Globalization

The Interdependent Global Economic System



The Interdependent Global Economic System

Introduction

As stated by Shales (2009) that “Market-driven globalization does not want diversity; quite the opposite." Its enemies are national habits, local brands, and distinctive regional tastes.” Naomi Klein's article on anti-globalization is one of the most read articles which are very influential in nature. The articles have many publications with Newsweek International, Nation, New York Times, and Village Voice. She is in Canada since 1970 and after years of research concluded, in which she condemns the operations on multinational companies and policies of international associations like World Trade Organization, United Nations Organization, and NAFTA. This book and the article are about the situation prevailing all around the world and how people feel about globalization - anti-globalization (Akande, Wole 2003).

The term globalization is widely used in the international business which refers to variety of phenomenon, such as technology, politics, hotel industry, consumer behavior, firm strategy, and trade and capital flow. The phenomenon of globalization has pros and cons on international business special in hotel industry (Barlow, Grimalda, & Meschi, 2009). Globalization is a process which allows companies to expand outside their home country. It is also defined as the internationalization of a business at the highest level. Two factors that play a vital role in the expansion of the business are international trade and the media communication. The media communication is the information which enables the industry to be a trade good. Multinationals, mega corporations, and consumers are the most exposed means of globalization (Brown, & Lundblad, 2009).

The economic sense defines globalization means the growing interdependence of production and markets in more than one country through business in goods and services, international strategic alliances, cross-border flows of capital, mergers, cooperation, and exchanges of technology. Globalization is also termed as a labor increase in the international division, accomplished with the help of international fragmentation of production along with the political inclination showing more broadminded economic order (De Wit and Meyer, 2004, pp. 135-142).

Discussion

Globalization is an ongoing process which has enabled different societies, cultures and many regional economies to develop integration between them through developing a span of network and communication so that all the information and activities are equally distributed in different parts of the world. On the other hand multinational organizations are companies that are located in one country but have their operations in more than one part of the world. Organizations that only have sales offices in other parts of the world are not considered as multinationals (Euromonitor, 2010). Apart from the effect of global events, there are also financial implications of globalization such as the recession of 2008 onwards it has also affected the business industry and its key players. Business strategies had to rely on the cost involved in the transactions and the overhead costs which tend to rise especially after the recessionary situation in major developed economies of the world. The increase in the transaction cost with the buyers increased due to the overhead ...