International Trade Government Involvement

Impact of Government Involvement in International Trade

International trade can be described as the exchange of services and goods between countries, which gives rise to a world economy where prices are affected by global occurrences (Ajami & Goddard, 2013).  As indicated by (Wild & Wild, 2013, p. 123), international trade has the benefit of offering people in different countries a more expansive selection of goods and services at competitive prices.

Given that the idea of international trade has dominated business scholarship for some time, differing opinions exist on whether the international trade should adopt a free trade approach or opt for a protectionist approach. Free trade, in this regard, implies the application of a laissez-faire style of commerce, without market restrictions. The central concept in the international free trade is that demand and supply factors, applied on a global level, ensure efficient production, requiring nothing to be done to either promote or protect business growth. In contrast, the philosophy of protectionism insists on the importance regulating trade to ensure proper functioning of markets. Proponents of protectionism hold that certain market inefficiencies can impede the benefits of international trade, thereby requiring the application of mechanisms to guide the market accordingly. This paper explores the primary motives of government interventions and critically analyzes the consequences of the methods of intervention.

Government intervention in international trade has had a significant impact on trade patterns. Unfair government intervention practices thus have had lasting negative lasing impacts on global economics. This paper looks at the global political economy, reasons for governments to intervene in international trade, consequences of government involvement and ways to prompt the global economy despite the political influence.

The Motives for Government Trade Intervention

Though free trade implies the pattern of exports and imports without any barriers, most governments impose controls on trade for cultural, economic and political reasons. While political motivations include protection of jobs, preservation of national security, response to apparently unfair trade practices of other nations and the quest for influence over other countries, the economic motives include the protection of infant industries and pursuance of strategic trade policy.

Political Motivation: One category of reasons offered for government intervention is political. Most of the political motivations for government interventions are connected to the need for the government to remain popular among its citizens. As indicated by Ajami and Goddard (2013), the political motivations may have little or nothing to do with the economic performance of the country (p. 21).

One such political motive is to protect jobs and, therefore, prevent an increase in unemployment levels. The idea informs the motive for restricting trade to protect jobs that international trade lowers the number of jobs available locally for the citizens of a country (Wild & Wild, 2013, p. 132). Though this may be true for certain industries, studies have established that trade does not necessarily reduce jobs, since business offers consumers a chance to purchase products at competitive prices, which, subsequently enables them to buy more goods and services. Given that most of the products are locally produced, the enhanced purchasing power of the consumer is likely to stimulate the creation of jobs internationally and locally. Moreover, the protection of certain jobs may not be entirely beneficial, and has been shown to lower economic efficiency. According to Silva, Afonso and Africano (2010), an economy can function at maximum efficiency only when its labor force is mobile, and people are willing to alternate jobs need arises (p. 369). Governments must acknowledge that the nature of the economy and, consequently, jobs are constantly metamorphosing, meaning that even their labor force must be flexible and ready to change.

Another political reason often offered for government restriction of trade is national security interests. According to Ajami and Goddard (2013), the argument of national security is often a legitimate argument, especially when it concerns the production of weapons and printing of domestic currency (p. 34).  Consequently, industries that are pivotal to national security are offered protection by governments for both imports and exports.

Governments can, for instance, place restrictions on imports to guarantee domestic supply which preserves national security. It is important to note that national security as it is used here is not exclusive to issues of war and armed security. Rather, the concept of national security implies those goods and services that are critical for the wellbeing of the citizens of the country, including currency, agricultural products, oil, and weaponry. For instance, many countries actively protect their agricultural sectors since countries that depend on agricultural imports to feed their citizens risk starvation in the event of war. Governments also place restrictions on the export of defense-related goods, especially if such exports pose threats to international security.

The government can also restrict trade in response to apparent unfair trade practices by other nations. In situations where there is a feeling that their governments give certain industries an unfair advantage through subsidies or reduced restrictions, unilateral reduction in restrictions can be applied. For instance, Fertö and Hubbard (2003) show that, compared to industrialized countries, developing countries have significantly relaxed environmental laws, reducing the costs of operation (p. 245). Governments are often inclined to introduce trade restrictions especially in the face of restrictions by other countries.

Government Involvement in International Trade
Government Involvement in International Trade

States can also use trade restrictions to gain influence over other nations, especially the economically less developed. For instance, the China Uses trade interventions to increase its influence in Africa. The idea here is for an economically stronger country to use its position to influence less developed countries, which ultimately offer a market for its products.

Economic Motives: Besides the political reasons for governments’ intervention in trade, arguments are often fronted on the economic foundations for intervention. Some of the arguments from the economic perspective include the protection of infant industries and pursuance of strategic trade policy. The case for the protection of infant industries is often made so that young industries are protected by the government until they become self-sustaining (Silva, Afonso & Africano, 2010, p. 369).

However, it is not only infant industries that seek protection. According to Melitz (2003), some mature industries insist that they are protected to enable them to adapt to new business environments and conditions (p.1696). Nevertheless, the idea of protecting companies seems to go against the spirit of healthy competition that allows only the most successful businesses to be sustained. This presents problems to the government seeking to intervene on trade based on the argument of the infant industry. The first challenge would concern how to pick winners and reject losers. The idea also leaves room for people within the echelons of power to use that power to initiate protection for their companies. Besides, protection has the potential of encouraging complacency by domestic companies towards innovation and can limit company competitiveness.

