Globalisation And Its Effects Commerce Essay

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The world is becoming smaller and smaller. This is because people are changing and their concepts has changed and will change. They want to live as one and this is done through process called globalisation. Behind globalisation, internet plays vital role in doing so. Internet has made globalisation more reliable, fast and time consuming.

It is the communication among the developed and developing countries in the world in order to develop the global economy. It involves technological, political, economic, infrastructure and exchange of culture. World's resources will be used more if trade is done more. Country that does more trading is better at producing goods. Small companies can benefit through the expansion of market into world. Relatively, domestic markets are limited in size and they can grow in near future becoming more efficient through exporting.

Effects of globalisation

Globalisation can be beneficial in several different ways depending on country. Mainly it affects industrial, financial, economic, health policy, political and informational sector.

Improvement of international trade

As we know that day by day international trade is increasing dramatically. Every day billions of transactions are made through exports and imports of products.

For example, in UK there are lots of retail shops. They get their products from different parts of world. It's very cheap to produce products in different country because of cheap labour. They sell same product here at higher price making lots of profit.

Technological progress

The world is becoming smaller and smaller day by day because of technology. Developing countries have invented new technology that can make work easier, fast and reliable. People can share social networking sites like Facebook and YouTube where they can upload music, videos, and pictures to be seen by millions of user every day. Hotmail and yahoo replaced postal services. They can send and receive messages, pictures within second. Whether big or small companies they use internet when they have to send memos.

Multinational companies

Most of companies have got subsidiaries in various countries which is called multinational. They don't have to pay tax more because each company will be taxed differently.

For example TOYOTA's head office is based in Japan but this company has got many branches throughout the world. Head office control's the production for subsidiaries. They are meant to increase the production and profits. Once they are able to penetrate markets, they can make profits easily.

Power of WTO, IMF

Globalisation can be strengthening through the world Trade Organisation and International Monetary Fund.

Real example: on October 24, 2008. IMF gave Iceland about US$ 2.1 billion to rescue form debts.

Human Resources across countries

It helps to create greater mobility of human resource across countries. On the other hand countries can source manpower at cheap labour cost.

For instance, the manpower shortages in UK provides opportunities for labour exporting countries like Nepal to bring their human resources to those countries for employment. Global companies in US and Europe are taking lots of advantages in terms of labour and highly-skilled workers.

Impact of globalisation on developing countries - China [2] 

Everyday trading takes place and most share holder of the trade are developed countries. Beside developed countries Brazil, Russia, India and China are emerging slowly. They are call as BRIC country. In the future they will be having most share of world trade because of globalisation and fast growing production and technology and natural resources.

China, according to OECD report, it has got annual growth rate of 9% for past 25 years. None of the country has reached at this level before. Economist say by the end of 2010 it will be world's largest exporter if it continues at same rate. Regarding economy level, it may be second largest country in terms of economy. Because it has got fastest economy growth rate in the world, poverty has fallen from 63% to 16.6% in 2001 having population of 400 million.

Negative effects of globalisation [3] 

However globalisation has negative effects in many aspects. Developed countries hire lots of employees from developing countries for manufacturing products leaving fewer jobs for their people. Most common example is CHINA. In China labour, materials are very cheap.

It has led to exploitation of labour. In many developing countries child and prisoners are made to work very hard ignoring safety standards.

Terrorists are using internet for communicating among themselves. By help of GOOGLE Earth they can view world and plan their target.

Multinational companies are increasing pollution in developing and poor countries. This is because they setup their manufacturing place in these countries because of cheap labour and low living standards.

When it comes to food, McDonalds and KFC are among the fast food companies in the world where they have got very high reputation. This has led to consuming more junk foods every day.

Internet world [4] 

Internet at this century is seen as basic need for human to survive. New technologies are valuable only if many people use them. Every day internet is used by billions of people so to do their day to day life basic things. From home to business, school to universities internet is very important.

Internet became the core information technology, attracting not only users but also business, administration, courts etc.

The more people who use software, network, standard, game, book or any other content, the more valuable it becomes and more new users will be attracted increasing both its utility and the speed to its adaptation by still more users.

