Study on Globalization and the International Business

薛宸哲

Ⅰ.Introduction

Globalization is the increasing economic integration of the world，which can be defined as a mixture of processes by which products，people，companies，money and information are able to move quickly around the world as decision-makers desire（Janet Morrison，2011）.Obviously，globalization includes all the processes that reflect the independent movements acted by different players instead of a single process worldwide.

Ⅱ.Globalization process

There are two fundamental themes of globalization processes，namely，interconnectedness and interdependence.

A.Interconnectedness

1.Transport advances： Transportation is the guarantee and prerequisite for the development of national economy.

2.Internet and computing： With the development of Internet and computing，the transmission mode of financial information has undergone enormous changes in the field of financial market.

3.Global financial flows

Globalization of investment and financing，in which investors and financiers can select the most suitable financial institutions and instruments，provokes the globalization of capital flows.

Since 1980s，the international capital flows represent ceaseless accelerating and expanding trend.Especially since the 90s，an unprecedented number of international capital with startling speed and dramatic changing forms promote the rapid expansion of global capital.We can conclude that from the financing scale of international bond market，including financing value of bank loans，notes financing and bond issuance that increased from $ 62.2 billion in 1973 to $ 145 billion in 1979 with an average annual increase of 15%.While after the 90s，the value increased from $427.6 billion in 1990 to $1513.9 billion in 1996，which showed an average annual increase up to 23.5%.On the international stock markets，the total average annual in and outflows of capital of developed countries amounted at $47.6 billion from 1976 to 1980，while it reached $631.1 billion from 1991 to 1994.Moreover，the financing scale of mutual fund was even more amazing.Take United States for example，in 1970，the number of mutual funds was 400 with total assets of proximately $44.8 billion，which experienced a corresponding increase in 1994 to 5，300 and $2.1 trillion.On the global foreign exchange market，the current average trading volume is about $2 trillion per day，which is about ten times than that of ten years ago.

4.Global production networks

The globalization process of production networks had already started far back in the past.Especially after 90s，the process of globalization of the world economy dramatically accelerated.The globalization of production networks is conducive to the rational allocation of resources and production technologies worldwide.Also，it is beneficial to global flows of capital and the expansion of science and technology.The globalization of production networks，in the meantime，foster economic development in underdeveloped regions.However，for any country，it is a two-edged sword，namely，meeting both opportunities and challenges.Besides，globalization of production technology and resources also can be accomplished.Enterprises select raw materials and low-cost labor in developing countries，while purchase spares from countries that own relatively high production technology and quality.

Apple Inc.in United States is a good example of the globalization of industrial networks.In 2010，iPad launched with lowest priced at only $499，which was beyond expectation of many peers and customers.With this price，Apple Inc.，to a large extent，compressed，even blocked out the survival space of similar products of other companies.Wonderful designs and moderate price of Apple products stimulate the market sales，which provide incredible profits for the company.Why do Apple products have such price advantage？ How can the company break through the bottlenecks in the research and development period so quickly？ The key point is that Apple Inc.owns global production networks.

The design and core technology are owned by Apple Inc.，but its spare suppliers and OEMs（Original Equipment Manufacture） are distributed in many other parts of the world that have their respective location-specific advantages.The microdrive，decoder and PCB Board of the iPod are produced by internationally renowned enterprises such as Toshiba of Japan，Samsung of Korea and Philips of Netherlands.However，other spares such as batteries，chargers and headphones are mainly produced in China.With regards to the OEM production，Apple Inc.distributed iPod industry qualification to 4 enterprises of Chinese Taiwan，namely，Quanta Computer Corp.，Inventec Appliances Corp.，FSK and ASUS Computer Corp..However，these OEMs accomplish production primarily through the production base in mainland in China so that they can take full advantage of the Mainland's abundant and low-cost labor resources.Regarding to sales，Apple Inc.adopt 3 main channels.Initially，they use Wal-Mart's sales channels；secondly，they set up stores for sale；thirdly，they are seeking certain potential distributors and sales agents.In collaboration with the whole industry chain，compact，delicate Apple products successfully occupy the major markets.Apple headquarters are actually not too large，in addition to tracts of green space，there are only several ordinary buildings.We can conclude from the experience of Apple Inc.，enterprises may achieve success only by constant technological innovation，management innovation and taking advantage of global production networks.

B.Interdependence of countries

Turning to the interdependence theme，it can be divided into three phases.

1.Economic integration

Pinder（1969，pp.143-145） cites the Oxford Dictionary which described integration as the combination of parts into a whole.He concluded that integration was a process towards union and defined economic integration as the removal of discrimination between the economic agents of the member countries（Miroslav N.Jovanovi?，1998）.

Broadly speaking，economic integration refers to world economy integration.That means the mutual opening between the countries in economy so that they can interlink and interdependent with each other.For instance，the World Trade Organization（WTO） is a permanent international organization of the United Nations that responsible for managing the world economy and trade order.It started up at 1st，January，1995.

Narrowly speaking，economic integration means regional economic integration.The meaning of that is an integrated institution that is authorized by government，composing of two or more countries or area in this region.They aim to eliminate the obstacles that hinder economic trade development by developing unified internal and external economic and financial policies.Eventually，they would like to form a unified organization to achieve mutual benefit，coordination development and optimization resources.

2.Political co-operation

Globalization is a significant feature in recent times，especially in the last decade of the 19th century；it can be seen in almost every field in international community.Among these，it also includes the international political field.International political resources occupy a significant position in the international political developments.Therefore，we should attach importance to any influence that development of globalization made on the international political resources.When a country's resources and the market cannot satisfy the community with maximum wealth and interest，it will limit the accumulation of wealth and benefits of the community.Naturally，it will open up new markets in other part of the world to search for new wealth and interest.Much more countries nowadays have opted for a relatively liberal trade policy to attract foreign investment.They also sign agreements with other nations or international trade organizations to achieve the goal of mutual benefits.

3.Growth in trade

It is known that each country has its own characteristics on resources and labor force，as well as its own merits and drawbacks compared with other countries.Hence，one country needs to absorb the superiority of other countries to make up their own inferiority，and vis-à-vis.The complementary between countries generates trade.Meanwhile，countries improve domestic economic status through trade，which basically promote the process of the globalization.

Ⅲ.Rethinking global business strategy

In terms of influence on humans and global sustainable development that electronic industry brings along，we may conclude three suggestions.

a.Constitute national sustainable development strategy of electronic products

Chinese Government should constitute a sustainable development strategy for electronic products.Enterprises are likely to strengthen the eco-design and production practice through expanding investment and reforming production techniques.Governments can take advantage of financial support to encourage the study and production of environmentally-friendly products.Moreover，government can conduct tax preference on products what implement international standards for eco-design certification.It may also set up fund to promote electronic industry to develop with a “greening” mode.

b.National electronic waste strategy

Chinese Government should further strengthen the management of electronic waste recovery and disposal based on existed government regulations，and clearly state responsibilities.

c.Establish sustainable international plans for electronic waste management

Chinese Government should establish a set of global and regional sustainable systems for transboundary movement and disposal of electronic waste in conjunction with international organizations.

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