Question

Multinational enterprises (MNEs) have an impact far beyond their firm boundaries. Assume you are working for a small firm that supplies a product or service to an MNE. How might your relationship change as the MNE moves from Globalization 2.0 to Globalization 3.0 operations?

Answer 1

Answer:

Multinational enterprises (MNEs)

Relationship Change as the MNE moves from Globalization 2.0 to Globalization 3.0 operations:

This move means that Indian and Chinese companies would be competing with my local small firm.  The MNE may be looking for cheaper prices for my company's products and services, which the Indian and Chinese companies would more efficiently supply it.  My firm may be on the precipice of liquidating if this MNE is our major customer.  My firm must move fast to become more competitive by differentiating our products and services with better quality and perhaps reduced production costs, to enable it compete more favorably with the Indian and Chinese competitors.  Otherwise, we may regard the relationship as nearing its end and prepare for other opportunities with other companies.

Explanation:

Globalization reduces national boundaries by integrating national economies into a globalized economy, thus enabling companies to compete globally for financial resources, goods, and services.  When Globalization 1.0 happened, countries were globalized and the world became a global village.  When Globalization 2.0 from which the G7 profited largely, companies were globalized.  With the current Globalization 3.0, individuals are being globalized, and the highest beneficiaries are Indian and Chinese nationals who appear better prepared to take on the world, garner most of the important resources to themselves, and call the shots from the boardrooms.  An example is Microsoft's current CEO, Satya Nadella, who is an Indian-American.