Internationalization (economics)
Internationalization in economics refers to the strategic activities and processes through which businesses expand their operations beyond national borders to enhance profitability. This concept encompasses various aspects, including resource management, technology application, investments, marketing strategies, and logistics development. Importantly, internationalization emphasizes the need to respect the cultural integrity and traditions of the countries into which a business seeks to operate. Unlike globalization, which often suggests the diminishing significance of national identities, internationalization acknowledges and values the distinct cultural environments that exist across different nations.
Businesses engaging in internationalization are encouraged to thoroughly research and understand the local customs, beliefs, and market dynamics before expanding. This approach not only aids in effective marketing and product adaptation but also ensures that the expansion process is respectful and beneficial to the host culture. Companies are increasingly recognizing that successful international growth involves creating synergies between their operations and the unique characteristics of the local markets they enter. By fostering an inclusive environment that values diverse perspectives, internationalization aims to build a more collaborative global marketplace, rather than one that imposes a singular cultural identity.
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Internationalization (economics)
Internationalization refers to the complex of activities—resource management and distribution, computer technology innovation and application, industrial and business investments, marketing protocols, and the development and use of internal and external logistics as well as transportation networks—that a company or business, of any size, develops to advance profitability through international growth and development. Internationalization protocols, however, take as their first premise to respect the integrity and viability of the culture, traditions, and customs of the countries into which they will be expanding their operations. Internationalization, therefore, represents the conscious decision of a network to engage across national boundaries only by first extensively studying the nation(s) under consideration for investment, partnership, or expansion. Internationalization seeks to take developing businesses across national borders with the intention of respecting cultures and their traditions and marketing their products strategically and effectively according to diverse national elements.
Background
Internationalization is often used interchangeably with the term globalization; both terms appear to apply to the activity of a corporation or network to explore business expansion opportunities across national borders. Although rapid acceleration into a digital age appears to easily erase long-defined national borders, the nation-state is still the basic unit of economic market development, much as it has been since the era of exploration and colonization in the sixteenth century. When Spanish explorers, such as Francisco Pizarro, reached the Americas, they were engaging in a basic form of market expansion—bringing with them European innovations and goods and returning to the European continent with products and goods from the cultures they found. However, globalization and internationalization are hardly synonymous. In fact, they move in opposite theoretical directions.
The implication of globalization is that new technologies made traditional notions of nationhood and national identity irrelevant. In fact, proponents of globalization are quick to point out that such national borders, so sacred to the population, are, in fact, most often the results of arbitrary influences—military defeats, river systems, mountain ranges—and really have no quantifiable value. That view maintains that, as business activities expand beyond the conventional limits of borders and virtually repurpose nations into a global entity, such individual cultures and nations are expected to assimilate one to the other to surrender critical national identity. Globalization assumes that within a generation, nations, whatever their political, religious, social, and cultural dimensions, have grown so interdependent that such individual identification tags have lost purpose. With the mobility that computer information systems offer for relocating workers, moving goods, providing services and information, and expanding market reach, investing in projects becomes a way to boldly re-envision the world itself as a single market. Soft drinks, cars, computers, and clothing designed in one country can be made available to markets in other nations, nations that are entirely different in terms of culture and identity, and still succeed. A Coca-Cola in Chicago is, after all, a Coca-Cola in Buenos Aires.
Impact
Internationalization, however, begins with an entirely different premise—a Coca-Cola in Buenos Aires is simply not the same as in Chicago —because the cultural environment is so radically different. Geopolitical boundaries are more than arbitrary lines drawn long ago. They have come to mean something, and to presume otherwise is to discount centuries of significant traditions. When a business decides to move into the international platform, that business must carefully consider the implications of the move. How can a business market itself so that its goods and/or services become part of rather than exploit a nation’s identity?
Internationalization is a knowledge-intensive operational model; a business thoroughly learns where it will expand and how its expansion can respect the values, beliefs, traditions, and customs of a people. Through such strategic planning, companies can profit without exploiting or even consuming the national identity of their targeted market.
The decision made by companies to respect the Indigenous elements of the nations into which they are moving is applied not only to creating products and offering services that respond to those particular nation’s market environments but also to human resource management as well. American businesses, for instance, are careful to prepare those executives who agree to relocate to further the business expansion goals. They are schooled in native customs, the implications of gestures, and the expectations in behavior appropriate to the country to which they are being sent. Likewise, when companies opt to expand their own workforce by bringing in talent from other countries, the internationalized business works diligently not to make inevitable the assimilation of that worker but rather develop ways that the perspectives of that other culture can become an element of that company’s growth cycle. In that way, internationalization is a way to create rather than impose a global market.
Bibliography
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