Globalization

Derived from the word “globalize” which refers to the emergence of an international network of
economic systems.

Is defined as a process, that based on international strategies, aims to expand business operations on a
worldwide level, and

was precipitated by the facilitation of global communications due to technological advancements, and
socioeconomic,

political and environmental developments. (Pologeorgis, 2017)

It is a process of interaction and integration among the people, companies, and governments of
different nations, a process

driven by international trade and investments and aided by information technology. (Levin Institute,
2016)

Economic

- Economic globalization refers to the increasing interdependence of world economies as a result of the
growing scale of cross-border trade of commodities and services, flow of international capital and

wide and rapid spread of technologies.

Military

- Is the process which embodies the growing extensity and intensity of military relations among the
political units of the world system.

Cultural

- Is the transmission of ideas, meanings, and values around the world in such a way as to extend and
intensify social relations.

Ecological

- The effect of globalization in the ecology are still not completely identified, though some studies
suggest that the process of globalization has many consequences in our ecology.

Politics

- Through globalization, political issues such as the rights of women and children are now currently often

discussed.

Technology

Nowadays, technology really plays a huge part in the life of every individual.

Geographical
Globalization is moving towards the trend of a borderless world.

Market Integration

Markets are said to be integrated if they are connected by a process of arbitrage.

The main types of integration are:

1. Backward vertical integration. This involves

acquiring a business operating earlier in the

supply chain- e.g. a retailer buys a wholesaler, a

brewer buys a hop farm.

2. Conglomerate integration. This involves the

combination of firms that are involved in unrelated

business activities.

3. Forward vertical integration. This involves

acquiring a business further up in the supply

chain. Example: a vehicle manufacturer buys a car

parts distributor.

4. Horizontal Integration. Here, businesses in the same industry and which operate at the same stage of

production processes are combined.

Global Corporations

A global company is generally referred to as a multinational corporation (MNC).

As Gross Domestic

Product (GDP) growth migrates from mature economies to developing economies, it becomes highly
relevant to capture growth in higher growth markets.

 Public Relations. Public image and branding are doing are critical components of all components of
most business.

 Ethics. The most substantial of the challenges faced by MNCs, ethics have historically played a
dramatic role in the success or failure of global players.

 Organizational Structure. Another significant hurdle is the ability to efficiently and effectively
incorporate

new regions, new within the value chain and corporate structure rate structure. International expansion

requires enormous capital investments in many cases.

 Leadership. The final factor worth noting is attaining effective leaders with the appropriate knowledge
base to approach a given geographic market.

Global Interstate System

- It is the whole system of human interactions. The modern world system is structured politically as an

interstate system- a system of competing and allying states.

Divisions of Labor

1.Core- high income nations in the world economy.

2.Semi-periphery- are the middle-income countries, such as India and Brazil.

3. Periphery- called as the low-income countries, whose natural resources or labor support the
wealthier countries, first as colonies and now by working for multinational corporations under
neocolonialism.

Global Interstate System

- Resources are redistributed from the underdeveloped (poor part of the world- the periphery) to
developed countries.

- Global Governance is sometimes referred to as “world governance.”

Effects of Global Governance

- Globalization restrains governments by inducing increased budgetary pressure.

Internationalism vs. Globalization

- Internationalization refers to the increasing importance of international trade, international

relations, treaties, alliances, and many more. International, means between or among nations.

Globalization refers to economic integration of many formerly national economies into one global
economy, mainly by free trade and free capital mobility, but also by easy or uncontrolled migration.

The national community embraced both national labor and national capital, and these classes
cooperated to roduce national goods largely with national natural resources.