Globalization, The Eclectic Paradigm and WTO Governance Likelihood.

The Eclectic Paradigm and WTO Governance Likelihood. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. One of the primary aspects of how globalization impacts international business is the inter-dependency of international trade. Whereby historically economies were limited to geographical boundaries, having economic systems wholly contained within a national infrastructure, today with the presence of global product trade, it is altering the global economy. For instance, this can be witnessed in China, a country that maintained a very immature capital market until the 1990s as a result of the historical command economy that was centrally controlled by the Chinese government. As China’s economy began to expand as a result of government deregulation, GDP and exportation became a favorite activity to ensure rapid economic growth. As a result, in order to become competitive with the rest of the developed world, it was necessary for businesses (once dominated by a government) to adopt capitalistic and neoliberal ideologies which allow for capital assets and production systems to be wholly owned and managed by private business leaders (Degen 2008).

As a result of this change toward capitalism in a previously Communist nation, it became more inviting for foreign businesses to establish joint ventures and strategic alliances with growing Chinese companies to gain a foothold for market entry. A government in China no longer owned majority equity stakes in businesses which ultimately led to opening new competitive opportunities for smaller firms that could not previously compete with government-controlled business group conglomerates. As a result, Western management philosophy (as one relevant example) became entrenched in Chinese businesses with an emphasis on human capital development and organizational culture development rather than operating under tightly-controlled and centralized hierarchies of authority.

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