Regarding the pursuance of strategic trade policy, government intervention can enable a company to enjoy the first-mover advantages and the subsequent economies of scale. The concept of first-mover advantage can be described as a type of competitive advantage that accompany attains by being the first entrant into an industry or a market (Fertö & Hubbard, 2003, p. 251). The understanding here is that, by being the first competitor in a new market, the firm can gain an advantage over its actual and future rivals. This idea applies whether a company is seeking to develop new demographic markets or sections of existent markets, or whether it is looking to introduce new products into its already existent market segments.

When a business is the first to enter a market, it can form a defensible ground, allowing it to capture the large sections of the market share quickly without being concerns about rivals competing for the same market. Also, by the time the competitors arrive, the first-mover is likely to have advantages in the competition because its products will have gained familiarity, besides other factors like brand loyalty established distribution systems. For instance, being a first-mover in soda production, Coca-Cola was able to develop its brand and build a reputable force in the beverage industry. The biggest problem with the strategic trade policy is that government support is often subject to political manipulation, and certain interest groups can usurp gains with no benefit to the consumer.

Cultural Motives: Cultures are created and modified through interactions. Consequently, the exposure of citizens of a country to other people and products from other nations can gradually alter the culture of a country. In this line of thought, the undesirable cultural influence caused by interaction with certain products can cause the government to block imports. The United State, for instance, is often perceived as a threat to national cultures due to its influential entertainment, consumer goods, and media.

Methods of Promoting Trade

Other than specialization and increased business potential, international trade has been linked to greater efficiency and greater opportunity for foreign direct investment. As described by Wang et al. (2012), foreign direct investment implies the amount of money invested by individuals and corporations in business as well as in research and development (p. 627). By attracting foreign direct investment, economies can grow in their level of competitiveness and production efficiency. For the receiving government, foreign direct investment is a way through which expertise and foreign exchange can enter the country, further stimulating economic growth. Given the importance of international trade to governments as well as consumers, various states adopt steps such as subsidies, export financing, foreign trade zones, and individual government agencies to encourage international trade.

Subsidies: For our purposes, a grant can be defined as financial assistance to domestic companies in the form of low-interest loans, cash payments, product price supports, or tax breaks. The primary intention of applying subsidies is to increase the advantage of the local companies and compete favorably with international firms. According to the World Trade Report (2006), export subsidies generate incentives for producers to supply products for export rather than for domestic use within a country (p. 56). This can be a drawback since the withdrawal of supply from the local market can lead to increases in the local price of the products. Simultaneously, due to increase in supply to the world market world prices of the product is likely to fall. If the re-importation of products from the world market into the domestic market is prevented, the result is a wedge between the world price and the local price. All the same, the impact of export subsidies on the domestic country is contrary, with local consumers having to pay higher for a product that they are prevented from sourcing from the world market as a lower price.

Export Financing: In export financing governments promote exports by assisting companies to finance their trade activities through loans as well as loan guarantees. Since funding is crucial, especially for entrants into the export business, the philosophy informing export financing is that by offering loans that would have otherwise been accessible of loans at reduced rates, the government can encourage export business, and enhance the competitive edge of the company. In the United States, for instance, export financing is offered by Export-Import Bank.

Foreign Trade Zones: A foreign trade zone is an area where goods can be landed, handled, reconfigured or manufactured, and even re-exported without going through customs authorities. The goods only become subject to the prevailing customs duties when they are moved to consumers in the country within which the zone is located. Organized in areas with various geographical advantages for international trade such as Singapore, Stockholm, Hong Kong, and Gdańsk, the primary purpose of the foreign trade zone is to eliminate seaport, border, and airport barriers to trade, often associated with complex customs regulations and high tariffs. Lowering customs facilitates international trade since customs duties elevate the cost of production as well as the time it takes for the products to reach the market. In the United States, for instance, the lowered customs duties are balanced by the created jobs.

Special Government Agencies: As a way of encouraging international trade, various governments create agencies charged with the promotion of exports. The agencies organize trips for business persons and trade officials to visit other nations and institute trade offices in other countries. These organizations, such as the Japan External Trade Organization not only promote exports but also occasionally encourage imports.

Trade Unions: Trade unions today play a critical part in moulding the lives of workers, though their influence has considerably diminished over the recent past. The union is often mandated to negotiate conditions and contracts with employers on behalf of the employee. Though the roles of trade unions are numerous, some being more prominent than others, the trade unions core functions can be summarized as social, militant, regulative, and fraternal. In this regards, the militant function implies the struggle that is likely to occur as the union tries to get employers to increase worker remuneration or to address the grievances presented by employees. The main issue addressed here is whether the perceptible incompatibility between industrial relations and employees can be resolved. Resolution of the conflict between trade unions and employers is only possible given the assumption that both parties share the objectives of employee development, fairness, and equity.

Unions need to acknowledge that collective bargaining may require some redesigning to include a lesser component increasing pay than in the past, and should push for involvement in skill-based and flexible elements of pay. Industrial relations remain the principal way of maintaining industrial order and should focus on approaches to avoiding and resolving disputes and conflicts.

Methods of Restricting Trade

Most governments restrict international trade to protect domestic companies from external competition, mostly from multinationals. One such method of restriction is through tariffs. Tariffs are taxes levied on imported products as they enter or leave the country. Tariffs can be categorized as import, transit and export. Import duties are further subcategorized into ad valorem, specific, and compound. An ad valorem tax is levied as a percentage of the cost of the imported good while specific tariff is levied according to each unit (by weight or number). On the other hand, the compound tax is levied as a percentage of the stated price of the imported product, and partly as a specific fee for each unit. According to Wild and Wild (2013), besides protecting local producers and employees from foreign competition, tariffs perform the function of raising revenue for the government (p. 232). Though domestic producers gain from import duties as they are shielded from foreign competition, this protection comes at a cost to the consumer. The consumers often have to pay more for some imported goods. Also, though the producers benefit from the lowered foreign competition, the lack of competitiveness may lead to laxity and reduced overall efficiency.

