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The fast moving pace of globalization and economic integration has been a reality of life for many decades, helping some individuals in advanced and developing countries, while perhaps preventing others from these benefits. Regardless of its consequences, the modern and future workforce must be prepared for international business and for effectively working with diverse colleagues, vendors, and customers as expatriate professionals in whatever culture or country they are needed.
Most university students take courses related to international business, globalization and international management topics as part of their academic journey. Do these courses make a difference? Are they really needed?
Based on realities of the modern workplace, the answer is a definite yes that these topics are needed and they do make a positive difference in preparing professionals for today's diverse workforce. The more we learn about globalization trends as well as other countries' rules, regulations, cultural ideologies, and policies the more effective we will be in forecasting accurate strategies, while better understanding people's needs and successfully working with colleagues and customers from different nations. Regardless of whether your company is doing business in other countries and nations, you can be sure that other firms from across national borders will eventually become your competitor. So, it is best to be proactively prepared for international business and global management challenges. Besides, learning about international management and cultural differences can be enriching and "loads" of fun!
Globalization and different growth rates around the world along with shifting demographics are altering the distribution of economic power among regions and continents. In the years to come, we know that China's population and steady growth will make it the largest economic power in the world by 2030. Similarly, India will be a country with the largest population in the world, and other emerging markets like Mexico, Pakistan, and Indonesia will also become important economic players. Due to the widespread availability of technology and more affluence, international trade and investment have been increasing dramatically over the years. Multinational corporations (MNCs) from advanced and emerging markets are growing rapidly and expanding their reach around the world (Luthans and Doh, 2015). The internationalization of nearly all business has arrived since anyone can buy or sell anything from anywhere in the world using modern technology, financial institutions, and delivery infrastructure. Firms and future expatriate professionals must prepare for it, or competitors will drive them out of business.
Economic integration and the rapid growth of emerging markets are creating a shifting international economic landscape; the developing and emerging countries of the world are now predicted to occupy increasingly dominant roles. The next eleven (N-11) countries that may constitute the next wave of emerging markets growth will probably include Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam. Furthermore, with their growing populations, some of the Middle Eastern and African countries could also constitute the next wave of dynamic emerging markets. As nations become more affluent, they begin looking for countries with economic growth potential where they can invest. An emerging global community is becoming increasingly interdependent economically (Luthans and Doh, 2015).
Different economic systems characterize different countries and regions. These systems, which include market, command, and mixed economies, are represented in different nations around the world and have changed as economic conditions have evolved. Because of globalization, economic integrations have become common and examples can be seen from the North American Free Trade Agreement (NAFTA), the Central American Free Trade Agreement (CAFTA), the European Union (EU), the Trans-Pacific Partnership (TPP), the Free Trade Agreement of the Americas (FTAA), and the Association of Southeast Asian Nations (ASEAN). ASEAN went into effect in 2015, and it includes Indonesia, Malaysia, the Philippines, Singapore, Brunei, Thailand, Cambodia, Myanmar, and Vietnam.
When nations become more prosperous over time, trade would automatically increase to satisfy people's desires and wants. Countries that were economically on the rise during the 1950s included China, Soviet Union, India, United States, Japan, Indonesia, Germany, Brazil, United Kingdom, Italy, France and Bangladesh. However, after 100 years, countries that are projected to be on the rise in 2050 include India, China, United States, Indonesia, Pakistan, Ethiopia, Nigeria, Brazil, Bangladesh, Philippines, Mexico, and Congo. As you can see, countries like Japan, Germany, United Kingdom, Italy, and France are not expected to continue developing internally. As such, the leaders of these countries will have to prepare their workforce for venturing out toward diversity in their populations, international business and opportunities in other locations. These changes mean that businesses and national leaders will have to prepare their workforce to take advantage of opportunities in countries that they may not have looked into for investment opportunities in the past.
Regardless of a country's political and cultural ideologues, there are some universal principles that all nations and expatriates must keep in mind. The principle of sovereignty means that governments have the right to rule themselves as they see fit for their economy and citizens. Therefore, one country's court system cannot be used to rectify injustices or impose penalties in another country unless that country agrees. As such, expatriates employees and international managers must be very careful when it comes to commenting on and criticizing the leaders and politicians of foreign countries. Furthermore, the doctrine of comity holds that there must be mutual respect for the laws, institutions, and governments of other countries in matters that are specific to jurisdiction over their own citizens and economy (Luthans and Doh, 2015). Consequently, when you become an expatriate, respect for the local norms and traditions becomes an important element of successfully being involved in international business and cross-cultural management practices.
As emphasized by modern global experts, doing business through trade, outsourcing or offshoring in foreign countries cannot happen without learning about and trying to understand the local laws, political environments, customs, cultures, and work habits of people in that economy. Similarly, expatriates working abroad must also develop excellent international management leadership styles that are aligned with local norms and practices.
For more information, see the video presentation on Globalization and International Business Trends
References:
1. Gable, W. and Ellig, J. (1993). Introduction to Market-Based Management. Fairfax, VA: Center for Market Processes.
2. Luthans, Fred and Doh, Jonathan P. (2015). International Management: Culture, Strategy, and Behavior, 9th edition. McGraw-Hill: New York.
3. Mujtaba, B. G. (2014). Managerial Skills and Practices for Global Leadership. ILEAD Academy: Davie, Florida.
Bahaudin Mujtaba is a Professor of Management at the Huizenga College of Business and Entrepreneurship. He is a researcher and author who teaches leadership, international business, HRM and management. He can be reached at mujtaba@nova.edu.