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Q.1 What is globalization? What are its benefits? How does globalization help in internationalbusiness? Give some instances?

Globalization

describes the process by which regional economies, societies, and cultures have become integratedthrough a global network of political ideas through communication, transportation, and trade. The term is mostclosely associated with the termeconomic globalization: the integration of national economies into the internationaleconomy throughtrade,foreign direct investment,capital flows,migration,the spread of technology,andmilitary presence.However, globalization is usually recognized as being driven by a combination of economic, technological,sociocultural, political, and biological factors.The term can also refer to the transnational circulation of ideas,languages, or popular culturethroughacculturation.An aspect of the world which has gone through the process can be said to be

globalized

.Against this view, an alternative approach stresses how globalization has actually decreased inter-cultural contactswhile increasing the possibility of international and intra-national conflict.Globalization has various aspects which affect the world in several different ways

Industrial - emergence of worldwide production markets and broader access to a range of foreign productsfor consumers and companies. Particularly movement of material and goods between and within national boundaries.International tradein manufactured goods increased more than 100 times (from $95 billion to$12 trillion) in the 50 years since 1955.China's trade with Africa rose sevenfold during 2000-07 alone.

Financial - emergence of worldwide financial markets and better access to external financing for borrowers.By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily tosupport the expanded levels of trade and investment

Economic - realization of a global common market, based on the freedom of exchange of goods and capital

Job Market- competition in a global job market. In the past, the economic fate of workers was tied to thefate of national economies. With the advent of the information age and improvements in communication,this is no longer the case. Because workers compete in a global market, wages are less dependent on thesuccess or failure of individual economies. This has had a major effect on wages and income distribution

Political - some use "globalization" to mean the creation of a world government which regulates therelationships among governments and guarantees the rights arising from social and economic globalization.Politically, the United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. With the influence of globalization and with the help of the United States’own economy, the People's Republic of China has experienced some tremendous growth within the pastdecade. If China continues to grow at the rate projected by the trends, then it is very likely that in the nexttwenty years, there will be a major reallocation of power among the world leaders. China will have enoughwealth, industry, and technology to rival the United States for the position of leading world power.Most of us assume that international and global business are the same and that any company that deals withanother country for its business is an international or global company. In fact, there is a considerabledifference between the two terms.

International companies

– Companies that deal with foreign companies for their business are considered asinternational companies. They can be exporters or importers who may not have any investments in any other country, apart from their home country.

Global companies

– Companies, which invest in other countries for business and also operate from other countries,are considered as global companies. They have multiple manufacturing plants across the globe, catering to multiplemarkets.The transformation of a company from domestic to international is by entering just one market or a few selectedforeign markets as an exporter or importer. Competing on a truly global scale comes later, after the company hasestablished operations in several countries across continents and is racing against rivals for global market leadership.

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