Quotas and Voluntary Export Restraints (VER): Quotas and Voluntary Export Restraints (VER) are restrictions directed towards the quantity of certain goods that can be imported into a country (Wild & Wild, 2013, p. 143). The quota limitation is usually imposed by allotting import licenses to a group of firms or individuals. The reason for issuance of allowances is to protect domestic producers by limiting the entry of certain goods into the country. This limitation enables local producers to maintain a considerable market share in to offer decent prices for their products within the country. Like in tariffs, the gain by producers comes at a cost to consumers, who have to contend with high prices caused by impeded competition. A VER, on the other hand, is a unique type of quota imposed by the exporting country upon the request of the government of the importing country. If the domestic producers do not limit production, consumers gain because of lowered prices from the increased supply. Other measures that can be applied by governments to restrict trade include embargoes, content requirements, administrative delays and even currency controls. Ultimately, the reasoning behind restrictions is to protect local companies from foreign competition and to ensure that the economic interests of the country are not ignored during the international trade.

Conclusion

Despite the theoretical benefits associated with international trade, governments are not always eager to openly welcome free trade at the expense of domestic businesses. This paper examined the reasons behind the government interventions to protect some of their local industries and the methods they use to offer such protection. Though it is evident from the analysis that many of the strategies like tariffs, the quota system, and subsidies appear to support domestic producers, this support often comes at a cost to the consumer, who often has to pay more for goods. Measures must be put in place to ensure that even in protecting the domestic companies, healthy competition that is important for production efficiency and reasonable pricing of products is not compromised.

References

Chaney, T. (2008). Distorted gravity: the intensive and extensive margins of international trade. American Economic Review, 98(4), 1707-21

Girma, S., Görg, H., & Wagner, J. (2009). Subsidies and exports in Germany, evidence from enterprise panel data. Applied Economics Quarterly, 55 (3), 175-195

Martincus, C. & Carballo, J., (2008). Is export promotion effective in developing countries? Firm-level evidence on the intensive and the extensive margins of exports. Journal of International Economics, 76, 89-106

Wang, C., Hong, J., Kafouros, M., & Wright, M. (2012). Exploring the role of government involvement in outward FDI from emerging economies. Journal of International Business Studies, 43(2012), 655-676

Wild, J., & Wild, K. (2013). International business: The challenges of globalization. Upper Saddle River, NJ: Pearson Education, Limited

World Trade Report. (2006). Exploring the links between subsidies, trade and the WTO. World Trade Organization

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Project Management Standardization

Standardization of Project Management

View This Dissertation Here

Poor project performance has led to industry calling for Standardized Project Management tools, yet it is the organizations themselves who have chosen to overlook or ignore the tools while implementing organization strategy that exists for their assistance. This paper investigates the implications change management practices have on individuals as a result of strategy change, whilst challenging the poor Project Management knowledge and understanding of individuals within project based organizations. It also identifies the currently poor application of Project Management theory including the alarming levels of academic qualifications many practicing Project Managers currently hold. The purpose of the dissertation was to explore this call for standardization by conducting a review of the knowledge, understanding and opinions of individuals regarding: change management implications of organization strategy implementation; and organizations? application of Project Management theory.

Project Management Standardization
Project Management Standardization

However, while conducting the review, offering discussion points or arguments, it is important to recognize when talking about Project Management Standardization, it is not an exact science and there are several fundamental floors such as the theory is relatively abstract and many parameters are difficult to be measured as they are usually based upon the opinion of industry personnel with predetermined beliefs. The aim of the dissertation was to identify and understand evolving management theory and how it aligns with organization strategy as it was believed that with such a large amount of capital being spent on projects, organizations did not place a high enough level of priority on Project Management processes or academic qualifications. Whether this is a result of ignorance, or just a pure lack of understanding of the implications on the behalf of executive level management, was the basis for discussion throughout the dissertation. Finally projects are aimed solely at either increasing profit in line with organizational mission requirements or increasing efficiency through productivity. So the dissertation is written with the intention of raising awareness to improve project performance and not just to highlight organizational short comings. The dissertation aim is to investigate how evolving Project Management theory, organizational strategy and change management implementation and Project Management academic levels influence individual’s perceptions and actions within project based organizations.

Project Management Standardization Dissertation Objectives

  • To identify and introduce evolving management theory
  • To analyze the role that Project Management has within organizations strategic management processes
  • To investigate the level of understanding individuals within organizations have of Project Management processes
  • To investigate the academic levels of individuals within project based positions
  • Conduct a questionnaire based on the aims, objectives, and literature review formulating a strategic set of questions to challenge senior managers with an interview in relation to the concerning trends

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MBA Project Globalization

MBA Project Globalization

Summary

Over the past few decades, the global scenario has changed considerably with increased interdependence amongst nations and economies. This intertwining amongst nations and sharing of ideas and technology has been termed as “Globalization”. Globalization has been a buzzword of late, with heated discussions about its pros and cons. Some consider it to be a blessing for mankind while others take it as a curse. For some it has brought about material prosperity while others have become unemployed due to it. This paper tries to analyse the effect of Increased International Trade and Globalisation on the US economy. The first section discusses the pros and cons of Globalization while the second section discusses how globalization has lead to increased foreign trade. Thereafter, it discusses the effect of globalisation and increased foreign trade on the American economy.

