Executive Summary
COVID -19 pandemic has significantly impacted international business by changing how organizations operate. The article by Niccolo Pisani provides an in-depth explanation of how the pandemic has dramatically affected global trade. Most multinational companies currently operate minimally for fear of making losses, especially in the world market. Organizations now face heightened levels of uncertainty, with geopolitical tensions rising in the markets. Various countries around the world are trying to employ policies that can counter the economic destruction of the COVID-19 pandemic and fast growth in the post-COVID-19 era. The pandemic damaged international trade by increasing the cost of trade between countries. It led to the closure of ports through lockdown policies to reduce air flights and marine transportation between countries. The trade war between China and the United States is an example of the tension this pandemic has caused in international business. This article combines various research works and statistics and explores the effects of the pandemic on international trade.
The effects of COVID-19 on international trade are likely to stay longer. Therefore, international businesses must adopt approaches that can see them survive in the post-COVID-19 environment. Recent data and the author’s ongoing research on the world’s largest multinationals suggest major trends expected in international business operations in the post-COVID era (Pisani). The International Monetary Fund data shows that the world GDP fell by 3.3% since the pandemic occurred in 2020 but is expected to bounce back to nearly 6% by the end of 2022 (Alon & Bretas 261). However, while the macroeconomic indicators reveal a possible change in this GDP, the international business landscape will change significantly.
International companies will have to depend on China and the United States for survival in the global market. These two countries play a significant role in shaping the world economy and business environment. China’s current position as an export powerhouse implies that changes in its economic priorities will have substantial ripple effects on the international business landscape (Donthu & Gustafsson 286). There is also an expected rise in the relevance of global mergers and acquisitions. Also, the intensification of the regionalization trend is likely to emerge while businesses try to recover. Due to the increasing tension between countries on the international market, national governments have pressured companies to evaluate the best practices that can benefit countries and their regional neighbors.
Correlation to Class/Textbook
The article correlates to this class and the textbook International Business, The Challenges of Globalization. The book uses culture to express real-world examples and bring international business to life. COVID-19 has ushered in a new climate in the business environment, fuelling the nationalist narratives. Globalization is experiencing a significant setback as countries try to reduce infection rates by limiting international trade (Alon & Bretas 257). With various measures put in place, there has been a global disruption of supply chains. Many countries in Africa and Asia that rely on single export products have suffered severely from these measures. The pandemic is seen as the cause of tumbling oil prices and the reduced demand for other products from third-world countries. Initially, the economic impacts of globalization were measured based on the workforce. However, the pandemic has caused a significant burden on the world economy and globalization through travel restrictions, event cancellations, and the employee workforce.
Globalization benefits businesses through expanded customer bases, increased revenues, and a diverse workforce. It increases global cooperation, spreads technology, and access to new talents and skills. However, various challenges are associated with globalization, including legal compliance issues and worker exploitation. Globalization also faces problems of international recruitment together with foreign worker exploitation. Problems with immigration and loss of jobs for locals have been addressed by many countries, thereby pausing a great threat to global business activities. The article discusses the trends and challenges associated with globalization to businesses and trade organizations. Because of these challenges, the world’s largest multinationals have displayed a solid home-region orientation with the effects of COVID on their operations. Close 70% of international companies have equity subsidiaries within their home regions (Zahra 118). The remarkable rise of China as an export powerhouse has generated both admiration and concern. The 2020 UNCTAD data showed that China accounts for 15% of total exports of the global market (Zahra 115). After China, the two other countries are the United States and Germany, each accounting for 8% of the total world exports. China has increasingly focused on its domestic market due to its strong economy, thereby making it a source of help to international companies during the pandemic. Many countries have borrowed loans from these leading countries to help their citizens fight the virus.
Opinion
The article is well thought out and timely research work that elaborates on the significant globalization and international business issues during COVID-19. The pandemic is a global issue subject to discussion by local and international businesses. The article uses research data from credible sources to show how the world’s economy has changed with businesses trying to adapt to the new environment created by the pandemic (Pisani). I find this article relevant to this study because it shows how leading global companies need to evaluate their activities in the worldwide market to sustain their existence in the post-COVID-19 world. Even though the views expressed in this article are those of the authors from prior studies, Niccolo Pisani gives further proof to justify the research works. The choices of international organizations today will determine their future presence in the global market (Zahra 132). The report gives figures and chats to prove the trends in international trade before and during the COVID-19 pandemic and the expectations after the pandemic. Many companies have seen the challenges of globalization during COVID-19 and are now resorting to working locally and reducing their engagements in the international market. Many countries have also encouraged their investors to invest in local companies for fear of losing a considerable amount of funds.
Conclusion
In conclusion, the outbreak of COVID-19 greatly affected the flow of trade around the world. The article highlights the relationship between international business and globalization during COVID-19. While international organizations struggle to recover from the effects of the pandemic, various trends are expected to emerge in the post-COVID era. The article teaches that the COVID-19 pandemic led to the rise of a new force in international business, a power that controls a more significant percentage of world export. However, this article warns global industries and businesses to take precautions to set their firm foundation on the worldwide market. It relates to me as a business student and my friends in the business class who would want to join the post-COVID business environment. It highlights expected trends in international business, which can be used by any person joining the global industry. The World Trade Organization must organize global business partners to employ measures that see a favorable international business environment.
Works Cited
Alon, Ilan, and Vanessa Bretas. “COVID-19 and International Business.” International Business and Management, 2021, pp. 253-268.
Donthu, Naveen, and Anders Gustafsson. “Effects of COVID-19 on business and research.” Journal of Business Research, vol. 117, 2020, pp. 284-289.
Pisani, Niccolo. “The Changing Landscape of International Business Post-COVID-19.” Industrial Analytics Platform, Web.
Zahra, Shaker A. “International entrepreneurship in the post Covid world.” Journal of World Business, vol. 56, no. 1, 2021, pp. 101-143.