Is the world flat?

What does a flat world look like? In the article the world is flat while I was
sleeping signifies a flattening of the world by using outsourcing to India and other cases
as examples. Firms can now participate with other firms around the world meaning the
world is indeed flat since this phenomenon did not exist before global connectivity and
the elimination of borders. Some experts would say the dot.com bubble was the
springboard to the modern world a world where connectivity allows countries to share
data and construct a final product. The flattening of the world revolutionized business
ideals and modern societies.
The question to whether the world is flat is not simply answered because where
some see benefit other parties see danger. An example, outsourcing to countries like India
promotes growth for India, but what does that say about countries like America?
Speculating India’s future is easy, India’s professional class will grow and places like
Bangalore will become global business hubs. What can we speculate of America’s
economic growth? Thomas Friedman on his book pointed out that most functions thought
to be in America are outsourced. The playing field is being leveled; America is no longer
the only player on the field but other players have emerged and they are hungry.
Throughout the nineteenth century multinationals went on the search for new markets and
emerging economies and this happening led to a new type of globalization.
Individuals and small groups can now globalize and since no one person owns the
Internet access is virtually free. Today we have new forms of collaboration between
firms, individuals and groups. In essence the world is flattening to the extent access and
reach are virtually limitless, ideas can travel farther and create new industries and
innovations. New means of communication and the Internet have changed the way people
interact and express ideas no matter the physical distance. But the flattening of the world
has come costly to some, for example AT&T the communications titan had invested
millions of dollars in landlines that are now useless.
Furthermore, the world is flat but the flattening of the world does not necessarily
benefit all parties for example big firms that can outsource entry-level jobs to oversea
firms do not benefit the people losing those jobs. No one likes to talk about the truth
behind outsourcing because while America is a capitalist society not everyone benefits
equally. Universities and institutions for higher learning know that in order for their
graduates to be successful in a competitive work place; college grads need hard skills to
compete. But how can we say the world is flat and not adapt to the world? America is no
longer ahead of other countries by a long shot, today it is more like close race where the
less competitive participant can lose ground and fall behind.
In conclusion, the world is flat and while we were sleeping countries and
multinationals have flattened the playing field and every participant has a chance to be
competitive and come on top. The information age is now and everyone can participate or
benefit from the access and means of communication this age brings. Solutions for
International business dilemmas are never black and white because no matter the final
response or “fix” to the problem there is always an element that does not benefit. The
answers in international business are never easy and have been historically complicated.
In closing, the world is flat nevertheless every party needs to adapt or be forced to adapt
because flattening is happening and one can either embrace or resist the new change.
 Economist Milton Friedman once famously stated, “The social responsibility of a
business is to increase its profits.” The social responsibilities of a business are many and
not just one. As an international business student I’ve been taught to think big picture and
use logical inquiries. The goal of a business is profit maximization and that is a fact in a
capitalist society. Nonetheless I disagree with Milton Friedman’s statement since the goal
of a business is profit maximization; social responsibility is a different duty altogether.
What happens when a firm doesn’t produce profit, should the firm neglect social
responsibility? It is my belief that a firm can make zero profits and still be socially
responsible. Not every business that makes profit contributes to society and not every
business is profitable.
Furthermore, increasing profits can also mean lowering salaries and wages
ultimately leading to outsourcing, which is not a social responsible action because
outsourcing leads to layovers and masses unemployed. Perhaps Milton Friedman failed to
consider that businesses increasing profits could mean lowering cost and human costs are
expensive compared to automation. People around the world lose jobs everyday to
outsourcing and automation because businesses want to increase their profits and
lowering costs is an excellent way to increase profits. Altogether I agree businesses
should find a middle ground between social responsibility and profit. Social
responsibility is important and so is profit because without profit a business cannot
survive but without businesses contributing to society, societies cannot prosper.
Both profit and social responsibility should be essential in the growth of a corporation
and both elements should exist in every corporation’s agenda.