Introduction

Trade is believed to have taken place throughout much of recorded human history, whether as barter or in exchange of currency. Till the 1800’s, trade was limited due to difficulties in transportation, communication and restrictive trade policies. However, in the mid 19th century, with advent of free trade and nation advantage concepts, trade started to pick up (Daniels & Sullivan, International Business and Operation).  Although international trade has been present throughout much of history, for example Silk Route, its economic, social, and political importance have increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing. Worldwide, countries are doing away with trade restrictions and lowering trade tariffs, thereby supporting free trade and making the world a global village (Daniels & Sullivan, International Business and Operation).

Globalization – Boon or Bane

The global economy is no longer an individual event and USA no longer plays the dominating role. This is apparent from the fact that ten years ago the World Trade Organization had only 80 members whereas now it has 153 members (WTO Data, 2010). Also countries like China and India are getting more bargaining power day by day. Globalization is the deepening relationship and broadening interdependence amongst the different countries of the world. The World Bank defines globalization as “the growing integration of economies and societies around the world.” This integration of regional economies into a global village has lead to increased international trade, investment, capital flows and technological advancements. Technological advancements such as the internet and cell phones have literally reduced the world to a Global village. Globalization has both its critics and it supporters. Some interpret it as a way of countries losing their cultural identities and becoming “Americanized.” Others see it as a way to reduce costs and to increase profits and efficiency. The debate over globalization is perceptible in demonstrations against the WTO in Seattle in the fall of 1999, against the Summit meetings in Quebec and Genoa and against several annual meetings of the IMF and World Bank. While on the other hand, supporters of globalisation look forward to a global village, linked together by the Internet, and enjoy the ever-increasing material well being (Daniels & Sullivan, International Business and Operation). The United States is seen by much of the world as the strongest supporter of globalization – in fact, as pushing it on everyone else. Over the years, globalization has resulted in increased foreign trade and capital flows, thereby contributing immensely to the domestic economy. In the 1990s, globalization and free trade, resulted in integration of China and the former Soviet bloc into the trading system thereby lowering inflation and opening new markets. However, as the emerging markets got stronger, the prices of commodities started rising immensely and competition from foreign workers lowered the average US wage rates. Jeffrey Garten, professor of international trade and finance at the Yale School of Management, points out that in 2000, the world’s wealthiest countries accounted for about 70 percent of the global economy, compared with 30 percent for developing economies. These rates are slowly but surely reversing. Thus, USA has seen both the positives and the negatives of globalization.

International Trade

One important effect of globalization is the increased interdependence among nations which has demanded increased liberalization of markets, the dismantling of almost all trade barriers (Lee, 2005; Czinkota and Ronkainen, 2007). As a result, the forces of globalization have necessitated trade liberalization (Martin, 1993), leading to increased international trade, not only in good and services but also currency and capital. Ever since independence, America has been a supporter of Free Trade. In 1988, USA signed a Free Trade Agreement with Canada that progressively eliminated tariffs over a ten‐year period, thereby making Canada USA’s premier trading partner. Further, in 1994 the Mexican Government, in pursuit of market reforms, signed the North American Free Trade Agreement (NAFTA). The passage of the NAFTA agreement signalled the continuing support of U.S. policy‐makers for the worldwide march toward free markets and further economic globalization (Paul. S Boyer, 2001). The above agreements lead to immense increase in trade and greater market efficiency. However, by 1999 USA had a huge trade deficit of around USD 200 billion (Paul. S Boyer, 2001). The trade boom of the 1990’s had ended in a recession marked by serious job losses and the nations policy of “free trade” was being questioned. President George W. Bush insisted that America’s economic future lay with the global economy, but early in 2002 political pressures led him to slap import duties on cheap foreign steel. However, he was forced to withdraw it in 2003 due to retaliation against US exports and WTO sanctions (Paul. S Boyer, 2001)

Globalization MBA
Globalization MBA

Competition and Business Restructuring

International competition goes hand-in-hand with globalization. A company that has been very successful in the domestic market may suddenly find itself facing competition from a yet unheard of company from the other end of the globe. Survival in this new business environment calls for improved productivity, reduction in costs, up gradation in technology and advancements in supply chain management (O’Reilly, E., & Alfred, Diane., 1998). For example, In the 1980s American automobile manufacturers began losing market share to Japanese competitors who offered American consumers higher quality cars at lower prices (Brewer, G., Managerial Accounting). However, from the consumer’s point of view, increased competition promises greater quality, reduced prices and a greater variety of goods and services. China’s entrance into the global marketplace has proved that globalisation leads to competition and changes the business environment. For example, from 2000 to 2003, China’s wooden bedroom furniture exports to the United States increased by more than 233% to a total of $1.2 billion. During this same time, the number of workers employed by U.S. furniture manufacturers dropped by about a third, or a total of 35,000 workers (Fishman, T., 2005).

In a 2002 speech, the Economic counsellor to the US Embassy, Mr Lee Brudvig, said, “We have not resisted the free flow of money, goods, services, and ideas. Rather, we have subjected our companies to market competition and limited the role of government on the whole to that of facilitator, regulator and, when necessary, safety net provider. As a result, we have seen a massive reorganization of business structures. Whereas in 1960 manufacturing accounted for 27 percent of GNP, by 2001 it had dropped to below 15 percent.” The changes brought about by technology and productivity is causing both markets as well as organisations to undergo restructuring.

