Impact Of International Business On Different Stakeholders Business Essay

To which extent a company can standardize its offerings/ functions in international business. Businesses might be tempted to standardize their products/services for cost-containment, but highly standardized products are unlikely to become financially beneficial. Performance of an extremely standardized firm might be higher, for a huge firm offering homogeneous product, have a strong global market presence, Douglas & Breeze (2001) e. g. CSD companies [Coke, Pepsi], aircraft supplier and IT businesses. Standardization is affected by factors like social variety, convergence of market, and economies of level of R&D and Creation (Solberg, 2000). Globalization propelled export to a higher volume for almost all of the firms, which in turn gives improve the question between standardized vs designed export strategy (Shoham, 1999). Product/distribution strategy, price, and environmental conditions affect the extent of standardization of a company, Shoham(ibid).

Impact of international business on different stakeholders of the firm

Environmental factors oft eh marketplace, like geography, market condition; political/legal environment, organisational factors, customer-choice and characteristics of the product/service have effect on the firm's international business, Shoham (ibid). IT businesses are geographically sent out and empowered by virtual structure (Brooks, 2009). They operate within an almost edgeless manner, with permeable and constantly changing interfaces between company, dealer and customers. IT firms involve some basic structural specialties - a) decentralization, b) leaner framework with less hierarchical layers, c) restrictions are fuzzy and obsolete, d) increased routinisation of same jobs [standardization], Brooks(ibid). Now, let us analyze impact of globalization on different stakeholders of the IT firm.


Globalization of IT-market became significant during the Y-2K bug, past due nineties. Before that traders need to consider the chance assessment of these local marketplaces while taking the investment decisions. Nowadays it became global so investors need to consider and look at the politics and socio-economic conditions of the mark market. Economies of size Douglas & Wind flow (ibid) has performed a key role in increasing the IT market towards producing economies like China, India when Western [mostly US and European union firms] began to endeavor into this geography to get benefit from cheaper labor cost. The cultural difference was huge and combined with different political situation [shortage of democracy in some parts], terrorism effects [e. g. India], politics turmoil etc all need to be considered. Environmental factors, (Mintzberg and Waters, 1985) in such areas play an essential role - lack of stringent labor rule, quality control conditions, insufficient proper infrastructure and politics disturbance all these effect in shaping the investment strategy. Stakeholder theory (Donaldson and Preston, 1995) stresses on considering all stakeholders [in the surroundings in which company performs - not only the shareholders' interest] strategy-making.

Staff - global and local

We have both local personnel [mainly US, EU areas] and global staff [mainly Indian, Chinese language, East-European]. Local staff experience more close cooperation with the global counterparts- ethnical difference is a major challenge. Apart from the time-difference which poses a huge challenge to IT personnel at the same time is provides it border in the terms of smooth service throughout the clock. The physical distance [between local and global functions] and unknown region where procedure is being transferred initially pose an issue to local-staff. Due to cost-containment efforts MNCs used to outsource their BPOs to Expanding countries so the local staff encountered the challenge of job-cut hence the globalization at some point was recognized by the neighborhood staff a threat with their job. The global-staff on the other side has been affected by different time-zone and acquired to improve their working style [transfer timings/night shift, they need to adapt their holiday calendar to be in-line with their offshore counter-parts. Globalization from it develops an enormous job market in the developing countries and unveiled an improved lifestyle/working environment. Work-environment has been shifted towards networked, electronic, Brooks (ibid).


Customers to IT companies also influenced by the globalization - most important are data security and security of customer-sensitive data. European union directive restricts customer data to be taken out of the EU-zone [e. g. to the just offshore location in India] and imposes strict measures to ensure customer data is well-protected against cyber-crimes. The benefits that customers [of IT organizations] are receiving are the lower cost of operation due to economies of scale Douglas & Breeze (ibid) and ongoing (24*7) support by both just offshore [global support-centres] and onsite [local to customer's location] IT personnel. This helps customers twofold - they can channelize their preserved money towards newer product development and provide more smooth service to their customers.


Globalization than it firms require newer infrastructure to develop in the new operation-countries, which straight increases its real-estate and construction markets. Apart from that Phone industry of the growing country gets benefits by increased use of the facilities. The mind-boggling need of human resources for IT firms comes with an positive effect on the job-market of developing countries and the inflow of foreign currencies in tern boosts the internal current economic climate too -e. g. the buyer product market, the car and real-estate market and tourism. Federal among the key facilitator, helps IT organizations in establishing their operation, introducing SEZs and itself gets benefitted by increased work rate, forex-inflow.

Business environment

Business doesn't appear in vacuum (Parry et al, 2007), the surroundings where it manages and the time has an essential role. Global business environment is becoming highly complicated and unstable. Leadership need to examine firms' functions, changes in business conditions, the competitive and regulatory environment, and consumer behavior, Shoham (ibid). Complying to ever before changing regulatory requirements [both onsite and offshore] is a true task to IT businesses, for example a IT organization need to meet up with the SOX requirements though they have its operation propagate across global-market. Global IT solid need to be responsive to exterior factors [e. g. politics, regulatory, technological or customer-demand] and devise their approach accordingly- a deliberate emergent methodology where decision is being made considering the responses from external-factors is needed, Mintzberg and Waters (ibid).



Rivalry is having negative impact of industry success as price-competition transfers profit directly from industry to its customers (Porter, 2008/1979). Price discounting is one form of rivalry that this firms face through the increasing challenge of globalization.

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