The globalization and business practice strategies


The term globalization has become a very popular term for analysing the present political condition. The concept of globalization may be in 1990s .Now it has been derived as the transition of human society into the third millennium is the key idea by which we understand it. But it is an say by many researchers and authors accepts that there is no term for globalization which can be accepted universally. Globalisation senses a great variety of sense which serves to illustrate to its definition.

Globalization refers to a world in which, after allowing for exchange rate and default risks, it has single international rate of interest.

Globalisation means the distinctions separating national currency areas and the national systems of financial regulations.

Globalization emergence of world wide financial markets for bonds, money and currencies as well as credit, and it is favoured by

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Communication Technology

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Financial Innovations

Globalization is also referred as the inter connection between boundaries and society as it can be impact to make up a modern world system, as it can be said that the process by which events, decision and activities in one part of the world cam come to make up a significant consequence for individual and communities form other part of the globe.

Thus Globalization refers to a cross border activities of the firms which are involved in the international investments, trade & collaboration for the purpose of product development, production and sourcing as well as marketing. These international activities enable firms to enter new market and will be exploiting their technological as well as organisational advantages, which is induced in the reduction of business cost and risks. By globalization or International expansions of firms which can be developed by it are technological advances, the liberation of market and increased mobility of production factors.

Source: Demystifying Globalization (Edited by Colin Hay and David Marsh) pp 21 to 22

But there are several accepts which describes the effects of globalization which has be impacted in a positive as well negative sides

Globalization, Growth and Development

Globalisation has made up a massive growth which implies in the increasing flows of trade and it is also in the growth of finance factors even the production as international transport, as well as communication and informational linkages develop. Thus globalization deals with the international linkages which do not even develop not just between some specific groups of countries but across a wide global network and this factors of production can move freely which had impact in the growth of globalization. Factors which are influence in the process of Globalization are

Source: The Impact of Globalisation and growth and Inequality in Less Developed Countries (Harvard Business Reviews)

Political Factors : Which is impact on liberalisation of trade and investments?

Technology Factors: This is impact on transportaion, communication and economies of scale.

Social Factors : Implies in the convergence of consumer needs

Competitive Factors: Induce integration and co-ordination

Source: Global Strategic Management ( By Philippe Lasserre) pp13 to 17

Though there is a good result in the growth and development of globalization as it has derived the deregulation has allowed free movement of finance and factors of production across national boundaries, contributing to the globalization process. But there are many impacts and results which derived globalization into positive and negative accepts of globalization. The main advantages of globalization are for business which ha as good aspects in opening up a new market, the suppliers as a wider range around the nations as well the suppliers for goods and services can be done across cross borders, products and manufacture at lower prices, the location for investments would be cheaper, and less costly labour. In some accepts it might be in a disadvantage such as dependence on foreign suppliers and also market leaves business vulnerable to events in foreign economics and market outside their control.

Positive Impacts of Globalization:

The positive impacts of globalization have played a major role in the history as well in the present strategic globalization. The most important on the positive impact of globalisation are

Economic Growth

Financial Growth

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Technical Growth

Market Growth

Legal Growth

But the main benefits of globalization may be discussed by two accepts which can be formed by the views which are at competitive based on the countries who can develop by their competitive advantages and by the large socio-economical point views. Thus the business and the combative benefits can be grouped in four categories they are , Price, training, time, Trade.

Price benefits: The standardisation of economies of scale which reflects in the owing to process of products standardisation, and also increased in the barging powers over suppliers of the resources, elements, machine tools, and services. Even to organise a export and import and sourcing links based on location factors.

Timing Benefits: In this we can understand that if a product is developed or designed in any part of the world as it can be shared around the globe as it will make other to be in time benefit. Ex- Microsoft launched windows 2000 and it was shared by all part of the world. This can be a good benefit in the process of time.

Training Benefits: This makes every part of the world to get into the market and learn new things as people can share their knowledge for new invention. This increases the share of information on sides, best practises and people across the globe. This erases reinvention of process and helps in accumulation of experience and knowledge.