Labour Market Developments

An important trend in labour markets in the advanced economies has been a steady shift in demand away from the less skilled toward the more skilled (Slaughter, M., & Swagel, Philip., 1997). Studies have shown, for the advanced economies as a whole, that trade with developing countries has led to about a 20 percent decline in the demand for labour in manufacturing, with the decline concentrated among unskilled workers (Swagel, Philip., 1997). This trend has produced dramatic rises in wage and income inequality between the more and the less skilled. In the United   states, wages of less-skilled workers have fallen steeply since the late 1970s relative to those of the more skilled (Slaughter, M., & Swagel, Philip., 1997). According to a study conducted in 2007, the impact of trade flows in 2006 increased the inequality of earnings by roughly 7% (Bivens,J., 2007). The study goes on to prove that although “liberalized trade” is a win-win proposition for nations, it reduces the income of most workers. Workers employed in industries directly in competition with low-cost imports from abroad can expect to see immediate job dislocation and/or downward wage pressures.

The rise of labour abundant nations, like China and India, has increased the global labour pool. The price of labour-intensive commodities falls as a result of this increase in the global labour pool, and these falling prices harms the labour in professional-abundant nations like the United States. DVD Players, clothing and call centre operations, all provide examples of reduction in prices due to expansion in the global labour pool (Slaughter, M., & Swagel, Philip., 1997). Outsourcing and offshoring, has further increased unemployment and decreased national earnings. 22-29% of the U.S. workforce has been rated as potentially offshorable over the next one or two decades (Blinder, 2006). The implied loss due to offshoring would push these wages well below the 1979 levels, completely undoing the entire increase in these wages over the past three decades. The trade adjustment assistance (TAA) program has been formed as a way to compensate globalization’s victims in the United States. In 2006 TAA allocated $655 million in income supports for workers harmed by globalization, and, another $200 million for training. As quoted by Bradford, Grieco, and Hufbauer in their study, “While the gains from increased trade generate a permanent rise in income, the associated losses are temporary. Nevertheless, they are very real, and are concentrated on a small fraction of Americans”.

Financial Market Globalisation

Financial globalization has been one of the most important trends in the world economy in recent decades. Financial globalization has been one of the most important trends in the world economy in recent decades (Lane and Milesi-Ferretti 2003). International financial liberalization was also accompanied, in a

somewhat chicken-and-egg causal relationship, by the abandonment of the Bretton Woods system of adjustable exchange rate pegs and the shift to floating exchange rates among the major currencies or regional currency blocs (Eatwell 1996). When currency fluctuations are considered, it is the exchange rate between the US dollar and the euro that gets the most attention. This not only reflects the size of the respective economies using these two currencies, but also the fact that the US dollar is the most widely traded currency today. That’s because it effectively serves multiple roles: as an investment currency; as a reserve currency for many central banks. According to an IFSL research conducted in April 2007, the US dollar was involved in 86% of foreign exchange transactions, followed by the euro (37%), which proves its importance (Safar, L., 2008). The report further states that foreign currency trading increased by 70% in 2008 compared to 2004. This increase in currency trading makes it imperative for companies to learn to deal with exchange fluctuations and how to benefit from all situations. The US dollar has fallen since January 2004 against the euro as well as against most major European and Asian currencies. This has caused many companies to introduce a “fluctuation clause” in their contracts to protect themselves from losses due to exchange rate fluctuations and has also lead to the development of many financial instruments to help companies hedge their currency risks. However, times such as these when the dollar becomes weaker often works well for US producers with a larger proportion of their costs being in dollars but selling worldwide. International revenues not only translate to higher US-denominated revenues, but they also contribute to higher margins which can be achieved globally (Safar, L., 2008). For example, Q1 2008 for instance marked a milestone for Google, whose international revenues exceeded US revenues for the first time. Revenues from outside of the United States represented 51% of total revenues in the period, compared to 47% in the first quarter of 2007 and 48% in the fourth quarter of 2007. In Q2 2008, this had increased further to 52%. According to Google, “Had foreign exchange rates remained constant from the second quarter of 2007 through the second quarter of 2008, our revenues in the second quarter of 2008 would have been $249 million lower.” (Safar, L., 2008). Nothing can be predicted with 100% accuracy when it comes to exchange rates, and the only thing that can be safely said is that there will be no “business as usual” when it comes to currencies.

Political and Institutional Changes

According to CIA Global Trends 2015, 2000,” The rising tide of the global economy will create many economic winners, but it will not lift all boat. It will spawn conflicts at home and abroad, ensuring an even wider gap between regional winners and losers than exists today. Regions, countries and groups left behind will face deepening economic stagnation, political instability and cultural alienation. They will foster political, ethnic, ideological, and religious extremism, along with the violence that often accompanies it.” One of the most important and necessary features of the current process of globalization is the proliferation of international organizations. Scholars point to the emergence of expanding web of international treaties and institutions, which regulate and adjudicate on matters of interstate behaviour. The number of international organizations rose from 61 in 1940 to 260 by 1996 (Barnett 2002:110). Since 1995, when the World Trade Organization (WTO) was formed, transnational corporations have increasingly influenced political leaders to push international trade laws in the same direction of liberalization and deregulation. In addition, existing international organizations like the IMF, the World Bank and the GATT/WTO have transformed their roles substantively, gaining further powers and responsibilities (Camillery and Falk 1992:94-7; O’Brien et al. 2000). The United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. Due to this reason, the United States enjoys considerable bargaining powers in the WTO and World Bank. With the influence of globalization and with the help of The United States’ own economy, the People’s Republic of China has experienced some tremendous growth within the past decade, and now enjoys as much bargaining power, if not more, as USA. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United   States for the position of leading world power (Fishman, T., 2005).

