The internationalization of finance and commerce has been brought about by the great advances in transportation, communications, and information processing technology. This development introduces a dramatic new commercial reality - the global market for standardized consumer and industrial products on a previously unimagined scale.
It places primary emphasis on the one great thing all markets have in common the overwhelming desire for dependable, world class products at aggresively low prices. The international integration of markets also introduces the global competitor, making firms insecure even in their home markets.
The transformation of the world economy has dramatic implications for business. American management, for example, is learning that the United States can no longer be viewed as a huge economy that does a bit of business with secondary economies around the world. Rather, the United States is merely one economy, albeit a very large one, that is part of an extremely competitive, integrated world economic system.
To succeed, US companies need great flexibility, they must be able to change corporate policies quickly as the world market creates new oportunities and challenges. Big Steel, which was virtually ghe antithesis of this modern model of business practice, paid the price for failing to adjust to the transformation of the world economy. Similarly, non US companies are finding that they must increasingly turn to foreign markets to source capital amd technology and sell their products.
Today's financial reality is that money knows no national boundary. The dollar has become the world's central currency, with billions switched at the flick of electronic blip from one global corporation to another, from one central bank to another. The international mobility of capital has benefited firms by giving them more financial options, while at the same time complicating the job of the chief financial officer by increasing the complexity.
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