On the Nature of Business and Globalization

Essay by kevingatreCollege, UndergraduateA+, September 2011

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I would define globalization as the continuous process of increasing integration and interaction between people, businesses and governments. This process is made possible by international trade and investment and accelerated by information technology. Increased competition among local and international businesses, increasingly demanding customers, and fast-tracked change are elements affecting all companies and forcing them to re-evaluate the nature of their business. Globalization is also greatly affecting the traditional factors of production which include land, labor, capital and enterprise or entrepreneurship.

The factors in increased globalization include:

  • Advancement and expansion of, technology

Technology is the biggest factor contributing to globalization because it removes geographical limits and makes time a minor factor in global trade.

  • Deregulation of cross-border trade and increased resource movements

Cross-border trade is increasingly getting easier for local and international businesses as free trade zones are created in virtually every continent to promote trade amongst neighboring countries resulting in common markets, preferential trade areas and free trade areas.

  • Improvement of facilities that aid international business

These facilities include videoconferencing which has developed to the point where it is gradually replacing the need for travel. Other facilities include telecommunication, sharing of information in various forms and the availability and affordability of personal devices of communication, storage and data transmission.

  • Growing consumer pressures

Consumers around the world are becoming increasingly similar in their choice of goods and services. This is demonstrated through the success of the iPod which is similar throughout the world regardless of the culture. Apple tried not to have a different product for different markets because it recognized that consumers have become globalized and now want to own the same things. Consumers are also pressuring companies to conform to similar standards of design and production. This is visible mostly in the automotive industry where car manufacturers are producing...