Crime and Terrorism

At the end of the 20th century, a new phenomenon appeared—the simultaneous globalization of crime, terror, and corruption, an “unholy trinity” that manifests itself all over the world. This unholy trinity is more complex, however, than terrorists simply turning to crime to support their activities or merely the increased flow of illicit goods internationally. Rather, it is a distinct phenomenon in which globalized crime networks work with terrorists and both are able to carry out their activities successfully, aided by endemic corruption. Crime groups and terrorists have exploited the enormous decline in regulations, the lessened border controls, and the resultant greater freedom, to expand their activities across borders and to new regions of the world. The United States has been one of the worst sufferers of this new “global” terrorism. Since September 11, 2001, numerous resources have been shifted in the United States and elsewhere from addressing trans-national crime to fighting terrorism. It has increasingly become clear, that for a nation to advance, it has to keep its crime and terror activities in check.

Cultural and Other Issues

The growth of cross-cultural contacts has helped the United States participate in a new World Culture. It has helped Hollywood reach remote corners of the world while at the same time Bollywood has reached out to the Americans. Globalization has also lead to greater international travel and tourism thus greatly benefiting the tourism industry. WHO estimates that up to 500,000 people are on planes at any one time. (WHO Data, 2009). In 2008, there were over 922 million international tourist arrivals, with a growth of 1.9% as compared to 2007 (UNTWO Data, 2009). Globalization has also increased the number of illegal immigrants entering USA. The Rockridge Institute argues that globalization and trade agreements affected international migration, as laborers moved to where they could find jobs. The Mexican government failed to make promised investments of billions of dollars in roads, schooling, sanitation, housing, and other infrastructure to accommodate the new maquiladoras (border factories) envisioned under NAFTA. The 1994 economic crisis in Mexico, which occurred the year NAFTA came into effect, resulted in a devaluation of the Mexican peso, decreasing the wages of Mexican workers relative to those in the United States. Unemployment, corruption, low wages and few opportunities cause Mexican laborers to look for greener pastures and migrate illegally to the United States.

Conclusion

Globalization leads to increased international trade and reduction in trade barriers, which is beneficial for all the trading nations. Increased globalizartion has increased competition in the global economy, making it tougher for organisations to survive, and leading to greater productivity, efficiency and quality. This has in turn lead to the rise of countries like China and India, which are rich in labour. Due to the rise of labour abundant nations, the US labour market has suffered with fewer jobs being available for unskilled workers and lowering of wages. Further, outsourcing and offshoring have lead to loss of jobs and unemployment. In order to establish a set of trade rules and monitor the trading nations, institutions like WTO, IMF and World Bank have gained in importance. The United States hold a very important place in all these institutes, due to its strong economy and political power. Thus, it has a huge bargaining power when it comes to trade regulations. Overall, globalisation has affected America both positively as well as negatively but it is primarily due to globalisation and increased trade that America has a strong economy today.

References

Bivens, J., 2007, Globalisation and American Wages: Today and Tomorrow,

The author examines the effect of globalisation on wages and predicts what the future is going to be, based on mathematical models.

Blinder, Alan. 2006. Off-shoring: The next Industrial Revolution. Foreign Affairs magazine.

Boyer, P., Foreign Trade, U.S., The Oxford Companion to United States History.2001.Encyclopedia.com.

Boyer, P., Global Economy, America and the., The Oxford Companion to United States History. 2001. Encyclopedia.com. Accessed on 22 Apr. 2010 at

Daniels & Sullivan, International Business and Operation, 11th Ed, Pearson Education

Eatwell, John. 1996, International Financial Liberalization: The Impact on World

Development, Office of Development Studies, Discussion Paper Series (September). New   York: United Nations Development Programme.

Fishman, T., 2005, How China Will Change Your Business, Inc. magazine,

O’Reilly, E., & Alfred, Diane., 1998, Innovations in Technology and Globalization,

Slaughter, M., & Swagel, Philip., 1997, Does Globalization lower wages and export jobs?, IMF Report,

UNWTO World Tourism Barometer (World Tourism Organization) 7 (2)

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MBA Dissertation Topics

Where Can I Find MBA Dissertation Topics

I have been asked on my occasions by students on where to find quality MBA dissertation topics. Well, I responded by saying that you can find them in a university library or on the internet on credible websites. Before we go any further on explaining how to find relevant MBA dissertation topics it is vital that we establish what an MBA dissertation is. Firstly, An integral part of any MBA degree is the successful completion of a research dissertation. In near enough every case, you must complete an MBA dissertation before graduating you cannot elect to sidestep the dissertation requirements of an MBA degree. As you are already aware, an MBA degree is a study into the theory and application of business management principles, often applied to a variety of real world business situations. It would be prudent to base your MBA dissertation topic on the most common components or subject areas of an MBA degree;

  • Accounting
  • Operations Management
  • Business Management
  • Finance
  • Marketing
  • Information Technology Management
  • Strategic Risk Management
  • Entrepreneurship
  • Human Resource Management
  • E-Commerce
  • Economics

We will attempt to highlight areas of interest and typical dissertation titles that MBA students across the globe undertake. One of the most satisfying aspects of writing your own MBA dissertation topic is that you chose your own dissertation title and you have the opportunity to contribute to the field of study you have chosen. Below are some MBA dissertation topics that have been written in their respective field that may help to guide you.

