The Paradigms in International Business

The age of globalization enables businesses to move their operations offshore with the minimum of fuss . For example , businesses in the West are moving en masse to China to take advantage of the low cost of production there (cited in Hitt , 2007 . China has the largest reserve of manpower in the world . As a result , the cost of manpower in China is one of the lowest in the world . This enables businesses from the west to keep costs down . If it had not been for the process of globalization and China joining the

World Trade Organization as a result of that process then the massive economic opportunities arising out of China 's meteoric rise to economic excellence would never have emerged . Because wages and salaries are very high in the West , the mature economies of the West are stagnating and not generating enough demand . Rather than generating demand for traditional goods and services , these advanced economies are creating new patterns of demand that require companies to constantly innovate on their product lines (cited in Hill and Jones , 2007 . The innovation is mostly in the form of differentiation , cost minimization and quick response . Companies that can differentiate their products or price their products less or deliver customer wants quickest are the ones which can survive . That is why competitive rivalry in the West is intense . It is not easy for the management of businesses limiting themselves to the mature economies of the West to reduce the cost of their operations because...