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8/8/2019 Bridging the Gap - Chris
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Bridging the Gap between Internationalization and Globalization
Global as an extension of internationalization (time, history, wide, scope)
Globalization is a trend characterized by denationalization (national boundaries
becoming less relevant) and is different from internationalization (entities cooperatingacross national boundaries). The greater interdependence that globalization is causing
means an increasingly freer flow of goods, services, money, people, and ideas across
national borders. (Wild et al, 2010 pg.34)
The business world has been developing steadily over the last hundred years from
what was localized to what is now considered more globalized. This trend is set to
continue in the same vein on into the future. However business practices did not just
jump from being localized to being globalized. Business developed into globalization
from internationalization. Internationalization is the process of increasing
involvement in international operations. A review of research on internationalization
of firms shows a sequential, stepwise process of development up to the mid-1970s.
More recently, there has been a departure from this pattern as some companiesattempt to bypass the steps to deeper commitment, resulting in a speeding up of the
entire process. Generally, internationalization can be expected to be linked to
developments along each of the following dimensions: 1. the operation method (how),
2. sales objects (what), 3. target markets (where), 4. organizational capacity, 5.
personnel, 6. organizational structure, and 7. finance. Factors that help to explain the
continued forward momentum of the internationalization process of individual
companies are: 1. resources availability, 2. knowledge development, 3.
communication networks, 4. risk and uncertainty, 5. control, and 6. commitment.
(Welch and Luostarinen, 1988)
The continual advance of internationalization where raw materials, services,
completed and semi-completed products and goods, currency, people, and ideas have
increased and diversified, further drives on the advance to globalization. Reaching
ever more remote locations around the world increasingly even small to medium sized
business are expanding toward globalization.
For centuries, people have traded goods and services across nations and have moved
from one country to another, with or without force. In modern capitalism,
internationalization took shape through the conquest of colonies and the rise of
mercantilism. In 1972, George Modelski used the term globalisation to refer
explicitly to European-led expansion to gain control over other communities in the
world and integrate these into one global trading system. (Boyer and Drache, 1998
pg. 68)It was with the coining of the term by Modelski that gave rise to business interest in
potential growth by globalizing their operations rather than just internationalizing. As
every country and their individual economies have benefits and deficientcies for
business compared to others, the search for more efficient business operations will
follow the global route into the future.
8/8/2019 Bridging the Gap - Chris
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Boyer, R. Drache, D., 1998. States Against Markets: The Limits of Globalization.
New York, New York: Routledge.
Welch, L. & Luostarinen, R., 1988. Internationalization: Evolution of a Concept. ,14(2), p.34-55. Available at: http://search.ebscohost.com/login.aspx?
direct=true&db=bth&AN=11480350&site=ehost-live [Accessed October 10, 2010].
Wild, J. Wild, K. and Han, J., 2010.International Business: The Challenges of
Globalization. 5th ed. Upper Saddle River, New Jersey: Prentice Hall.
http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-livehttp://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-livehttp://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-livehttp://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-live