MBA Dissertations
MBA Dissertations

Accounting MBA Dissertation Topics

An MBA Accounting Thesis is not restricted to one major category or subject area. You have the ability to think outside the box and generalize about wider subject matter which fall into the accounting field. You could begin to look at new global accounting principles, account practices across boarders, how information technology affects traditional accounting techniques, or base your research on the performance of a specific company while considering a whole host of external factors, the list goes on. Below is a list of accounting based MBA dissertation topics that have been written by successful MBA graduates;

An Analysis into the Extent of Financial Leverage within the UK Food and Drink Industry – Identifying Potential Communication Problems between Senior Management and Investors

How does the Banking Sector Influence Economic Growth? A Comparative Analysis of China and India

A Study into the Feasibility and Deployment of the Four-Factor Asset Pricing Model in the UK Stock Market

The Rivalry And Integration Strategies Of Global Stock Exchanges

Implementation of Micro Finance

Operations Management MBA Dissertation Topics

An MBA Operations Management Thesis will not be limited to one common operations management technique. You would have gained enough operations management knowledge during your MBA degree to adequately compose a dissertation in this field. It is tempting to add more knowledge to an existing topic but you should relish the opportunity to contribute something new to the operations management field of study. You could begin to look at global supply chain management, inventory control, performance management, TQM, statistical process control and quality management within prestigious organisations. The following is a list of operations management themed MBA dissertation topics that have been written by successful MBA graduates;

The Multicultural Project Manager: Exploring Linkages Between National Culture and Conflicting Styles of Management

Performance Measurement Concepts and Practises in a Supply Chain Context. A Study of Intel Corporation

The Impact of TQM on the Service Industry

Inventory Optimization Techniques: A comparative Study of the Inventory Optimization Technique Used by Telecom Retailers

Which Quality Improvement Tool is Best Suited to the Healthcare Industry?

Business Management Dissertation Topics

When undertaking an MBA Business Management Thesis you will discover that the subject is not limited to one particular organisation or management technique. Business management is probably the broadest business subject area out there. Management techniques go back centuries and there has been a lot of academic contribution within this field, but with changes in culture and global management techniques you should have a wealth of information at your disposal in order to adequately compose a dissertation in this subject field. It is tempting to write about existing management techniques and how they are applied to organisations but you should embrace the opportunity to contribute something new to the business management field of study. You could begin to look at global management techniques (challenges and opportunities), business performance and evolving management techniques within prestigious organisations or profitability challenges faced by organisations, the list goes on. The following is a list of management theory based MBA dissertation topics that have been written by successful MBA graduates;

The Impact and Influence of Organisational Culture on Innovation Management

An Empirical Investigation into the Impact of Leadership on Organisational Performance

A Review into Project Theoretical Concepts and Models in Regards to the Management of Change and Conflict

To What Extent Do Environmental Issues Affect Business Performance?

The Influence Of Culture On Negotiations In The Context Of International Business

Finance MBA Dissertation Topics

Writing an MBA Finance Dissertation is an exciting prospect to say the least, there is so much happening within the field of finance and you will have the opportunity to write a remarkable dissertation in this field. Finance is probably one of the most talked about subjects out there at the moment. Finance is becoming a global phenomenon and changes on a daily basis with the influence of stock exchanges and governments. It is safe to say that you will have a plethora of information at your disposal when compiling your dissertation in this subject field. For an insight you could begin to look at global finance techniques, financial performance of global organisations, global money markets, and financial comparisons of countries, the list goes on and on. The following is a list of finance related MBA dissertation topics that have been written by successful MBA graduates;

External Finance and Firm Performance, Evidence From China

An Analysis and Evaluation of Investment Strategies

The Future Of Secularization, Is Secularization History? Its Impact And Influence On The Banking Sector

An Analysis into the Effectiveness of Margin Financing. A UK Based Exploratory Study

The Impact Of Asset Allocation Between Stocks And Bonds On The Portfolio Performance

Marketing MBA Dissertation Topics

Similar to business management, the field of marketing is a very common research preference for MBA Students. Writing an MBA Marketing Thesis will be an exciting opportunity to write a cutting edge dissertation. The field of marketing is often seen to cross over into other fields of study but you can remain on topic and base your dissertation purely on marketing theories and techniques. The marketing discipline is wide and varied and you can start to look at relationship marketing, advertising, branding, cross-culture marketing, direct marketing, consumer behavior, online marketing and marketing ethics. The following is a list of marketing based MBA dissertation topics that have been written by successful MBA graduates in 2014 / 2015;

The Influence of Advertising on Consumer Behavior

Brand Design and its Effects on Consumer Purchasing

An Investigation into the Effects of E-Marketing and Online Animated Advertising on Consumer Buying Behavior

Impact of Online Marketing on Small Organisations

Creative Advertising versus Direct Marketing

Technology Management MBA Dissertation Topics

Constructing an MBA Technology Management thesis on technology management can be a demanding task due to the fact that information technology changes at such a rapid rate. Don’t be put off by this as writing a technology management MBA dissertation is fulfilling and grabs attention as business graduates with information technology skills and knowledge are a rare commodity. Be sure to write your dissertation on up to date technologies and organisations, it is not advisable to investigate outdated research or defunct organisations in this field. Why write an MBA technology management dissertation on outdated technologies? You should look into cutting edge research fields such as nanotechnology, IT outsourcing, global IT Infrastructure, ERP systems, VoIP technology, e-learning and key IT mergers and acquisitions. Try to relate you research to the business management field and try to avoid writing a scientific dissertation that would detract from you MBA degree. The following is a list of information technology based MBA dissertation topics that have been written by successful MBA graduates;

