What is Globalisation

What is Globalisation
From general point of view, Redding (1999, p. 19) defines globalisation as the increasing integration between the markets for goods, services and capital and at the same time the breakdown of borders. Braibant (2002) says that the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC's, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution.
Thus, from many point of views, it is clearly that in most of the definition, the process of globalisation is seen as to breakdown of the following elements: borders between countries, governments, the economy and communities. It might also means the increasing liberalization and openness of markets, particularly through the elimination of barriers to trade in goods and services and the development of an integrated international financial market. Thus, simplified term of globalisation is “a process of increasing connectivity, where ideas, capital, goods, services and people are transferred across country borders.” PRUS (2001).
Why is it so Important in Today’s Business?

Globalization is the buzzword of today. Economies of the world are being increasingly integrated as new technology and communication has brought people together. Globalization is important because it aids in cross border trade and investment and is aided by information technology which has dramatically transformed economic life. It is a process of interaction and integration among people, companies and governments of different nations. Other reason such as:
Natural Advantages
Gaining access to markets around the world allows each country to fully leverage its own unique natural advantages. A natural advantage is an edge that allows countries in specific geographic regions to produce particular products or commodities at a lower cost or higher quality than others. Without international trade, natural advantages do not add much to the economy. For example, it wouldn't matter much to Saudi Arabia that the country sits on vast oil resources if it did not have the ability to sell and ship the oil around the world. It is the access to global trade that allows nations to accumulate wealth from all around the globe.
Trade Opportunities

The globalization of business processes and etiquette opens up new opportunities for importing and exporting products and services. A strong driver of globalization, for example, is the English language as an international business language. Using English, a businessman from Scotland can communicate clearly with a partner in China, who can communicate with a client in Africa and so on. The gradual melding of business etiquette helps to facilitate business communication as well. Issues, such as handshakes, speaking distance, body language and taboo topics of conversations, are beginning to lose their power as potential deal breakers as business people around the world study and understand each other's cultural norms.
Procurement and Outsourcing

The opening up of global markets and improvements in intercultural communication creates a wealth of opportunities to source high-quality, low-cost materials and labor. Outsourcing is when less expensive, foreign labor is used for activities traditionally performed at home. In some countries, such as the United States, outsourcing is seen as a growing evil. In others, such as India, outsourcing brings unparalleled economic prosperity to the people. Developed nations often fail to realize that for every individual that loses a job to outsourcing, another individual -- usually in a more economically depressed situation -- gains a job.
Economic Development

Globalization provides new opportunities to underdeveloped nations by allowing them access to new markets around the world. China and India have ridden the wave of globalization throughout the twentieth century and into the twenty-first, for example, and are rapidly becoming economic powerhouses. Even tribal groups in nations, like Brazil and Africa, can ride the wave of globalization, selling locally-made products around the world via the Internet to raise their standard of living.

Factor That Speed up the growth of Global Marketing Today.

Globalization is an umbrella term referring to the trend towards increasing economic, cultural, political and technological interdependence among national institutions and economies. Since the end of the Second World War, the world has slowly but steadily opened up to freer trade as countries have negotiated rules governing the flow of goods, services, money, people and ideas across national boundaries. Factor that speed up the growth of global marketing today such as:


Governments have taken steps to remove barriers to trade and the movement of finance through international organizations such as the General Agreement on Tariffs and Trade (GATT) and its successor organization the World Trade Organization (WTO) and they have also set up free trade areas, customs unions, or common markets.

• Free trade area—member states agree to remove tariffs and quotas on goods from other members of the area. Members have the freedom to set the level of tariff imposed on imports of goods from non-members of the area.

• Customs union— this is a free trade area but with the addition that members agree to levy a common tariff on imports of goods from non-members.

• Common market—this is a customs union but with the addition that member states agree to allow free movement of goods, services, capital, and labor.

There have been major reductions in the barriers to movement, particularly for goods and capital brought about by liberalization. These have been brought about multilaterally through negotiations in international institutions such as the General Agreement on Tariffs and Trade (GATT) and its successor organization, the WTO, or bilaterally between individual governments. Governments help bring about increased economic and political interlinkage by signing treaties setting up regional trade areas (RTAs) such as the North Atlantic Free Trade Area (NAFTA) with the involvement of the USA, Canada, and Mexico where barriers to movement such as tariffs and quotas are abolished among the members. Other examples are, The Association of Southeast Asian Nations (ASEAN) incorporating 10 countries in South East Asia, and Mercosur (Mercosur Trade Centre) comprising four countries in South America such asArgentina, Brazil, Chile, Uruguay and Paraguay.

Labor and Capital Migration
Increased global trade has made products more mobile. Factors of production have become more mobile, as well. As transportation costs have declined over the decades, more workers have migrated to other countries for education and work opportunities. Examples include the migration of workers from Mexico and South America to the United States, and the migration of Africans and Eastern Europeans to Western Europe.
Capital migration is another key factor in the global economy. Multinational firms, in a continued drive to expand into new markets have opened branches and production facilities around the world, going beyond the borders of the nations in which they started. One especially significant factor is the globalization of financial services.

Improvements in communications and reductions in transport costs have facilitated the movement of goods, services, capital, and people. Modern communications technology makes it easier for businesses to control far-flung empires. It further allows people to connect and interact over long distances, and with transport becoming easier and cheaper, goods and people is able to travel long distances quickly and at a relatively low cost.

Rise in Internet Penetration

There are over billion internet users in the world today. Take a look below at the phenomenal Internet penetration rates globally. This offers an ever increasing reach for businesses that use Internet Marketing to reach out to their market.
Internet Marketing Growth - Inreased Penetration


Buzzle : http://www.buzzle.com/articles/benefits-of-globalization/html
McMichael, Philip. 1996. Development and Social Change: A Global Perspective.
Rusdy Hartungi, (2006),"Could developing countries take the benefit of globalisation?", International Journal of Social Economics, Vol. 33 Iss: 11 pp. 728 – 743
Christine D. Reid, (2007) "Globalization: Encyclopedia of Trade, Labor and Politics", Reference Reviews,
Redding, S. (1999), "Globalisation", Economic Review, 1 Sept, Vol. 17 pp.16-19.
Braibant, G. (2002), "The past and future of public administration", International Review of Administrative Sciences, Vol. 68 No.3
PRUS (2001), "Globalisation and poverty", Poverty Research Unit – University of Sussex: (PRUS), No. 2, June, .

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