Theory of globalization and international marketing

 

One of the most coherent systems to connect international business theory to globalisation principles. Possibly Smith's greatest contribution was to see the economy as a system, and to provide "a persuasive coherent account of coordination in a commercialized society" (Dow, 2009 smith)? A system, as Smith pointed out, is the science of connected principles. His research also regards human exchange and paters that build because of moral behaviour. He combines (psychology, sociology and economics). Also, he recognises cultural and physical distance, as well as acknowledging human background and its experience that influence decision making.

As any specific exchange must be based on a self-conscious recognition of a differentiation of interest, an appeal to the potential trading partner's self-interest can be made only with the capacity to realise what this interest is likely to be

Find what people want and “sell it” to them. (Not need. needs are on the highest level fulfilled, In some rear cases that you bring a game changing plan it could work)

Human knowledge consists of patterns that are created by imagining novel connections in response to observations that conflict with conventional system.

Simon (1965) and Williamson (1975) have noted the limitations of human intelligence in being "boundedly rational.

Capitalism's virtue is that "creative destruction" can happen without generating system disorder.

the principle of the division of labour can be thought of as a way of organising thought about causal powers at work in commercialised society...

While axioms are "self-evidentially true" by introspection, principles are derived from detailed observation. While the deduction of propositions from the axioms was the end of the matter for the deductivist approach, this was only one further step for the experimental approach, requiring also adaptation to the observed characteristics of the domain of application, with the possibility always of revision of principles. (Dow, 2009: 109) (*Introspection is the process by which someone comes to form beliefs about her own mental states.)

Businesses will often explicitly make choices when faced with uncertainty (like that undertaken when entering a foreign market) that are experimental in the sense that they are designed to be flexible in the face of volatility (Buckley & Casson, 1998).

However, the choice of actual investments utilised past experience, "judgement", and often impulsive decision-making. Reason and experience are twin pillars of Smith's system of thought.

the natural interest that people have in the fortunes of others is informed and modulated by the knowledge they have of one another.

it is harder to engender trust via mutual forbearance where sympathy declines because of a lack of familiarity between partners of different nationalities. (e.g. starbucks and china coffee prices on accord with US prices). And inability of firms to fill this void leads to high magnitude problems.

This exactly parallels smith’s concept of the economy as a system in which some systemic links are missing. These missing market links, or institutional voids, provide opportunities for enterprises to emerge to provide these links, and thereby to appropriate profit. This competitive advantage can alter provide opportunities for global expansion.

our potentially true beliefs about the external world are dependent on, and thus limited by, our actual observations. If we have not observed something, we cannot know whether what we believe about it is true or not. (Otteson, 2011: 29).

The above model deffines a few of the ideal suplements of these theories. In many wasy all these theories are applicable on the global markets, but the required action differess for each situation. If you are interested in learning more and getting to know what strategies you should follow, check our website on digital marketng and learn more.