Geographic Information System (GIS) Mapping Solution For Job Task Management

Strategic Information System Planning In Investment Banks

Comparative Analysis Into India and China as IT Outsourcing Destinations

An Investigation on How Innovative Companies Gain a Competitive Advantage through Effective Management of Technology

The Software Project Manager’s Conflict. To Allow, Or Not Allow Change

Strategic Risk Management MBA Dissertation Topics

Basing you MBA Thesis on strategic risk management suggests that you are writing a piece of research that would help organisations to reduce exposure to risk or adverse trading conditions. It is safe to say that strategic risk management will be rigorously covered in the MBA degree and you will have built up a significant amount of knowledge relating to this field, you should be able to apply the knowledge and techniques gained into an MBA dissertation. You could look at the volatility of global stock exchanges, social risk in global organisations, risk management in derivative markets, risk management within the supply chain and risk factors affecting shareholder value. This list goes on. The following is a list of Strategic Risk MBA Dissertation Topics that have been written by successful MBA graduates;

Managing Supply Chain Vulnerability. Lessons in Addressing Variability and Discontinuity Risks from the Personal Computer Industry

An Analysis into How Correctly Implemented Systems and Procedures Reduce the Risk Associated with New Product Development

A Comparative Analysis Of Environmental Risk Disclosure In German And UK Companies

An Assessment of Risk Management in Banking

An Examination into the Benefits of Risk Management on Investments and Portfolio Assets

Entrepreneurship Dissertation Topics

Developing an MBA thesis on entrepreneurship is a very interesting proposition for any MBA student. Entrepreneurship has a lot of exposure on most MBA taught degrees and many successful entrepreneurs hold an MBA, it is common knowledge that an MBA and entrepreneurs sit side by side in the business world. For inspiration you could look at competitiveness of nations, investigate business enterprise, outsourcing, or ask whether entrepreneurs born or made? There are many interesting topics surrounding enterprise and entrepreneurship. The following is a list of Entrepreneurship based MBA Dissertation Topics that have been written by successful MBA graduates;

Are Entrepreneurs Born Or Are They Made?

Analysis into Global Offshoring and Outsourcing Activities – A Measurement of National Competitiveness

A Study into Competitive Strategies Adopted by Companies to Mitigate the Effects of Recession

An Investigation into Existing Global Outsourcing Trends

An Analysis into the Impact of Knowledge Management on Strategic Planning

Human Resource Management Dissertation Topics

Writing an MBA HRM Thesis is not restricted to one organisation or technique, HRM has become a global phenomenon due to cross boarder training practices, worker migration and organisations trading on a global scale. If you need a starting point for your HRM dissertation you can look at global recruitment trends, staff motivation within organisations, analyse staff retention techniques and staff training and engagement. There is so much to explore within the field of HRM. The following is a list of HRM based MBA dissertation topics that have been written by successful MBA graduates;

Impact of Employee Empowerment to Enhance Job Satisfaction within Vodafone UK

Can Flexible Working Act as Employee Recruitment and Retention Tool? A Study of NHS Direct

Impact of Employee Turnover on Organisational Profitability

An Investigation into Employee Retention and Commitment through the Deployment of Best HR Practice

The Role Played by Human Resource Management in Business Growth. A Study of Tesco

E-Commerce Dissertation Topics

Similar to technology management, writing an MBA E-Commerce Thesis can be a tricky proposition due to the fact that electronic commerce changes on a daily basis. This includes stocks, shares and any organisation that trade online. Be sure to write your dissertation on up to date methods and organisations, it is not advisable to investigate outdated research or defunct organisations as e-commerce has come a long way in a short period of time. Writing an e-commerce MBA dissertation on eBay or Amazon is old hat and uninspiring to a large extent. If you need inspiration for your e-commerce dissertation you can look at security risks and threats to organisations, the emergence and impact of online shopping, e-commerce strategies and business process re-engineering. The following is a list of e-commerce themed MBA dissertation topics that have been written by successful MBA graduates;

Design, Develop and Implement An E-Commerce Solution

An Analysis into E-Commerce and Network Security Concerns for SME Sized Organisation

Monitoring Data On The Internet

Analysis into Data Management in E-Governance Systems

An Investigation and Analysis into Website Features That Maintain Consumer Trust for E-Shopping

Economics Dissertation Topics

When writing your MBA Economics Thesis you will discover that the subject is not confined to a particular economics theory or technique. We are all exposed to economic conditions these range from domestic to global factors all of which make a firm foundation to base you economics dissertation on. Business economics is such an encompassing subject and there are many areas to investigate, you could start to look at global economic trends, hyperinflation, macroeconomics, economic policy, influence of the IMF and economic development. Below is a list of economics based MBA dissertation topics that have been written by successful MBA graduates;

An Assessment into the Importance of Economic Integration for Developed Economies

Empirical Tests of Consumption based Asset Pricing Models

Analysis Into The Relationship Between Stock Price And Market Efficiencies

Analysis Into Macroeconomic Factors Affecting Exchange Rates

An Investigation into the Extent and Impact of Economic Growth in Reducing Poverty in Ghana and Uganda

MBA Dissertation Topics
MBA Dissertation Topics

How MBA Dissertation Examples Can Help You

As you can see, there are a lot of possible MBA dissertation topics for you to choose from, and we have pointed you in the direction of quality pre-written MBA dissertation topics. The material is to be used to structure your own MBA dissertation we do not encourage you to copy or plagiarize any reference material you encounter during your studies. Hopefully, we have given you a positive insight on how to begin and research your own MBA dissertation topic. Good luck and all the best!

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