Rise of E-commerce [5] 

Internet has changed business into E-COMMERCE. Electronic commerce means any type of business transactions that involves the internet transfer. When it comes to internet transfer, it involves retail sites for consumer, through auction or music sites, to business exchanges trading goods and services between companies. It has expanded rapidly over past 6 years and is expected to continue at same rate.

B-2-B or Business to Business deals with hundreds or even thousands of other business. They can carry out transactions electronically much faster, cheaper and reliable way providing competitive advantages over traditional methods. With the help of B2B, manufacturer can directly contact wholesaler and vice-versa. They don't have to wait for long time to get invoices and dispatch products.

B2c or Business to Consumer deals with selling products to consumer with products that company has manufactured. They can pay easily with cash or debit/ credit cards.

Online shopping has become most popular making consumer life easier. They can buy whatever they want sitting at home and products will be received within days. This saves time and for business they save money. Online recruitment is growing fast. Whether they are small business or large companies, they have made online recruitment. This will allow companies to choose employee more easily by matching given questionnaires.

Common examples are western Union money transfer where one can send money anywhere in the world within matter of seconds.

C2c or Consumer to consumer is growing rapidly at the moment. This is operated by third party and charges a flat fee or commission for using websites. Common example is e-bay and amazon. Here, consumers can sale items to other consumer by bidding process. One can get everything that is needed for day to day life. We can search products according to categories, price and model. However, third party doesn't check quality of products being offered.

Most of items are either second hand or brand new. This is becoming very popular because once it's been used and if one doesn't like than they can sell it to others.

Popular examples of consumer to consumer are E-bay, Amazon, and Gum tree.

Internet has made easy life

With the rise of internet we have seen an emergence of new ways to communicate and marketing. It really has made easy life for people. Internet is regarded as one of basic needs because without it we are like fish without water. From business to home, school everywhere it is essential.

Social networking

The popularity of social networking websites like Facebook, twitter and social media like blogs and YouTube has made it just as easy for everyone to communicate in real time with thousands of people. A social networking website allows internet users the ability to add user-generated content such as: comments, feedback, rating, or their own dedicated pages. Even Universities, has been added to social networking to promote quality of education.

Online banking [6] 

In the future electronic banking will replace most of high street banks. Few banks will be on the street for older people and certain business purposes that cannot be done through electronic. There won't be any queue to get money in and out of bank. With the help of technology, banks are able to produce different products that will make easier for customer. They have changed distribution channels and organisational structure.

Standard transactions

Most of the banks don't send customer banks statement unless they ask. This is because they want to save paper, ink and save time in sending statements

Decentralization of bank-office support

Call centre has replaced customer services in most of banks. Just giving call will help us with our problems.

Customer value

When applying loan or mortgage, they check online just to confirm whether they meet given criteria.

Pay online

We don't have to queue for hours to pay our bills. By sitting at home, all the bills can be paid electronically. Transfer money to another people or buy.

Farmers: modern business

The impact of the internet on globalization Businesses whether they are small or big they need a way to advertise, sell, purchase and enhance their product worldwide. The internet provides a cheaper, faster and easier method of communication.

Common example is "farming". Before internet had become popular, farming was considering just a small business for family to keep alive. But at moment, they are keeping world alive. With the help of internet they can do research regarding plants, crops and soil. After doing this they can easily crop best they like and how often to rotate their crops in same filed. Before people used to buy books at counter and read what to do next about field. In this 21st century people can sit at home and read hundreds of books about field. Farmers can listen to audio and video regarding how they can increase crop yield. Farmers can easily send and receive message and information regarding crops.

People think only big businesses and companies are competitive but they too have same problems because there are thousands of farmers who sell same food. To make profit from farming, you have to have all the knowledge about market and people. With the help of internet they can compare things on online and able to connect directly with other in the world.

Like other companies and retail, they have right to advertise and sell them at higher profits. More they sell; more they produce better and large quantity.


Finally what we can say is that future of world is electronic world where people will communicate through electronically and doing business. Most of big companies will have internet as main source.

Overall the implications of the globalisation programmes have been typically positive and negative, in terms of reduced real income and standard of living for most of the women, along with a great burden of unpaid work. The reduction of government subsidies to energy sources to basic amenities such as sanitation, water supply, public health and educational services has not only reduced wage earners household incomes, but has increased consumers choice.