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The Process of Globalization and Its Impacts on International Business Activities
Profoundly, globalization is the faster and closer integration of nations worldwide. It
arises from the enormous declines in transport and communications costs. It is due to the
elimination of artificial obstacles to the flow of services. The elimination of goods,
knowledge capital and to a lesser degree, individuals across borders also contributes.
Globalization is an all-encompassing term used for a multifaceted series of social, economic
and technological concepts. It also includes political and cultural changes understood as
increasing integration. Interaction and interdependence between individuals and corporations
in disparate locations also plays a role (Campanella 2).
The process of Globalization instigated in the 15th century with the development of
capitalism, and successively spread to different nations worldwide. In effect, the exploitation
and subjugation of Third World nations in Latin America, Australia, Asia, Africa and North
American white foreign settlements are examples where the globalization process originally
started. From the opening stage, the globalization process had its origins in colonialism (Nam
35, Rourke and Williamson 15). Economies opened up for growth in the First World nations
at the expense of the exploitation of the Third World nations (Process of Globalization para
3). Presently, the nature of globalization hinges largely on the attitudes of the colonialist
rulers. It was vital for the rulers to distinguish people based on their social strata, which
allowed them to exploit the Third World nations by extracting labor forces, labor and raw

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materials for meeting their military and administrative necessities. This way, the wealthier
nations continued to thrive while they pushed poor countries towards poverty (Muller 167).
The subsequent step of globalization focused on inter-imperial moneymaking
activities. The reciprocal trade between the European countries, the US and Japan formed a
sequence of clusters on regional level, accompanied by the governing powers. This scenario
birthed corporations and competition in the commercial circles, causing the multinationals to
struggle for control over the markets. They similarly collaborated to exploit the Third World
markets more efficiently (Campanella 5).
Foreign trade is a key part of globalization. Exchanges of goods on a global level
include the many classes of the social order along with the commercial markets. This
association helps globalization realize class character. Vis--vis the form of globalization, it is
principally cyclic in nature, shifting with several phases of countrywide economic
developments (Nam 45). Indeed, globalization derives its rising feature from the capital
forces that defeats the labor class, small political parties and farmers. This leads to the
conquest of nations, where lifestyles decline and there is the promotion of export tactics
(Process of Globalization para 4). The development of the globalization process includes
the commencement of class conflict. It also includes the shrinking of profits throughout the
founding of 'welfare state'. The globalization process is indeed not a new concept. Its
historical sequence of rise, decline and integration is a result of the socio-political situation of
a particular country (Muller 173; The Effects of Globalization para 1).
The Impacts of Globalization
International business is a wide array of business undertakings embarked on across national
borders. International business in company with speedily increasing globalization has become
a widespread subject and has drawn the attention of government officials, academics and

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business executives. International business is dissimilar from the local business. At the
worldwide level, the globalization of the international economy and the dissimilarities
between nations present both challenges and opportunities to global businesses. Business
executives need to consider the globalized business setting when making global tactical
decisions and in managing continuing worldwide operations (Campanella 7).
Globalization in the social, political, and economic fields has been rising since the
1970s, getting a particular lift after the culmination of the Cold War. Numerous economists
maintain that globalization may be the cause of key tendencies in the world economy, for
instance, higher profits, lower wages for workforces in Western economies, high immigration
and low interest rates and low inflation notwithstanding sturdy growth (Park para 3).
Globalization has fast-tracked in the last two decades. All through a period of moderately
robust economic growth, global exports as a part of GDP increased from below 20% in 1994
to above 32% in 2008, and even as worldwide trade declined in 2009, due to the global
stoppage, but rebounded in 2010 (Muller 185).
Economists propose the use increasing foreign investment as one measure of
increasing economic globalization. Another measure is the foreign direct investment (FDI) of
foreign proprietorship of productive assets, for instance, factories, land, and mines. The
largest streams of foreign investment arise between the industrialized nations (Park para 3).
In recent years, however, the flows out of and into emerging nations has grown meaningfully.
Following the universal recession, the world GDP fell by more than 1% in 2009. Some of the
globe's key emergent economies suffered severe recessions in 2009, whereas others markedly
China and India, managed to maintain steady growth (Laszlo 95).
Organizations encounter global forces of supply, demand, global market competition,
their significance to global issues, political developments, and demographic changes rather

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than remaining sheltered by local setting. The net effect of the same factors rather than being
mere subjects to local trends and situations affects stakeholders interests. This situation
applies to all stakeholders including investors, labor, suppliers, business managers, farmers,
administrative bureaucrats and politicians, consumers, government servants, men and women
and the young, and the old (Laszlo 96; Park para 3). It similarly applies to all organizations
types including business firms, governments, civic authorities, trade associations, NGOs,
cultural and social organizations, civil societies, religious establishments, research and
education institutions, scientific bodies, political parties, multi-lateral organizations, the
terrorist outfits and the military organizations (Process of Globalization para 3). Those who
cannot acclimatize to the worldwide forces ultimately lose their relevance and find it difficult
to survive. Those who change and adjust as the globalization continues, convert international
opportunities into strategies, which strengthen them and make them constantly relevant and
handle the dangers from the environment more efficiently (Laszlo 97; The Effects of
Globalization para 2).
According to scholars, globalization has several facets that affect the world many
different ways including industrial, financial, economic, political, informational, culturalecological, and social and transportation aspects. A leading phenomenon has become the
leading factor in global business life throughout the past few decades. It affects the
international business in different ways including increased competition worldwide (Hankiss
137). This competition can be associated with product and service price and cost, target
market, quick response, technological adaptation, fast production by corporations among
others. When a corporation produces with fewer budgets and sells at a cut-rate price, it can
grow its market share. With heightened competition from foreign companies and brands,
industries of all nations are obliged to increase their quality standards along with consumer
satisfaction services. These changes benefit the consumers and the economy at large and raise

