What is Globalization?

Globalization is a difficult term to define because it has come to mean so many things.
In general, globalization refers to the trend toward countries joining together
economically, through education, society and politics, and viewing themselves not
only through their national identity but also as part of the world as a whole.
Globalization is said to bring people of all nations closer together, especially through
a common medium like the economy or the Internet.

In our world, there are few places a person can’t get to within a day of travel, and few
people a person can’t reach via telephone or Internet. Because of modern modes of
travel and communication, citizens of a nation are more conscious of the world at
large and may be influenced by other cultures in a variety of ways. Time and space
matter less, and even language barriers are being overcome as people all over the
world communicate through trade, social Internet forums, various media sources, and
a variety of other ways.

Arguments for globalization include the following:

• It is reducing poverty worldwide.

• It is allowing access to technology in developing countries.
• It promotes world peace.
• It has benefited women and children’s rights.
• It raises life expectancy.

Arguments against globalization are likely to come from people or nations who wish
to resist trends in the global society. For instance, a Fundamentalist Islamic country
may resist globalization because they see it as equivalent to westernization—
weakening the religious strength of a country and exposing its people to corrupting
ideas. Similarly, globalization may be feared or a matter of a concern to any country
with strong isolationist policies. In the US, much of the arguments for resisting
globalization come from conservative groups.

Some people worry about how certain trends, such as outsourcing, might affect the
nation. Concern exists that while outsourcing might benefit a nation which gets jobs,
this takes jobs from the country or company that outsources. In this way, though the
economy of the world is more globalized, the economy of an individual nation might
suffer.

Even though globalization may be a subject of argument, it’s highly unlikely to end
any time soon. It would take mass destruction of all modern methods of
communication and transport, in addition to all countries taking strong isolationist
policies in order to reverse the globalization trends in the world. This doesn’t mean
that some nations or people won’t resist what they view as globalization, but you
could compare this trend to a runaway train. At this point, there is little to do to stop
the communication of minds all over the world through vehicles like the Internet.
Even teens and kids are communicating with children from “the four corners” of the
globe. It’s therefore unlikely that globalization will experience a downward trend, and
will likely continue to influence our world in myriad ways.
globalization

Definition
Name for the process of increasing the connectivity and interdependence of the
world's markets and businesses. This process has speeded up dramatically in the last
two decades as technological advances make it easier for people to travel,
communicate, and do business internationally. Two major recent driving forces are
advances in telecommunications infrastructure and the rise of the internet. In general,
as economies become more connected to other economies, they have increased
opportunity but also increased competition. Thus, as globalization becomes a more
and more common feature of world economics, powerful pro-globalization and anti-
globalization lobbies have arisen. The pro-globalization lobby argues that
globalization brings about much increased opportunities for almost everyone, and
increased competition is a good thing since it makes agents of production more
efficient. The two most prominent pro-globalization organizations are the World
Trade Organization and the World Economic Forum. The World Trade Organization
is a pan-governmental entity(which currently has 144 members) that was set up to
formulate a set of rules to govern global trade and capital flows through the process of
member consensus, and to supervise their member countries to ensure that the rules
are being followed. The World Economic Forum, a private foundation, does not have
decision-making power but enjoys a great deal of importance since it has been
effective as a powerful networking forum for many of the world's business ,
government and not-profit leaders. The anti-globalization group argues that certain
groups of people who are deprived in terms of resources are not currently capable of
functioning within the increased competitive pressure that will be brought about by
allowing their economies to be more connected to the rest of the world. Important
anti-globalization organizations include environmental groups like Friends of the
Earth and Green peace; international aid organizations like Oxfam ;third world
government organizations like the G77; business organizations and trade unions
whose competitiveness is threatened by globalization like the U.S. textiles and
European farm lobby, as well as the Australian and U.S. trade union movements.
Globalization
Globalization refers to the trend towards a more integrated global economic system.
Two key facets of globalization are;

# The globalization of markets- Refers to the merging of historically distinct and

separate national markets into one huge global market place. E.g . Coca Cola, Sony.
They are also facilitators of it. By offering a standardized product worldwide they
help to create a global market. The most global markets currently are not markets for
consumer products-Where national differences in tastes and preferences. But for
industrial goods and materials that serve a universal need the world wide.
E.g . Aluminum, Oil,Wheat.

# The globalization of production- Refers to the sourcing of goods and services

from locations around the globe to take advantage of national differences in the cost
and quality of factors ofproduction (labor energy, land, and capital).E.g . Boeing
Company’s jet airliner 777- 8 Japanesesuppliers make parts for the fuselage, doors
and wings, A supplier in Singapore makes the doorsfor the nose landing gear, Three
suppliers in Italy manufacture wing flaps
What is good about globalisation?

- It delivers higher living standards to more people.

- The more people specialize and trade the higher average incomes will be.

- It spreads best practice and new ideas rapidly.

- It allows many to enjoy global brands.

- Large companies can put more money into research, innovation, sales and service.

- It allows more people to live the Hollywood dream.

- Creates the potential for footballers, pop and film stars and others to become
fabulously rich.

- Richer is cleaner  it is good for the environment.

- It allows poorer countries to develop and cuts poverty.

- Instant news and communications exposes tyrants and bad governments to more
international pressure.

- If you do not like the products of global companies you do not have to buy them.

What is bad about globalisation?

- It is a new form of imperialism led by the United States of America.

- It damages the environment.

- It accentuates the gap between rich and poor.

- It leads to exploitation of cheap labor and of developing countries.

- It substitutes material values for more spiritual ones

Barriers to International Trade

1.Social and Cultural Differences

- Language: Potential problems include mistranslation, inappropriate messaging, lack

of understanding of local customs and differences in taste.

- Values and Religious Attitudes: Differing values about business efficiency,

employment levels, importance of regional differences, and religious practices,
holidays, and values about issues such as interest-bearing loans.

2. Economic Differences

- Infrastructure: Basic systems of communication, transportation, energy facilities,

and financial systems.

- Currency Conversion and Shifts: Fluctuating values can make pricing in local
currencies difficult and affect decisions about market desirability and investment
opportunities.
3.Political and Legal Barriers

- Political Climate - Stability is a key consideration.

- Legal Environment

• U.S. law

• International regulations

• Country’s law

- Climate of corruption. Foreign Corrupt Practices Act forbids U.S. companies from
bribing foreign officials, candidates, or government re

 Global business barriers

The country for the purpose of importing and for doing global business normally uses the following
three barriers:
1. Tariff Barriers
This is the trade barriers put on imports in the form of taxes, duties etc. As a result of which the
imports are fewer and the cost rank of imported goods climb up and the demand for them reduces.

2. Non Tariff Barriers

This is the trade barriers that restrict imports but are not in the usual form of a tariff. A fix quantity is
restricted for the importing goods that make the cost level of the imported products high and the
supply of overseas goods become limited.

3. Voluntary Constraints
The last trade barrier is the one in which the country itself voluntarily discontinues the incoming
goods. As a result of this barrier the country has authority to discontinue the imports coming
frequently into the nation and restrict the competition of the overseas goods with the local industries.

These three kinds of trade barriers should be taken into consideration when selecting to trade
globally. Mostly lower developed nations and the developing countries uses these sorts of trade
barriers for their global trade and international business.

The benefits of these barriers are as follows:-

• Country receives foreign exchange by placing Tariff and non-Tariff barriers.

• The local industry of the nation is safeguarded by the overseas competitive industries.

• Less of products are imported into the country as a result of which customer also buys local items.

• The currency remains in the country as a result of which government expands profits in the form of
revenue.