UNIT 7

Business Globalization

Table of Contents

Introduction3

Reasons for the Growth of Globalization3

Advantages of Trading Blocs3

Changes in the balance of world trade during course of the 20th Century to Present Day4

Advantages of Globalization to an Organization6

Economies of scale6

Reasons Why Globalization has led Organizations Finding Cheaper Resources6

Cultural Dimensions of Globalization7

Social and Economic Change7

Cultural Diversity and Innovation8

Implications of Globalization for Organizations and their Management9

Globalization and Employees9

Globalization, Poverty and Hardship10

Conclusion12

Business Globalization

Introduction

The study is about the business and globalization. Globalization in context to business refers to various processes that link national and regional economies, societies, and cultures. Globalization has been influenced by economic factors (trade, foreign direct investment, capital flows, and migration); by the spread of technology; and by increasing transnational circulation of ideas, languages, and popular culture. Although the term has been widely used among economists and social scientists in recent decades, views on its nature differ. Business globalization encompasses everything from global financial markets to the internet but which delivers little substantive insight into the contemporary human condition.

Reasons for the Growth of Globalization

Advantages of Trading Blocs

A trading bloc is formed between a group of nations that think the reduction, in other words elimination of restrictions and tariff in trade between them would benefit their economies. The block trade is an agreement between the governments, in many cases part of a regional intergovernmental organization, where the barriers to regional trade (tariffs and non-tariff barriers) are reduced or abolished between the participating countries.

The advantages of trading blocs' serves as an international organization that brings together a group of countries for the purpose of mutual benefits in trade and general economic, notwithstanding that in most cases, the formation of blocs of countries has political motives. These forms of union between countries made from the signing of international treaties that may be of different types. European Association for Free Trade is an organization of free trade between the four European countries to work in parallel, and linked to, the European Union (EU). It founded in the May 3, 1960 as an alternative trade bloc of European countries who either could not or chose not to join the then European Economic Community (EEC), now known as the European Union (EU) (Appiah, 2006, 12-28). Most trading blocs currently defined by a regional trend, while non-business relationships tend to be regional bilateral trade between blocks or be in training. Economic Union is the highest degree of integration. It is characterized by creating a common market where, in addition, there is a total currency and harmonization of economic policies of member countries (Artadi & Sala-i-Martin, 2003, 19-35).

Changes in the balance of world trade during the course of the 20th Century to Present Day

The expansion of international trade in the 20th century has contributed to unparalleled economic growth. Global per capita GDP has increased almost fivefold, although this growth has not been uniform. The strongest expansion came during the second half of the century, a period of rapid global trade expansion. No doubt, the tremendous expansion in global prosperity, in the second half of the ...