GLOBALIZATION

Impact of Globalization on Multinationals

Impact of Globalization on Multinationals

Introduction

The term Globalization is broadly used as the process through which an ever-expanding free flow of goods, services, capital, peoples, and social customs leads to further integration of economies and societies worldwide (Stephens, 2008, 89-96). This phenomenon is hardly novel, albeit the process of integration has dramatically accelerated over the past few decades. The world has experienced successive waves of globalization (Stephens, 2008, 89-96). Today, almost all national economies are integrated into a single global marketplace through trade, finance, production networks, and a dense web of international treaties and institutions (Stephens, 2008, 89-96).

Global trade liberalization boosts the demand for exports of goods that intensively use unskilled labour and, as a consequence, boosts unskilled wages relative to skilled wages and capital earnings (Stephens, 2003, 12-18). The speed and intensity of global integration has provoked fierce debates about the consequences, implications, and future trajectory of globalization. Drawing on a vast and growing body of research, the following sections elucidate the complexity of the phenomenon called globalization (Stephens, 2003, 12-18).

In the global economy modern, relations between people, regions and countries are not accidental or passive, they are mechanisms for integrating assets that enhance and change the international economic life. Globalization has transformed the way companies conduct their operations organizations, but above all, has had a major impact on the organization itself, so the profile of its members is different (Smith, Debrah, 2002, 102-129). In our country today is not sufficient to have a bachelor's degree to be competitive, it is necessary to specialize, to know the strategies international master several languages ??and be open to opportunities for employment (Smith, Debrah, 2002, 102-129).

Discussion and Analysis

Forces Driving Globalization

There are many forces that drive the process of globalization; but, the most important among them are discussed below

Improvements in transportation technology

The shrinking globe is a factor that has a tremendous impact on the process of globalization air travel, container ships, tankers; and sophisticated infrastructure.

Improving the technology of communication

Coordination in the world is becoming easier, the Internet

Lower trade barriers

NAFTA (North American Free Trade Agreement), GATT (General Agreement on Tariffs and Trade) and VTO; MFN Principle (The principle of granting MFN)

Low barriers to investment

NT Principle (The principle of national treatment) guarantees non-discrimination against foreign companies; 5. Integration of financial markets: the high level of international capital mobility, increased market transparency.

The similarity in tastes

As per capita incomes similar to those among the nations (OECD) ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (Europe, North America, Japan), which in turn increased the similarity of consumers' tastes, making goods produced abroad more attractive than they were before. Greater similarity buying interest may occur as a result of intensive tourism, migration and development of international communications (Lipsey, Mucchielli, 2002, 201-236). For example, with the advent of new types of cuisine, British have added an average of 3.1 pounds of spices in food annually, almost a pound more than a decade ago.

Impact on Multinationals

Currently, the dynamism of trade is an essential element of economic growth, the main characteristic ...