Question

What is globalization and why does it matter to companies? Please cite at least one reference to support your findings.

Answer 1

Globalisation refers to the integration of markets in the global economic system. It helps to create increased interconnectivity between various economies.

• It is a process through which various economies become interdependent and integrates with each other.
• It is a dynamic affair than an end state.
• It is not inevitable and hence the same can reverse. For example, in scenarios of the global financial crisis, the growth of globalisation has slowed down.

Here is why it matters to the company:

Business today in the 21st century are interdependent and have a greater influence on the overall business and marketing strategy. Globalisation plays an important role to bring International cooperation and growth.

• It has a huge advantage to customers as due to global competition the customers get the best quality products at the lowest prices. It makes a company product or commodity accessible to many sections of society.
• Globalisation brings an overall transformation in many cultural aspects of a nation. It influences and brings global exposure to areas like good, movies, clothing, culture, art etc. It helps to bring inclusivity and diversity in a company.
• It helps to make the company open to adopting new technologies and methods which are successfully implemented in other parts of the world. This leads to saving in research & development.
• One of the major advantages is that globalisation offers a lot of benefits to the developing and under-developed economies. It helps to bring economic property and leads to the efficient utilisation of resources. Thus bringing growth to a company.
• Globalisation helps to improve the overall standard of living and improves retention & employee health in a company.
• Globalisation also brings various governments, interest group and political parties to synergise and work together towards social growth and stability. It helps to keep various company stakeholders engaged.

Reference: Economics Online - the study of globalisation

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