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Advantages and Disadvantages of Globalization

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Submitted By AyaGaafar
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Advantages of Globalization: * Resources of different countries are used for producing goods and services they are able to do most efficiently. * Consumers to get much wider variety of products to choose from. * Consumers get the product they want at more competitive prices. * Companies are able to procure input goods and services required at most competitive prices. * Companies get access to much wider markets * It promotes understanding and goodwill among different countries. * Businesses and investors get much wider opportunities for investment. * Pooling of production of different areas can reduce adverse impact of fluctuations in agricultural productions in one area.
Disadvantages of Globalization: * Developed countries can stifle development of undeveloped and under-developed countries. * Economic depression in one country can trigger adverse reaction across the globe. * It can increase spread of communicable diseases.
Companies face much greater competition. This can put smaller companies, at a disadvantage, as they do not have resources to compete at global scale. According to Lewis Henry, business is a human activity directed towards producing or acquiring wealth through buying and selling of goods. Moreover, the term business means continuous production and distribution of goods and services with the aim of earning profits under uncertain market conditions.

In my opinion the statement ‘the study of international business is no different from the study of domestic business. Thus, there is no point on having a separate course in globalization’ is false. On the first hand, the scope of international business is quite wide. It includes not only merchandise exports, but also trade in services, licensing and franchising as well as foreign investments. On the other hand, domestic business pertains to a limited territory. Though the firm has many business establishments in different locations all the trading activities are inside a single boundary.
Globalization can be sought of as the interconnectedness and interdependence of peoples and countries. Recently globalization has been seen as an important goal to be achieved by most of the countries around the globe. There has been a vast increase presence in the world’s market.
The Internet and the worldwide web have definitely affected globalization. The impacts of the Internet technology on globalization include the modernization and improvement in the business sector on a worldwide basis. Businesses improve their global competitiveness and productivity with more efficient electronic transaction processing and instant access to information. (Zunairah, 2008) In the 21st century, venerable trends in ITPS such as centralization and globalization are accelerating, and this is overturning and reversing the leverage ratios and thus introducing completely new capabilities. The Internet is impacting the way that services are bought, sold, and delivered, altering relationships among clients, firms, and employees and speeding the globalization of the consulting industry. There can be seen a better relationship between the clients and the firms through Internet which is globally seen all over the world. Instead of face-to-face meetings the clients can easily deal with the big firms and industries via Internet and thus developing a firm client relationship. (Zunairah, 2008)
Technology is considered to be one of the most prominent areas that characterize Globalization (Cantwell, 1995). The interplay between technology and globalization results in a wide range of networks and communication technologies that have contributed significantly towards changes in political, social and economic spheres of life in Third World Countries (Jimmy, 2003).
Changes in technology have definitely benefited globalization of markets and of production. The changes include improvements in transportation technology has allowed countries to advertise their products world wide, improvements in communication technology have facilitated negotiations across continents thus cutting down the communication expenses and lowering the expense of coordinating and controlling a global corporation, the improvements in information technology have helped companies gain worldwide exposure simply by setting up a homepage on the web.

References: http://www.enotes.com/soc/q-and-a/list-advantages-disadvantages-globalization-113517/ Akrani, G. (2012). Kaylan city life. Retrieved from http://kalyan-city.blogspot.com/2011/03/what-is-business-meaning-definitions.html
Dilip, C. (2012). Major difference between domestic and international business. Retrieved from http://dilipchandra12.hubpages.com/hub/Major-Difference-between-Domestic-and-International-Business
Mohr, A. (2012). chron.com. Retrieved from http://smallbusiness.chron.com/effects-economic-globalization-developing-countries-3906.html
Zunairah. (2008, May 08). The internet and globalization. Retrieved from http://socyberty.com/issues/the-internet-and-globalization/
Pereira, M. (2006, December 29). Globalization of technology. Retrieved from http://www.shvoong.com/humanities/474944-globalization-technology/
Hill, C. W. (2008). Globalization. Retrieved on August 16th 2012, from: wweb.uta.edu/management/Mosby/pptslides/Chap001.PPT

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