Trade benefits: These advantages can be a direct competitive advantages or indirect cost advantages. These benefits come from the firm managing globally can profit in using ability in one country for the benefit of another country. These come from the advantages that a company managing globally can gain in using resources in one country for the benefit of another secondary country .

Source: Global Strategic Management (Philippe Laaaerre) pp 17 to 18

Source: International Business Environment (Leslie Hamilton & Philip Webster) p 30

Economic Growth: More important, for global market based on the aggressive economic model of "Anglo-Saxon capitalism" ("A system of capitalism characterized by extensive market coordination by economic actors and relatively neutral patterns of governmental market regulation aimed at maintaining property right institutions without privileging particular social actors.").This political development helped to drive the quick expansion of marketing goods and financial flows, as large parts of nations such as developed countries and developing countries adopted exports leads to the developing procedure, and nation absorbed into an increasingly integrated global economy.

Source: GlobalizationHYPERLINK "" and its discontents.Full Text Available By: Green, Duncan; Griffith, Matthew. International Affairs, Jan2002, Vol. 78 Issue 1, p49, 20p;

Negative Impact of Globalisation:

Globalization as in terms of the detettitorialization of financial activities is mainly similarly for business moral philosophy, and this is clear cut in the main areas they are.

Cultural Issues

Legal Issues


Source: Business Ethics ( Andrew Crane . Dirk Matten) p 17

Cultural Issues: It is based on the attitudes to racial and gender diversity as well as local cultures and moral values are inter connected. But may be globalization makes local difference less important since it brings area together and encourages a more uniform "Global Culture" o the other hand, in eroding the divisions of national distances, globalization reveals economics, political, and cultural difference and encounter people with them.

Ex: In some parts of world women can freely sunbathe topless, yet in some parts it is fined and in some parts women must be covered up much more. This is one of the difference of globalization.

Legal Issues: It is the relationship between believes and laws. The more business agreement lose their connection to a certain regional territory, the more they escape the control of respective national governments

Ex: Global financial markets are beyond the control of any national government, and the constant struggle of government against issues such as child pornography on the internet shows the enormous difficulties in enforcing national laws in deterritorialized spaces.

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Accountability Issues: If take a closer look on global activities. One can easily identifies that corporations as the dominant actors on the global stage. In the sense more MNC has the leading role in any nations as that are the firms which pay taxes, salaries to the employees and even supply product around the globe and much of the taxes that keeps government running. By this we can argue that MNC are more powerful than governement. What it means is that the more economic activities get detettitorialized, the less governments can control them, and the less they are open to democratics control of the affected people. Globalization leads to a growing demand for corporate accountability. Indeed, globalization can be seen to affect all stakeholders of the corporation.

Examples of the Impact of globalization on different stake holder groups

Stake holders

Impact of Globalization

Share holders

Lack of regulations of global capital markets, leading to financial risks and instability


Corporations outsourcing production to less developed countries in order to reduce the costs in global market place


Global products face protests about cultural imperialism and westernization.

Suppliers and Competitors

Suppliers in less developed countries face regulation from MNCs through supply chain management. Small scale indigenous competitors exposed to powerful global players.

Civil society

Global active bring the company in direct interaction with local communities with possibility for erosion of traditional community life, globally active pressure groups emerge with aim to police the corporation in countries where governments are weak and tolerant

Government and Regulation

Globalization weakens government and increases the corporate responsibility for jobs, welfare, maintenance of ethical standard etc

Source: Business Ethics ( Andrew Crane . Dirk Matten) p 19 to 20.

Macro-Mesco-Micro Analysis of Globalization

Some other points are also been seen in which it states the negative impact of globalisation. The main negative accept of globalization is the affects of poverty .The impact of globalisation on the poor as producers and the way in which it creates or destroy employments or income opportunities for poor people. One of the of the defining characterizes of globalization in recent years is the integration of large area of economic activity into global value change. Value chain analysis can only present a partial of the impacts of globalization on the poverty in a country. Since globalization leads to change in the structure of production there will inevitable be some sectors where opportunities expand where as in other sectors they will contact and losers from globalization will overweight the winners. This part will be giving the data on the impact of globalization on the poor in their role of producers.

Macro -level Analysis