Table of the content
Introduction…………………………………………………………..3
What is Globalization…………………………………………….4
The engines for Globalizations 5
Globalizations impacts on international business 7
The road ahead for international business 9
Summary 11
Reference 12
Introduction
Every day we hear it on the news, read it in the papers, overhear people talking about it.
and in every single instance the word globalization seems to have a different meaning. So,
what is globalization? What are its main drivers? Why and how does globalization impact
international business? Whats the future of international business? This paper, through
conceptualizing the significance of globalization for international business and explore
core concepts of the international business environment, will answer the above questions.
What is Globalization?
Globalization can be described as a process by which the people of the world are unified
into a single society and functioning together. This process is a combination of economic,
technological, sociocultural and political forces. Globalization, as a term, is very often
used to refer to economic globalization, that is integration of national economies into the
international economy through trade, foreign direct investment, capital flows, migration,
and spread of technology. The word globalization is also used, in a doctrinal sense to
describe the neoliberal form of economic globalization.Globalization is also defined as
internationalism, however such usage is typically incorrect as “global” implies “one world”
as a single unit, while “international” (between nations) recognizes that different peoples,
cultures, languages, nations, borders, economies, and ecosystems
exist(http://en.wikipedia.org/).
Globalization has two components: the globalization of market and globalization of
production. Globalization of markets moving away from an economic system in which
national markets are distinct entities, isolated by trade barriers and barriers of distance,
time and culture, and toward a system in which national markets are merging into one
global market. Globalization of production is a trend by individual firm to disperse part of
their productive processes to different locations around the globe to take advantage of
differences in cost and quality of factors of production (Hill C.W.L., 2006).
The engines for Globalizations
What factors spur globalization? Are there driving forces that facilitate or promote the
spread of globalization? Considering that globalization has accelerated in the last decades,
answers to these questions can be sought by identifying changes that have occurred over
the latter part of the last century that may have magnified the globalization trend. Among
the many possible engines that push it forward, six are most prominent (http://tutor2u.net):
o Improvements in transportation including containerization * the reduced cost of shipping
different goods and services around the global economy helps to bring prices in the
