Modern business not only deals with the production and distribution of products and services; it also has certain goals and strategies to generate maximum profit and revenue. Globalization, Industrialization, Modernization, and Urbanizations are the basic elements or pillars of all business life and the whole economy. They play an important role in modern business and management. Also, they are interrelated with each other for creating an economic surplus or profit; and the better management concepts where the various activities or tasks of business are smoothly coordinated to attain defined goals and objectives.
Effects of Globalization in Modern Business and Management ConceptsGlobalization in modern business is an interconnection of global markets and managing the overall businesses in the global industry by fulfilling all the global requirements to perform businesses in the global market. It is one of the main pillars of overall business and economy. With the introduction of globalization, there is huge competition in price, quality, and market. As a result, customers have better options to choose which goods or services fit the best requirement for them. In the mobile phone industry, Apple and Samsung are the two rivals which utilize the best technology and resources to dominate the global market. When the giant companies compete with each other for the supremacy, the customers can take advantage of it.
The various business and relation are performed beyond the borders with the help of globalization. It is possible due to the introduction of technology like the internet, E-commerce, and E-business. Before the use of technology, the businesses were just limited to a few people and organization, but after the use of technology and the internet, more business opportunities are possible. Due to the globalization of businesses, not only products and services flow across the border but the information & knowledge are also equally shared.
In the globalization of business, the maximum turnovers, transactions, and capital flow occur due to operating the business in multi-countries with the expansion of the market.
Nowadays, the top level companies operate in more than one country. The companies like Sony, Hyundai, Dell, Pepsi, Coca-Cola, Toyota and much more operate in various countries and utilizes the maximum resources & develops better international relations creating more business opportunities and employment. There are mainly two types of globalization. They are market and production globalization. In market globalization, businesses are expanded to the global market. Whereas, in production globalization, the raw materials and resources used for producing goods are imported from various countries. The more business partners and investment area are possible only with the help of globalization.
Negative Impacts/Effects of Globalization:
There are also some negative impacts or negative effects of globalization in modern business. To run business globally; there are various terms & conditions, policies, procedures, rules, and maximum funding. The proper care should be given to the research & development and technology sector. There is inequality in income. For example, the same company delivers a huge salary to the employees in the United States of America as compared to that running in India, Philippines, or Brazil. It also affects the capital flow as the maximum generated profit is taken back to the parent country.
Effects of Industrialization in Modern BusinessIndustrialization is the process of developing industries in a country which brings the social & economic change and changes the face of a nation. It also plays an important role in modern business and leads to urbanization. The industrialization is the basic element of any economy.
It creates more job opportunities. As a result, there is a huge rise in employment, improving the living standards of people.
In any underdeveloped or developing countries, the industrialization has a key role in the development of the nation by utilizing the best natural resources possible.
The high production of goods or products is generated with the help of machines and high scale equipment. If more production of goods is generated, more tax is collected by the government. The farmers can also sell raw materials to the industries and earn money. The urbanization is mainly possible after the industrialization because people stay near an industrial area. It raises the living standard by producing new and innovated materials and goods for the human being.
Negative Impacts/Effects of Industrialization:
There are also some negative impacts of industrialization. The unfair pay rates, working hours and labor disputes may affect the overall business. The lack of sanitation, pollution and health issues are other negative sides of the industrialization.
Effects of Modernization in Modern BusinessModernization means the process of transformation from a tradition to a modern model. Modernization of business means the process to create new business value from existing resources & applications.
The classical or traditional approach or model of business is replaced by the modern approach which can change the present & future of any business or organization.
It is only possible with the introduction and use of information technology and other latest technologies. For example, the banking industry nowadays uses various information systems, online transaction processing system, online transfer, electronic invoicing, electronic data interchange, online payment and many more facilities to the clients. It helps the business values and functions.
With the introduction of smartphones, advanced laptops, information systems, and networking; it is easy to set a business strategy for generating huge amounts of profit and business networking. Using the Customer Relationship Management System, it is very beneficial to maintain a good relationship between the customer and the management of an organization. As a result, there is a competitive advantage in the business.
The importance of Modernization of Business:
The modernization of business also means the proper strategy to allocate the budget and properly use of Customer Relationship Management System, Enterprise Resource Planning, and other Information System whether it is functional or cross-functional management information system.
Modernizing the existing business also helps in generating more products & services, controlling risks and failures; and performing a high degree of performances. With the use of cloud computing, outsourcing, and offshoring, it is possible to expand the market within or beyond the border.
Nowadays, different companies with the same value function or structure merge with each other to become stronger in terms of capital or financial presence, expand the wide market and gain high trust from the clients or customers due to overall transparency. The merger of ABC commercial bank with the XYZ commercial bank is one of the examples of merger concepts and modernization process for delivering high services & business values.
Effects of Urbanization on Modern BusinessUrbanization is the process of increase in a population in cities & towns where the societies become urban. It is possible because of industrialization. There is a positive and profitable business market in the urban areas as compared to rural one. There is more opportunity to earn in the city area which leads to a better-living standard of people. People in the cities area spend a high amount of money on the products & services. Therefore, the businesses in the urban area attract customers or clients of high income.
In urbanization, most of the infrastructure is new which creates a new market. As a result, new businesses can take advantage of it by creating new markets via networking.
Most of the urban areas in India, China and Brazil have a large marketplace where various economic activities are developed rapidly or at a faster pace. In urban areas, there is a heavy investment in education, transportation, housing, roads, airport, railways, colleges and much more where the flow of quality goods & services are high. As a result, there is a heavy cash flow and economic exchange. The quality lifestyle is possible in urban areas due to increasing urban facilities. The rise of corporate leaders & houses; and high labor productivity helps in the business & overall economy.
Hence, there is a positive relationship between globalization, industrialization, modernization, and urbanization. Industrialization will lead to urbanization and modernization combines both industrialization and urbanization. All four processes are the pillars of any business life and economy. They play a key role in economic development and have overall positive impacts or effects in modern business and management.