Do cases such as AIDS in Africa or Shell in Nigeria challenge the notion that morality
has no place in corporations? Why or why not?

Morality does have a place in corporations and this notion challenges

multinationals to wonder whether there is space for morality. Morality increases
awareness of social problems, which can ultimately lead to a disturbance in the business
world. Africa’s epidemic of AIDS caused a new question for morality; why should large
corporations be forced to provide little or no cost AIDS treatments to needy people that
cannot afford the treatment? This question was asked and the debate was not negligible
because all parties involved wanted what benefitted their cause. According to each party
each cause was important and should be held plausible because each parties actions was
justified to their circumstance.
Shell in Nigeria posed another issue because one man dared to protest the living
conditions of his people in Ogoniland to his government. Shell was faced with a moral
dilemma because the situation in Nigeria had escalated to new extremes and Shell’s
executives asked themselves whether to continue operations in that region despite all the
protest and civil unrest. Morality and human rights go hand-in-hand since moral issues
are often times exposed when human lives are involved. Therefore, cases such as the
African AIDS epidemic and Shell in Nigeria have tested our humanity and have let us to
question whether people are more important than economic progress or if thousands
dying people are more important than the investment of a corporation. Moral conflicts
will always be present and as long as there are people in corporations the moral conflicts
will test their humanity.
Clients: B.M.Z, F.I.G, B.R.O, C&P
Name: Fernando Discua
Date: 2 December 2014
Subject: Global expansion
Global expansion of B.M.Z, F.I.G, B.R.O, C&P
After extensive research and analysis, International Business Consulting has
developed international strategies and indentified potential foreign markets for each firm
to explore and consider. Four different American companies each having distinctive areas
of expertise are willing to expand globally and compete in the global arena. B.M.Z is a
large pharmaceutical company interested in selling their top patented drugs to foreign
markets, F.I.G is a recognized snack food manufacturer, B.R.O is a petrochemical
producer and C&P is a skin-care product manufacturer and every firm is willing to
compete globally. While each firm has expressed they wish to expand their business
abroad each firm will have a unique strategy and approach into a foreign market.

B.M.Z has a unique situation because B.M.Z has expressed they are willing to sell their
top patented drugs to foreign markets and to this notion the international strategy is best
suited for B.M.Z. The international strategy provides home market products to sell
globally with minimal local customization. This notion is assuming their top patented
drugs have had success in their local market and customization is not a problem. The
international strategy is ideal for B.M.Z as their patented drugs have been proved to work
in their local markets and should hence be exposed to new markets. The international
strategy allows for local customization meaning the drugs can be adapted to the host
countries’ laws and standards.

Moreover, our company researchers have found that England is an ideal first foreign
market for B.M.Z since England is major center for developing a name brand. Although
the local pharmaceutical market of England is competitive and constantly evolving
selling patented drugs can prove a success or a bust. My firm believes due to the
monochronic and formal business culture of England business interactions with the U.S
culture can prove a significant advantage. The recommended entry method for B.M.Z
into England is licensing the rights of the patented drugs to local firms. Licensing grants
low development cost and risk. Other entry strategies like wholly owned subsidiaries and
joint ventures do not allow for flexibility and low development costs like licensing
therefore licensing is the an optimal solution.

F.I.G is a recognized snack food manufacturer and wants to sell its top brands in foreign
markets. F.I.G’s global interests are commendable and therefore the transnational
strategy is an ideal match for the snack food manufacturer. F.I.G’s positive name brand
recognition comes from the U.S market indicating the firm’s brand products are
successful in the U.S. Of course with the transnational strategy F.I.G will be able to adapt
their brand products to gratify the local market demand. Any other international strategy
such as global standardization or international would not be able to fully satisfy the
expansion needs of F.I.G. A global standardization strategy has learning effects and low-
cost with a focus in economies of scale an element F.I.G is not interested in using. The
Transnational strategy provides local customization, a factor to take into consideration
since every culture has different dietary customs, and products may need customization
to meet the demand.

