Challenges facing global businesses and how COVID19 affected NAFTA trade
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Introduction
Global business is defined as an economic activity that is practically done between countries all over the world, in simple terms, we can define it as an international trade where different companies from different part of the world participate in it. Industrialized Western economies, global firms which were emerging out came up with this idea of creating and co-creating market and ecosystems through the ability to make a transfer of a package of financial, organizational and cultural assets skills and event ideologies across the national borders and Businesses that move an extra mile by expanding their business activities on a global scale this is the difference with an international business which only sells its products in the across the world but only has facilities only in its home country. The exchange of goods globally over great distances goes back a very long time where anthropologists already came along with this idea of long distancing in Europe in the stone age thus many international businesses are putting their efforts to become global businesses by establishing many businesses activities in another country. Although the global business has led to the growth of many countries economically, it thus got challenges which also in the same case affect the growth of these countries. For instance, when we take a look at a company such as Apple which is one of the top leading global business in the world. This company designs and manufactures technological products and later on marketing them to the consumers, these technological products includes smartphones, personal tablets, computers, entertainment gadgets which are used in our homes and wearable devices. More of its products are its iPhone line of smartphones and, mac line of computers. The company is also bringing up growing services businesses, selling video games, and digital content stores and also making platforms for streaming videos. Despite its success, the company faces political, economic, environmental and also technological issues. Still, it addresses the issue in a manner that it will always remain on the top and continue investing in other companies.
Discussion
Many businesses are striving to adapt to the local market, and they are making every effort so that that they offer their products to and services that suit the target segment. The process of identifying the requirements of the local industry is time-consuming. It makes use of many resources such as finances which may affect the financial performance of the organization (Defranco & Lattin, 2006). This strategy allows the business to be able to identify each of its goods and services to the right target group and this helps them to make high returns from each specialized segment, this technique makes services to differ from one area to another, and this is what enables the organization to take into consideration factors such as economics social, geographical and political which allows the lower market risk. Organizations who lack this kind of strategy experiences challenges in a decision such as pricing and also products and place since there is a need to make research from the local market from different parts of the world. Since globalization has turned the world it one global village people from different part of the country are aware of the products and services offered in the global market (Lamp et al., 2008) thus a challenge in local adoption is faced.
Global business expand their businesses using foreign investment which involves the flow of capital from one country to another .This strategy is usually seen as a catalyst for the growth of the economy.as global businesses increases, many uprising companies expand their branches to other countries thus many corporations open new manufacturing plants in different countries, more so , opening production plants . Although this foreign investors expand their companies to other parts of the world they face challenges which make them suffer great loss, mostly due to high taxes and lack of market in the targeted area.
Corporate social responsibility (CSR) also relate our topic in a manner that evry company is in the need to be good corporate citizens where they companies take an extra mile of going beyond the requirements of the law in the protection of the environment and also making contributions to social welfare hence it is widely accepted as a key success to modern business. CSR is concerned in the protection of the interest of every stakeholders such as employees, suppliers and customers. The majority of the aforementioned CSR methodologies emerged in response to the increased interest of investors in companies that have integrated CSR standards in their corporations (Greene, 2003). Even though they try to adopt humane employee practices, looking after the environment and taking part in philanthropic endeavors, the face challenges such as lack of transparency, limited criteria relative to the outcome and lack of consesus criteria and invalid criteria, Lack of consensus exists as regards which categories or criteria should be measured, as Porter and Kramer (2006) agree,
Global businesses usually face ethical issues which ought to be addressed while they are still conducting their business activities. Some of the ethical issues that are faced by the global businesses working conditions and standards, the diversity of a work place and equality of opportunities, child labour, religion, bribery and corruption, environment, politics human rights and many other issues that ought to be addressed in order for the business to succeed
How COVID 19 has affected NAFTA trade
COVID 19 has been declared as a public health emergency concern of international concern by the World Health Organization and of recent there are about four million people who already has tested positive with over half a million deaths according to the statistics obtain from the recoded data of the pandemic . This global pandemic has resulted to market failure in most countries around the bounder which has resulted to a decline in the global economic prospects. The pandemic has posed threat to the global business since it as affected international trade mostly the NAFTA trade and it is likely to destroy the gains which were made towards trade liberalization over the past few decades. It impact which are adversely increasing as the virus spread all over the globe are predicted to be more severe than those of the Global Financial Crisis because it has affected both demand and supply leading to the disruption of global value chains mostly in the exchange of goods and services and thus causing the production activity in the country which participate in the NAFTA trade
The restriction on social distancing has further restricted the availability of labor and transport among the affected countries hence lack of labour in the company leads to less production of goods and services which in turn bring a big problem on the NAFTA trade mainly the less developing countries are the one who suffered once the they are over reliant on the NAFTA trade in goods and services. Lack of cooperation between the affected parties on how to tackle the crises has worsened the economic situation of the world which has led to the growth of distrust among trading partners thus affecting the NAFTA trade.
Many countries had to close their bonders so that they can cub the spread of the virus this resulted to businesses not being able to import goods and services from other countries, neither were they able to export them to other countries hence affecting the NAFTA trade. Many countries has directed all their effort and resources on how to handle the pandemic which affects trade, more so others make use of lock downs and curfews so as to stop the spread of the virus which in turn affect movement of people thus lack of labour in the business and the means of transport to move goods.