly hired, and even can help them to understand how the company exists. Similarly, when expanding in the other parts of the world, such as in Malaysia, the UK business can understand the costing factor, cultural attributes and the festivals they celebrate, in order to make the policies and the procedures, far adaptable to make the employees adjust freely (Alharahsheh, 2019).
Globalization has even the worse based scenario, such as facing the threats, implications, even facing the issues, complications that can further cause the business to exit out of the operation, or simply shut down the process. Due to the opening of the orders, the MNC; s in most of the countries, would like to penetrate the UK country, thus causing a tough competition and even can result in the negative effect of the profitability. It can also lead to high losses and can cause the business to shut down the operation. The other problems are faced, which is the high increased spending on the research and the development in the market entry area and how much higher it is when in the proportion of the total spending of the smaller firms in lien to the large business. It can also cause the problem of the opening of the borders and can result in mass migration. It can also cause an increase in the economic threat with security, safety, and other cultural clash issues (Alharahsheh, 2019). The countries can even lose their talent, skilled people who can easily switch and adjust in the new economies. Through the globalization, the problem can be a high stiff completion, while investing and penetrating in the new scouted regions.
Globalization in most developed countries, including the UK, can cause an increase in the taxes, quotas, and trade wars, which can lead the UK business to lose a large considerable share that could lead to the crises punt. Also, some of the foreign firms would like to collaborate or even jointly venture, thus giving a tough competition to the other forms, can cause an increase in the pressure of the resources and can lead to smaller firm either getting acquired or simply exiting out of the business and opening in the other country, causing a loss in the foreign direct investment.
To conclude, how globalization has its own advantage for the UK micro and the macro business, while experiencing within the country or trading out with the other countries, has helped for the overall betterment of the economy. It has helped the country to upscale its production, reap the absolute and the comparative advantage in the few products, and the services such as the, Steel or the other R&d pharmaceutical shops. Globalization also helps the both the low skilled and semi-skilled labor to increase their knowledge and understand what the global requirements are. Similarly, the negative impact of globalization can be shutting down of the UK business and helping the business to expand, originate, and even expand in the overall global market. The UK economy has further developed due to globalization and there has been a positive impact on the micro and macro levels of the business. The economy, is far stable and the UK business has benefitted from the favorable trading conditions and the external environmental networking. The UK business has even survived with the high foreign inflows which have been used as the betterment of the economy and have helped in the overall development of the country, the increase foreign inflows can be used in the country investments and can help in advantage to the companies to reinvest and even expand further. The global employees can get advantage to work in UK and experience skilled labor and the semi-skilled that can work alongside with the latest technology and the innovation, who can further share the same knowledge with the other operating peers and colleagues back home. Globalization has helped in the overall welfare development, from gaining the skilled labor advantage to expansion and further has helped in the trading advantage.