Netherlands globalization impact

Netherlands Globalization Impact

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According to Luthans and Doh, globalization is an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade. [4] The impact of globalization varies significantly for each country. For the purpose of this assignment, I will focus specifically on the Netherlands. In order to fully recognize the impact, one must consider some of the main contributing forces, the involved stakeholders, and the resulting implications they have on international management practice. Forces contributing to globalization in the Netherlands include technology, migration, and transportation. These forces have a major impact on various stakeholders. Some of the stakeholders include domestic companies, farmers, and different demographic groups. The relationship between the contributing factors and the stakeholders impact international management practices in various ways. Each will be discussed to illustrate the overall impact of globalization on the Netherlands.

To begin, it is important to understand some characteristics of the Dutch business environment. According to doingbusiness.org, the country is highly ranked on many business aspects. It is listed as 18th out of 183 economies for overall ease of doing business and for starting a business. They are ranked 19th for employing workers, 10th for paying taxes, and 21st for protecting investors. Finally, and most importantly in terms of globalization, the Netherlands is ranked 6th for trading across borders. These high business rankings exemplify the impact that globalization has had on this country.

The Netherlands’ GDP, as of 2008, was $827 billion. The majority, about 73.6%, of the GDP comes from services. In addition, this country does not have significant trade or investment barriers, which makes it a very approachable market for U.S. exports as well as important investment partnerships. With that being said, the Netherlands is very involved with U.S. trade. Overall, the Netherlands is the 8th largest destination for U.S. exports and 4th largest direct investor in the United States.

To understand how globalization has impacted this country, its stakeholders, and international business practices, it is important to first examine the contributing forces. From there, conclusions can be made about the impact such forces have on the Netherlands. Finally, implications can be drawn about the impact globalization has on the country.

Technology is one of the most crucial components of globalization. It allows for integration and communication among regional economies, societies, and cultures. In particular, logistics is an especially important sector of technology, as it coordinates complex operations. Approximately 10% of the Netherlands’ GDP is generated by logistics activities alone. The Port of Rotterdam is vital to its’ world-class logistics infrastructure. It is the number one container port in Europe and ranks third worldwide on a total tonnage basis. Overall, it claims a 45% market share in Northwestern Europe. In addition, the Netherlands has invested heavily in high-speed Internet and advanced cable and digital telecommunications systems. This makes them one of the most “wired” countries in the world. The amount of broadband connectivity in the Netherlands is ranked second highest in the world. Finally, the country maintains a steady expansion of its’ technology through research and development projects. The number of jobs associated with those projects increased from 55 in 2005, to 187 in 2007. This demonstrates continued technological innovation. Overall, the Netherlands’ expansive technology infrastructure is a significant force contributing to globalization in this country.

Advanced technology in the Netherlands has a great affect on domestic companies. The developed infrastructure allows companies to communicate with business partners in a more efficient manner. Travel time and expenses are saved, as collaboration on business operations from different regions is possible. The advanced communication technology also benefits customers. For example, ordering processes are streamlined through the internet. A client is able to shop, place an order, and make a payment in one single process. This in turn generates greater revenues for the business. Overall, the international business practices conducted by domestic companies are significantly impacted by the advanced technology available in the Netherlands.

Migration is also a major force of globalization in the Netherlands. Amsterdam alone is home to over 200 different nationalities, making this country highly diverse. [3] The Dutch government protects the development of a multicultural society, which is demonstrated in its’ Constitution. The freedoms of religion, culture, and language are specifically protected. Not only is the society diverse, it is highly educated. The culturally sensitive environment promotes education of multiple languages, resulting in a bilingual society. Additionally, the Dutch require 13 years of schooling with an attendance rate of nearly 100%, and a literacy rate of 99%. [6] Therefore, the Dutch society is culturally sensitive, diverse and highly educated.

Migration into the Netherlands has had a major impact on the country’s workforce composition. The diversified society offers a strong applicant pool for domestic businesses. Workers who are bilingual and highly educated offer the ability to communicate internationally. In addition, a culturally sensitive workforce makes international business easier. The workers know and understand specific cultural taboos. For example, when working in Middle Eastern countries, individuals will know not to shake with their “unclean” left hand. Particular cultural customs such as this are important to realize and understand when conducting international business.

The Netherlands is positioned in the heart of Europe’s transportation network. Train systems, highways, waterways and airports are just a few of the transportation methods available in this country. The train system utilizes 1,745 miles of track, ultimately covering the entire country. This is useful in the transportation of imported and exported goods. The Netherlands also has an extensive highway system consisting of about 78,028 miles, [5] which makes it one of the most dense highway networks in the world. As mentioned earlier, the Netherlands also has several ports upon which goods can be easily transported. The Port of Rotterdam and Port of Amsterdam are the largest in the country, accounting for two thirds of the system. In addition, the Netherlands has several airports. One of the most important is Amsterdam’s Schiphol Airport, which is ranked third among Europe’s cargo airports. Overall, the Netherlands offers several modes for transporting goods, a major force in globalization of this country.

Major stakeholders, such as farmers and domestic companies, are positively impacted by the availability of international transportation systems. Domestic farmers are able to export their goods to many outside countries, expanding their global outreach. Domestic companies are affected in the same way. They too can export goods to a larger customer base. Overall, the extensive transportation system available in the Netherlands allows for greater exportation of goods and therefore expands international business.

As discussed earlier, globalization is an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade. The Netherlands is a country that exemplifies this very definition. This country stresses the importance of technology, transportation, and migration which has lead to success in globalization. With a continued effort to make use of and expand upon the existing global forces, the Netherlands will continue to succeed greatly in terms of international business and overall globalization.

Works Cited

1. “2008.” European American Business. Web. 22 Mar. 2010. <http://www.european-american-business.com/2008/index.php>.
2. “Doing Business in Netherlands – Doing Business – The World Bank Group.” Home – Doing Business – The World Bank Group. Web. 22 Mar. 2010. <http://www.doingbusiness.org/ExploreEconomies/?economyid=137>.
3. “Globalization in the Netherlands: History and Modernity.” Diss. St. Petersburg State University, 2007. Feb. 2007. Web. 22 Mar. 2010. <http://www.soc.pu.ru/inf/ReaderStPetersburg2007.pdf>.
4. Luthans, Fred, and Jonathan P. Doh. International Management: Culture, Strategy, and Behavior. 7th ed. Boston: McGraw-Hill Irwin, 2009. Print.
5. “Netherlands -.”Wikipedia, the Free Encyclopedia. Web. 22 Mar. 2010. <http://en.wikipedia.org/wiki/Netherlands>.
6. “Netherlands (01/10).” U.S. Department of State. Web. 22 Mar. 2010. <http://www.state.gov/r/pa/ei/bgn/3204.htm#econ>.