What Is Globalization in Business Studies

The following video provides a good introduction to the causes and consequences of globalization. There is no one-size-fits-all approach to globalization. Only you can decide what works best for your business. The global market still has great potential for the U.S. economy. With everyone in the world now just a text message, a click, a phone call or a plane flight, 95% of potential customers for goods and services are outside the U.S. and are willing to buy goods and services from other countries if U.S. producers are excluded from their markets. If U.S. producers want to reach these consumers, the U.S. must let foreign producers reach U.S.

consumers, as it has done over the years for cars, devices, smartphones, and other products Americans want. More open trade could add $540 billion to the U.S. economy by 2025, equivalent to annual income per person. Here are some of the crucial areas the United States should focus on, as described in numerous studies by the Peterson Institute and other political organizations. While these goals are simple and there are obviously challenges, the stakes are high in restoring confidence in a global system that has helped ensure prosperity and peace. The term globalization, as used today, became popular in the 1980s and reflects several technological advances that have amplified international interactions. The introduction of the personal computer by IBM in 1981 and the subsequent development of the modern Internet are two examples of technologies that have helped advance international communications, commerce and globalization. Another example of globalization is the response to the COVID-19 pandemic. Because the world was able to communicate across borders, nations could work together to rapidly produce vaccines against the virus. In addition, the doctors went where they were needed.

For example, at the beginning of the pandemic, Cuba sent doctors to Italy to support the crisis as it unfolded there. The OECD has set itself three objectives to address these problems. These measures include the promotion of transparency and cultural integrity; empowering small businesses and individuals; and promoting a new form of global integration to avoid exploitation. But trade negotiations can go no further. Not enough has been done to help those who have lost to trade competition. And the reality is that the problems people face today go far beyond the effects of globalization. Manual work is increasingly automated, reducing the demand for labour. Wages are stagnating as health care and higher education costs rise. Inequality is increasing. Organizations that want to succeed must be prepared for the challenges of the “new” globalization ahead – and talented and capable leaders are needed to take responsibility.

The video above provides a good overview of the impact of globalization on businesses – from entering new markets to intensifying competition within markets and industries. However, let`s take a look at a specific example to think about the different impacts of doing business on a global scale. Think McDonald`s, which was founded sixty-eight years ago by two brothers in San Bernardino, California. Due to globalization, nearly 69 million people in 118 different countries eat at McDonald`s every day. The first McDonald`s outside of the U.S. and Canada was founded in Costa Rica in 1970, and since the 1990s, most of the company`s growth has taken place overseas. The process of establishing a global presence, entering new markets and capitalizing on the growing international demand for U.S. fast food has allowed McDonald`s to grow from a single location to a global company with more than 37,000 locations in more than 100 countries.

[1] However, entering new markets, whether at home or abroad, means facing increased competition in those markets, including competition from other globally oriented firms. In 2010, Subway overtook McDonald`s to become the world`s largest single-brand restaurant chain and restaurant operator (although Subways sales have lagged McDonald`s since 2014). [2] With fewer trade restrictions, globalization creates opportunities for expansion. Increased trade promotes international competition. This, in turn, encourages innovation and, in some cases, the exchange of ideas and know-how. In addition, people who come from other countries to do business and work bring their own cultures that influence and mix with other cultures. The OECD defines globalisation as “generally used to describe the internationalisation of markets for goods and services, means of production, financial systems, competition, business, technology and industries. (Source: https: //stats.oecd.org/glossary/detail.asp? ID=1121) If you want to deepen your knowledge of the global business landscape, an easy way to do so is to read international news. Try to incorporate local news from foreign cities into your daily intake to get a glimpse of the state of their economy. Are you interested in exploring the nuances of the international business world? Learn more about our four-week Global Trade online course and other Business in Society courses. Although many people consider globalization to be a twentieth-century phenomenon, the process has been going on for millennia.

Factors such as the increase in international trade, the growing interdependence of enterprises, ease of work and capital movements show the impact of globalization on enterprises. Globalization is different from internationalization. Internationalization refers to how a company grows to influence international markets, while globalization is the whole process by which the local economy connects with that of other countries. Globalization means that businesses around the world buy and sell, often due to the cost or availability of products or cheap labor.