Necessity of Multinational Businesses and its Influences Term Paper

Necessity of Multinational Businesses and its Influences - Term Paper Example The multinational business has made major contributions to the economic growth and developments as it helps in increasing employment, industrial production, better government control, higher GDP, national income etc. Having realized the growing importance of multinational business, the most developed and developing countries are following free trade policies to encourage multinational business. The recent developments in the field of international trade are primarily led by deregulation of the business in the global platform. The multinational business is very helpful in increasing flow of capital, exchanges of resources like labor force, raw material, technology etc and it also offer a number of opportunities to the multinational corporation along with hosting country. It brings competition in the market by making specific market matured and efficient. In this regard, Hope and Mailing have described the trade policy as â€Å"competition-enhancing device† as the host countries ’ market receive a number of new players making the market highly competitive for the existing domestic companies (Hope and Maeleng, 1998, p.52). The organisations are trying to expand their market in the overseas boundaries to grab market opportunities. However, in this process of internationalization, there are a number of challenges which have been driven by multiple factors. This paper will attempt to main drivers of multinational business led by the globalization process and major opportunities and challenges in this regard. Globalization has been a very debatable but an interesting area of Economics as it includes all the necessary aspects of growth and development. In fact, the process of globalization includes combines economics, international relation, sociology, and management. All these areas are very significant for economic development and globalization has playing a crucial role in this regard. As globalisation covers wide aspects, many scholars have tried to de fine globalisation as per their perspectives. Rhodes (1996) stressed on economic and financial â€Å"the functional integration of national economies within the circuits of industrial and financial capital† (Ali, 2000, p.5). On the other hand, Mobley and Weldon have given a much broader definition of the globalisation as they defined that is refers to any force that creates an unexpected, uniform, sometimes disruptive condition across heretofore impermeable boundaries within which the relevant conditions were previously varied† (Mobley and Weldon, 2006, p.146). The process of globalisation has been very gradual and there are a number of driving forces behind this process. Globalisation can also be viewed from the multidisciplinary aspects which includes a philosophy, a phenomenon and a process and these three multidisciplinary aspects have influences the human being profoundly. In this regard, the driving forces have led to turn the phenomenon as a process and philosoph y. There are four major driving forces of the globalisation process that includes trade, finance, technology, communication and transport.