Many business firms exist in every country and each of them usually starts out as a small firm within its familiar home environment. They operate within their country surrounding, which is usually well known to them. Within the home environment, they have proper knowledge of the strategies to use for attracting and retaining customers. They are well aware of their customers’ likes and dislikes and know how to improve their production scales in order to meet the customer’s demand and supply. With all this knowledge, the firms easily maintain a large following of customers who are loyal to the company due to their unrivaled customer satisfaction.
Once such firms realize success at home, the next move is to make their operation international. They start pondering how to globalize their business operations. Globalization of business refers to the process in which a company makes its products and services present in the global market. This means that the company expands its selling territories to other countries around the world (Passaris, 2006). Business globalization occurs in a broader perspective and has different impacts on the firm. It refers to the act of making sure that goods and services produced in one region are available to the rest of the world. For example, McDonald’s pizza was originally produced in America but the stores are now all over the globe.
Globalization also refers to the mobility as well as the availability of technology and capital throughout the globe. Globalization has been an important factor in connecting many countries around the world. As a result, different issues concerning relating to technology, culture, politics, economics, ethics, human resource management, and the environment are investigated from a wider global perspective instead of the narrower regional or national perspectives to which we have become accustomed. (Passaris, 2006).
This is a research paper on a china study tour. It seeks to find out how developments in technology, communication, and transportation have tremendously increased the level of business globalization. The paper also seeks to exhaust different learning activities concerning the experiential study tour in china by answering various questions.
The Study of Globalization of Business
This research work seeks to find out how business operations are carried out in China. The research will also show the level to which China has embraced globalization of their businesses. The influence of western countries, such as Australia in the internationalization of businesses in China also takes a center stage (Passaris, 2006). China, just like many other nations based its business operation within its territories, as time went by and many changes, such as new knowledge in business practices and technological advancement evolved, the country had to change business operation tactics. One of those strategies included ways in which goods and services produced in the country could be made available in other countries. This meant that China had to start trading with other countries. It had to be involved in international trade. Taking part in international trade meant signing trade agreements with countries in the European Union, such as Australia.
Chinese businesspersons and women knew that for them to succeed in globalizing their business operations, they had to be smart and get the right information. During the study, the student visited many Chinese firms that engage in international operations. They found out from the operations manager and other management teams that before they could become international, they had to do a lot of market analysis. The market evaluation was important because it allowed the companies to determine their target customers (Liu, Pfoertsch, Xin & Yeung, 2011). Thus, they would know what type of people liked their products and would be willing to consume them.
This evaluation was of importance since it also enabled the firms in China to explore the technological, political, cultural, ethical, environmental, human resource, and economical factors and how they influence trade in the intended countries. Customer satisfaction became another important factor in the analysis of the global business environment by Chinese companies. The achievement of customer satisfaction results from the way a company meets the demands of the customers. The firms viewed environmental analysis as an important factor as it would aid them in making decisions concerning employees and the production of goods in the destined country (Liu et l, 2011). Companies are usually advised to make use of as much local labor force as possible. Some countries do not allow foreign companies to outsource their labor from their home nation.
The students found out that apart from exporting goods to other countries and importing products from other nations, trade internationalization in China involved the availability and improvement of communication and means of transport. During the tour, students visited several companies and had talks with the chief executive officers as well as stakeholders. They discovered that most companies in China decided to explore the international market, such as Australia to make more profit. According to Nolan (2004), China suddenly realized that they were producing more superior products and services as compared to other countries in Asia.
They had a feeling that most people in other markets outside their nation would like to use the products as well. Therefore, most businesses decided to get out of their comfort zones and pursue more challenging international business opportunities. Until 2001, the study revealed that the Chinese firms have been bursting in the glory of their local success. They were not keen nor focused in venturing into other territories. The sudden change into global participation came due to the need to diversify and reach a large audience (Nolan, 2004). China is also known for other beneficial products that most people in different would benefit from.
The study discovered that there are many Chinese companies operating abroad. They found out that many of these firms are located in the Asian region. China also trades with Australia through exchanges of goods and services by importing from and exporting to the nation. The study indicated that China was initially adamant in participating in international trade just like other nations that are successful in this area (Liu et al, 2011). The fear for involvement in the globalization of businesses had its roots in the requirement and lack of knowledge. For example, China business firms still thought localizing their business operation would improve production and reduce competition. They were as well weary of the strict demand for cross-border trade. They also thought that allowing foreign companies to operate in their countries would jeopardize their levels of operations.
The trade ties between China and Australia began back in 1972 when the Australians recognized the economic and business opportunities they would reap through forming trade unions with China. The two countries started trading on small scale since then research shows that the business relations between China and Australia have become very solid. This success did not happen easily. China was then considered a developing country with myriads of business opportunities (Vigfusdottir, 2008). However, they had to enter a trade agreement with Australia in order to start proper business deals. There were challenges, such as cross-border restrictions, tariffs, political, social, and cultural influences between the two countries that needed urgent consideration before any business operations could start.
