THE GLOBAL MARKETPLACE 6
Small businesses have a higher likelihood of success in the globalmarketplace. The development and emergence of new technologies havemade venturing into new and overseas markets easier. As a result, itwill be cheaper and simpler for small businesses to introduce theirproducts globally without the requirement for large investment.Since, business will be largely online, it will become easier to testnew ideas at reduced risks, making it possible for small businessesto flourish. For instance, improvements in mobile technologies meansthat more people from all over the world are able to shop for goodsand services online. The advantage with mobile technologies is thatit equalizes both large and small businesses, because providedcustomers like a product they are less likely to care about the sizeof the company making and selling the product. This limits thebarriers of entry into global markets for small businesses.
Issues surrounding the use of outsourcing as well as off-shoring bysmall companies include the fact that both are no longer a means ofgetting cheap labor, and there are many disadvantages of distance.Research shows that “off shoring in its traditional sense, insearch of cheaper labor anywhere on the globe, is maturing, tailingoff to some extent being reversed” (The Economist, 2013).Hence, as small firms aim to venture into global markets, they willhave to deal with increasing labor costs in overseas nations. Also,distance results in an increase in costs such as the shipping ofproducts to other nations. Goods might spend a lot of time intransit. There is also a threat that small firms might lose theirproperty. For instance, assuming that a firm invests in a country,which later goes into war, the small firm may not have the neededresources at the moment to secure its property.
The responsibility of a Christian as a small business owner in theglobal marketplace is to uphold corporate social responsibility(CSR). The significance of CSR is rising in the current businessworld. There are many social movements endeavoring to compelcompanies to conduct business responsibly and transparently. CSRsimply means doing business in the right way, by putting intoconsideration all the ethical requirements of operation. It coversissues like customer satisfaction, preserving the environment, humanrights and working conditions among others. The escalation inbusiness scandals means that many businesses are inconsiderate toCSR. As a result, consumers have become more conscious to the ethicsof companies they choose to buy products or services from.
Research indicates that above 88% of consumers argue that companiesmust endeavor to meet the goals of their business, and at the sametime work towards improving their society and surrounding(Epstein-Reeves, 2010). In addition, 83% of customers supposed thatcompanies have the responsibility of supporting charities and well asnongovernmental organizations through financial aid (Epstein-Reeves,2010). The statistics are a clear indication that CSR is veryimportant for any business. In specific, a Christian should endeavorto ensure that their business demonstrates such stewardship asadvocated for by CSR. The Christian must demonstrate to the world,through the business, adherence to all ethical requirements, businesslaws and show an initiative to give back as is expected ofChristians.
Globalization refers to the process that makes it possible formarkets to integrate globally. In the previous 60 years, it has beenon the rise due to the emergence of advent technologies, which havecaused a decline in business transaction and transport expenses(Spence, 2011). As a result, globalization has reduced the barriersto global trade. This in turn has made it possible for developingnations, like India and China, to become larger and wealthier as theyventure into the same markets as developed countries. The developingcountries are now capable of creating high value added goods, whichprior to globalization were a preserve of developed economies(Spence, 2011).
The rising economies are also able to compete in regions wheredeveloped nations were previously dominant, like in manufacturing,information technology as well as pharmaceuticals among othersectors. Consequently, developed countries employment opportunitiesare changing from business sectors that are currently experiencinggrowth. This means that developed economies are facing enhancingincome as well as employment differences. The well learned employeesnow have more employment opportunities, while those that have minimaleducation are experiencing a drop in employment chances thatresonates to stagnant incomes (Spence, 2011). For example, due toglobalization, “the US employment economic structure has beenshifting away from the tradable sector toward the non-tradablesector” (Spence, 2011). Such a shift causes a decline in employmentas the non-tradable sector is probable to have fewer employmentopportunities in prospect.
Many corporations have devised ways to zero rate the amount of taxthey should pay. As a result, they are not obliged to report theirincome in America because they have created foreign subsidiaries,which are responsible for making raw materials in nation that havelow tax rates. An illustration is Apple, which is the globe’s mainprofitable company. It “does not design iPhones in America. It doesnot run Apple Care customer service from the city, and it does notmanufacture Mac Books or iPads anywhere nearby” (Duhigg &Kocieniewski, 2012). As a result, the subsidiaries are able to makehuge profits that escape American taxes, provided the profit isretained in the foreign nations.
A CEO of a company has the moral and ethical responsibilities ofensuring that the business is legally compliant, the products andservices delivered meet quality standards, ensure the safety andsecurity of workers and maintain professionalism.
Legally compliant – the CEO should be aware of all the legalrequirements of doing business within and outside the country ofoperation. This avoids legal violations that might be costly for anorganization. It is important that the CEO passes such knowledge tothe workers to ensure that they do not engage in illegal businessactions. Products and services – customers are very conscious ofthe goods or services they purchase from a company. Hence, the CEO isobliged to ensure that they meet quality standards and are thus safeto use. For instance, in a pharmaceutical company, the CEO mustensure the drugs produced are effective in curing diseases, and theydo not worsen a health condition. Safety and security of workers –the CEO is responsible for ensuring that employees work in favorableenvironments. He or she should guarantee should put in place rules tosafeguard workers from avoidable accidents while in duty.Professionalism – the CEO acts as the corporation’s role model.As such, he or she should act in manners that do not harm thecompany’s reputation. This way, junior employees will learn aboutthe expected code of ethics from their leader.
Duhigg, C., & Kocieniewski, D. (2012). How Apple sidestepsbillions in taxes. The New York Times. Retrieved from:http://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html?_r=0
Epstein-Reeves, J. (2010). Consumers overwhelmingly want CSR. Forbes.Retrieved from:http://www.forbes.com/sites/csr/2010/12/15/new-study-consumers-demand-companies-implement-csr-programs/#1c87af5f5e1d
Spence, M. (2011). Globalization’s impact on income and employment.Asia-Pacific Housing Journal, 74 – 79. Retrieved from:http://www.ghbhomecenter.com/journal/fileupload/1504Apr12xdkU2CZ.74-79_Globalizations%20impact%20on%20income%20and%20employment.pdf
The Economist. (2013). Here, there and everywhere. Retrievedfrom:http://www.economist.com/news/special-report/21569572-after-decades-sending-work-across-world-companies-are-rethinking-their-offshoring