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the living standards of every person. Many could view this high competition as a negative
influence, but few can disclaim its telling impact (Muller 187).
Another impact of globalization is the rise in competence and technology. The
increase in levels of knowledge of nations as newer technologies and cultures fall out to a
specific area are apparent, their knowledge base similarly expands and grows simultaneously.
Consequently, they can better handle their secondary and primary industries, and this
eventually affects their tertiary sectors in a positive very as well (Hankiss 143; The Effects
of Globalization, para 4).
Globalization also increases opportunities for people to grow exponentially due to the
larger number of resources and industries available. There are numerous additional jobs
available to publics. More individuals look up to the money-spinning advantages of moving
abroad. This situation also increases immigration rates, consequently allowing people to grow
socially and economically (Campanella 13).
Globalization also increases investment levels. The upsurge in foreign investment in
nations helps industries along with native cities grow at a fast pace. Moreover, it is
something, which all nations ought to be open to as it is a greatly advantageous venture for
them (Cate para 3). Every nation currently imports more than ever before, hence that global
growth has distributed resources and abilities in outstanding ways (The Effects of
Globalization, para 4). Globalization also allows companies to meet consumer tastes and
expectations. In general, consumers with high income have high demands. This situation
compels companies to meet greater standards (Nam 39).
It also influences the choice of location. Through globalization, businesses are
currently much freer to pick out where they wish to operate from, and can relocate to a lowpriced and more effective location. Over the past ten years, many businesses have started

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viewing the globe as a lucrative business location (Park 3). The amplified movement of jobs
and businesses has enforced governments to compete with one another in offering low-cost
and attractive locations. Companies now have extra freedom of movement in order to acquire
cheaper inputs, such as labor in developing nations. One constraint on this situation is that
executives will not continuously move to some nations if living conditions are dangerous or
unpleasant (Laszlo 99).
Globalization expedites information exchange. Information is a most valuable and
costly production element in the existing environment. It can easily exchange and transfer
from one nation to another. If a corporation has an opportunity to use information and
knowledge resourcefully, then it can adapt to this international shifting (Cate 1). This issue is
comparable to the technology transfer matter in worldwide markets. The fast changing of the
market similarly necessitates quick transfer of knowledge as well as effective usage of that
information and knowledge (Wild and Wild 65).
Globalization also affects multi-cultural and multi-national management, which is a
key challenge to companies and their bosses. A multi-national corporate setting is more
compound with more variables, and more problematic to manage (Cate para 2). A multicultural work policy leads to workers of many different languages, religions, cultures,
nationalities and ethnicities in different offices globally. These workers react in different ways
to fringe benefits and motivation. It is hard to find executives who are sensitive to all these
diverse factors. It is easy for them to offend and demotivate workers unintentionally
(Campanella 15).
The opening up of worldwide markets and enhancing intercultural communication
creates numerous opportunities to source low-cost, high-quality labor and materials.
Outsourcing is when companies use less expensive, foreign labor for undertakings

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traditionally executed locally. In nations such as India, outsourcing brings unequalled
economic wealth to the people. Developed countries often do not realize that for all people
who lose their jobs to outsourcing, other people- frequently in a more economically dejected
situation- gain employment (Hankiss 139).
Conclusion
Globalization is the fundamental dynamic for international trade. This new age of
globalization brings opportunities and new challenges and considerations with the changing
aspects of a free market (Park para 3). It provides access allowing countries and people to
benefit from the inter-cultural exchange, global division of labor, worldwide specialization,
technologies, and the customers enjoy a wider assortment of goods at lower prices.
Globalization emboldens a higher thinking level and improved managing. Business evolves
in newfangled ways (Hankiss 146; Process of Globalization, para 3).

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Work Cited
Campanella, M. L. "Globalization: Processes and Interpretations." World Futures (1990): 116. Print.
Cate, Roel Van Den. "The Impact of International Trade on less Developed
Countries."Www.saycocorporativo.com. 13 Mar. 2009. Web. 17 Apr. 2015.
Hankiss, Elemer. "Globalization and the End of The Nation State?" World Futures (1999):
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<http://www.tandfonline.com/doi/abs/10.1080/02604027.1999.9972735#abstract>.
Laszlo, Ervin. "Globalization: The Outer and the Inner Dimensions." World Futures (1999):
95-100. Taylor and Francis Online. Routledge. Web. 17 Apr. 2015.
<http://www.tandfonline.com/doi/abs/10.1080/02604027.1999.9972732#preview>.
Muller, Robert. "Globalization: The next Development of the International System." World
Futures (1999): 165-87. Taylor and Francis Online. Web. 17 Apr. 2015.
<http://www.tandfonline.com/doi/abs/10.1080/02604027.1999.9972737#abstract>.
Nam, Binh. Globalization and Emerging Issues in Trade Theory and Policy. United
Kingdom: Emerald, 2008. 33-65. Print.
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"Process of Globalization." Economy Watch. 2 Mar. 2010. Web. 17 Apr. 2015.
Rourke, Kevin H., and Jeffrey G. Williamson. Globalization and History the Evolution of a
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"The Effects of Globalization On Marketing Strategy And Performance." Web. 17 Apr. 2015.
Wild, John J., and Kenneth L. Wild. International Business: The Challenges of Globalization.
4th ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2008. Print.