The business legends in China revealed that they had many failed negotiations with the Australian business fraternity before they could finally come to an agreement. This is because some rules had to be removed and others altered from both sides in order for the operation to take place smoothly. None of the countries was ready to relinquish total power involving business negotiations to the other (Vigfusdottir, 2008). China wanted to take total control of its operations in Australia and Australia wanted the same in China. Finally, an agreement was reached in 2005 through the formation of a trade agreement.
In the agreement, each country agreed to ease its stance on foreign businesses operating within their environment. The tariffs that caused barriers to free trade between the two nations were elevated and were no longer a hindrance to business. The issue of cross-border restrictions that touched on the entry and exit of goods and services into these countries was also discussed. It was agreed that there would be ease of access of the border entrance to companies from both sides (Harcourt, 2013). However, this had to be done under a stringent measure to avoid the entry of other illegal goods from shrewd citizens from either country.
The two nations also accepted to reduce or totally get rid of regulatory barriers, which hindered services to support improved trade operations across goods and services that were beneficial to the economies of the two nations. They as well agreed to implement strategies that encourage more foreign investment between Australia and China. This move would provide a strong foundation for their future economic relationship (Passaris, 2006). The two countries knew that there was an issue of taxes to be discussed during the negotiations. For example, by the end of the agreement, it should be clear to both sides how their imports and exports would be taxed. It was agreed that tax rates would definitely favor registered companies from both nations. This would increase their foreign earning and reduce expenses. Reduced taxes also meant that firms could export and import more. The agreement also considered the possibility of reducing customs in order to increase the amount of export and imports into both countries.
Thomas (2004) argues that bilateral trade between two countries is affected by many other factors. The students realized that even after signing the trade agreement between China and Australia, both countries had factors, such as society, culture, environment, and politics to contend with. Asked of how they overcame these unseen but important barriers to trade, most company managers said that they took one step at a time. Both countries and especially China was aware that Australia had a strong western culture and way of conducting business. Australians were as well aware of the rich Chinese cultural background. As such, they decided to analyze and take time to find out how each country carried out its operations.
The two countries easily adopted each other’s cultural ways of doing business. Eventually, cultural differences became a major reason for the two countries to do business together (Liu et al, 2011). Society determines how foreign goods and services, as well as foreign firms, will fare in the business environment abroad. The management of Chinese companies with affiliations in Australia stated that initially, it was a challenge dealing with Australians and vice versa. This is because firms from both sides thought that their products and services would trade well in new environments due to different cultural requirements. This was solved by the fact that there were immigrants from one country to the other (Schneider, 2009). This created a good customer base and way of influencing other members of the society to buy products from foreign companies.
China and Australia also ensured that this type of trade involved the import and export of goods and services whose demands were high and would be beneficial to people of other cultures. Such goods would include electronics, fabrics, and car body parts for assembling. The countries had no volatile political situation at the time of signing the agreement. In fact, the government warmly welcomes any business negotiation with many countries. They were ready to support international business ties, as they knew it would improve their economy. The government from both countries took part in signing the trade agreement. The reports showed that politics did not play any negative role in its achievements (Liu et al, 2011).
Another factor that firms from both nations considered were whether the Chinese and Australian environment was favorable for business. Thorough market research from both countries revealed that the intended market had enough clients and the business would easily flourish. The analysis revealed that most Australians were used to using products from the Chinese market and the same was true in the country of China. The Chinese researcher also found out that there were many Chinese migrants in Australia and Australian migrants in China. Therefore, this would help in eradicating language barriers and ease communication in both countries for global business developments (Schneider, 2009). Secondly as said earlier, both countries took pride in producing high-quality goods that the whole society would utilize irrespective of one’s nationality.
Concerning the matter of productions, the students learned during the study that the countries agreed to take care of their own productions in the foreign countries under certain conditions. These include the agreement that productions are done by the Chinese firms in Australia would be foreseen by an Australian nationality working with the companies. China would also appoint a Chinese to monitor production operations in the Australian companies. It was also agreed that each foreign firm would provide local but not foreign labor (Schneider, 2009). This was aimed at creating job opportunities for benefiting people in either country. Outsourcing labor was not allowed under any circumstance and doing this would ruin the relationship between the two nations. Each country was however allowed to send a given number of expatriates into the other country to evaluate business operations. The expatriates also had the right to carry out investigations in their firms without interfering with operations in local firms. The free trade agreement signed between China and Australia also allowed a Foreign Direct Investment (FDI) into each other’s territories. This meant that any authorized company from both countries could directly invest in each country without going through rigorous procedures that could delay investment opportunities.