Additionally a foreign market best suited for F.I.G is Brazil. The Brazilian market is large
and knowledgeable of American brand snack foods. Since the company is interested in
selling its top brands to a foreign market the best approach for entry into the Brazilian
market is by a joint venture. A joint venture allows for easement to the already
established snack food market of Brazil by working with a business partner already
familiar with the local market. A disadvantage of a joint venture is the inability to engage
in a global strategic coordination within the partnership. Despite this fact, F.I.G will be
capable of entering the Brazilian Market with shared risks and development costs with an
already established business firm allowing F.I.G access to the market share.

B.R.O a bulk petrochemical producer is interested in entering foreign markets in order to

achieve economies of scale. After researching and analyzing B.R.O’s case my firm
believes global standardization strategy is an ideal fit for B.R.O since this strategy
focuses specifically on economies of scale, an important element B.R.O aspires to gain,
so it would seem consistent to exploit this strategy. While the global standardization
strategy does acknowledge economies of scale this strategy requires the marketing of a
standard product worldwide, which could be disadvantage in a new market. Other
international strategies do not fulfill the requirements for B.R.O so they cannot be
considered. But bearing in mind B.R.O is pursing economies of scale the optimal strategy
is global standardization.

Furthermore, in uniformity with the global tasks of B.R.O my firm has consented that
Mexico is the excellent first foreign market to develop since the Mexican petro chemical
industry is strong and demanding mainly as an exporter of crude oil. Mexico has a unique
case because although the Mexican government controls the petrochemical industry
foreign businesses are welcome to invest so long as the foreign business invests in a joint
venture. In short, B.R.O will only be able to aide in the production of petrochemicals
through a joint venture with a Mexican partner. A joint venture business strategy will
result profitable for B.R.O since a joint venture will allow access to local partners and
knowledge. Also a joint venture will safeguard B.R.O from political barriers, risks and
development costs. A disadvantage of a joint venture is the inability to realize location
and experience economies. In spite of this fact, B.R.O will overcome this hurdle once the
firm has entered into the foreign market.

C&P, a producer of skin-care products is interested in both selling and cost-saving

opportunities abroad. C&P is best aligned with the localization strategy since this strategy
customizes goods/services to local markets matching tastes of local markets; localization
increases value to local markets especially if added value supports higher pricing. No
other strategy can completely satisfy the needs for cost saving and selling like
localization. A disadvantage of localization is high pressure for local responsiveness with
this fact in mind localization is still the optimal alternative for maximum selling and cost
saving. Furthermore, my firm has analyzed and concluded that Canada is the
recommended first foreign market to enter with less risk. Canada offers a competitive
environment with the presence of major skin-care manufacturers like Neo Strata,
Larachem and Phytoderm.

In addition, C&P is seeking a cost saving opportunity that a joint venture allows. C&P
will be able to save expenditure by sharing risks and costs with a local partner ideally
joint ventures allows for a foot in the door approach. The disadvantages of a joint venture
involve lack of control of technology and inability to experience economies. Essentially
the opportunities of a joint venture outweigh the disadvantages since further strategies
like franchising and licensing only focus on cost saving, these strategies do not
necessarily mean C&P will sell its products. A joint venture allows for an understanding
of the market environment with the help of an already established firm for this reason the
optimal option for C&P is a localized joint venture.

To conclude, International Business Consulting believes B.M.Z, F.I.G, B.R.O and C&P
can take their companies’ expertise and expand their businesses. Each company is unique
and was treated as such. International Business Consulting has attempted to place each
firm in the correct course to global expansion taking into consideration the rewards and
shortcomings. The final decision falls whether to heed this consult and take into account
that global competition is an unparalleled arena and the task can prove difficult but no
international business endeavor is ever easy. Thank you for business.