Benefits of Business Relations between China and Australia
Whenever two or more countries decide to enter into trade relations, they do so with an aim of meeting various expectations. First, Australia realized that entering into business relations with China would be of important economic benefits (Harcourt, 2013). China also saw this as an economic development opportunity. Research into secondary materials indicated to the students that both countries and especially China were thrilled with the foreign earning that international trade between her and Australia would bring into her nation. This is true because the Australian currency is much stronger than the Chinese Yuan, meaning more money for other uses. Australia was also happy about the economic development from the Chinese currency, which would add to their local earnings (Harcourt, 2013). Thus, each country had the opportunity to earn foreign currency and increase its economic standing.
A study into the trade negotiations and business operations shows that the business relations between China and Australia have brought about important technological advances in both countries. Australia is still a developed country with many opportunities for technological development. China on the other hand was a developing country with massive abilities to develop such technologies. This business merger leads to technological advances by making both countries producers and beneficiaries of technology (Vigfusdottir, 2008). Australia had the resources while China had the knowledge. It is clear that currently, both countries are enjoying massive improvement in technology with China producing many electronics.
The development in technology has also brought about the creation of jobs for citizens of both countries. People in both China and Australia had the opportunity to be working in foreign firms. They got jobs as managers, productions analyst, procurement, clearing and forwarding, and human resources management among many titles. They also worked in companies that produce different technology products (Drysdale, 2012). The job opportunities increased government revenues in each country through income taxes from the citizens. This also improved people’s standards of living. The life of the citizens was made better by purchasing and using technological products, such as mobile phones, and other appliances that provided a wider amount of information for them.
The business relation increased the exportation of other products like jewelry from China to Australia. China is also rich in classic fabrics that are not found in Australia. This export of fabrics and jewelry has increased development in the fashion industry. This has also improved the living standards of the people who are fashion-forward and can afford high fashion garments and expensive jewelry (Drysdale, 2012). China is also known to be good at assembling motorcycles and motor vehicles. Therefore, it can easily export these commodities to Australia.
Australia on the other hand has some of the best academic institutions in the world. The trade relations between her and China also opened an academic door for Chinese nationals who would want to achieve higher and quality learning. Through such interactions, Australians learn Chinese culture as the country earns foreign exchange through fees paid by the students. Apart from better academic institutions, Australia has the most untamed wildlife and beautiful natural sceneries (Thomas, 2004). As such, the globalization of business allows Chinese and other people to visit this country as a tourist destination. Therefore, the trade agreement between these two nations also improved tourism activities in Australia. This has also lead to increased government earnings through the tourism sectors. It has as well ensured proper market and development within this famous country.
The students learned that business relations between these two countries have also improved the means of communication in either of them. As said earlier, China is an expert in developing communication gadgets, such as mobile phones and other tools that can be used for online communication. This has improved modes of communication in the two countries and with the rest of the world. During the research, the student discovered that the means of transport in both countries have also improved. This came due to the increased revenues that either country earns from the business transactions. Liu et al (2011) state that infrastructure in both countries improved significantly since they started doing business together.
Conclusion
During the study, the students learned that there is a very important relationship between global and national business. Normally, most businesses that globalize their operations start from local to national level. Globalization of business comes from the knowledge gathered by the local managers, stakeholders, human resources, and other employees within the local business firms. The student also learned that culture should not be a hindrance to doing business in any country as long as each country and people are open to diversity. The study in China revealed that a country’s economy could greatly improve based on international business relations. They also thought that such a trade agreement should serve as a good example to other Asian countries that have solely localized their operations. It should give them a reason to think of globalizing their businesses.
References
Drysdale, P. (2012). APEC and liberalization of the Chinese economy. ANU Press
Harcourt, T. (2013). China’s economic ties put Australia in the right place. Retrieved from http://www.abc.net.au/unleashed/4617438.html
Liu, C., Pfoertsch, L., Xin, M. & Yeung, D. (2011). The globalization of Chinese Companies: Strategies for conquering international markets. New York, NY: John Willey & Sons
Nolan, P. (. (2004). Transforming China: globalization, transition, and development. Anthem Press
Passaris, E. (2006).The business of globalization and the globalization of business. Journal of comparative international management. University of New Brunswick, Canada. Retrieved from http://journals.hil.unb.ca/index.php/jcim/article/view/5666/10661
Schneider, S. (2009). Working papers: 1. The rise of China – 2. Is protectionism still alive in a globalized world? – 3. US under Bush II – empire Or hegemony? China: Books on Demand
Thomas, N. (2004). Re-orienting Australia-China relations: 1972 to the Present. Aldershot, UK: Ashgate publishers.
Vigfusdottir, H. (2008). A free trade agreement between Australia and China. Retrieved from http://skemman.is/stream/get/1946/3327/10434/1/Heidur_Vigfusdottir_fixed.pdf