Globalization

Inthepastmanyyears,“globalizationhasbecomeaparticularlyfashionablewaytoanalysechangesintheinternationaleconomyandinworldpolitics.Advancesintechnologyandmoderncommunications,wearetold,haveunleashednewcontactsandintercourseamongpeoples,socialmovements,transnationalcorporationsandgovernments.Themarket-centredapproachpredictsagradualerosionoftherelevanceandimportanceofthestateandgovernmentpolicies,amorestate-centredviewproposesthatsomeelementsofglobalizationreinforcetheroleofgovernment(Hirst&Thompson,1996).Onanotherhand,Woods(1998)arguedthatthe“result”ofglobalisationisasetofprocesseswhichhaveaffectedworldpoliticsandeconomiesinanewandextraordinaryway.Yettheargumentitselfisnotanewone--noristhephenomenon.Globalizationiscreatedbythecomingtogetherofpolitical,social,culturalandeconomicfactors.Ithasbeendrivenforwardaboveallbythedevelopmentofinformationandcommunicationtechnologiesthathaveintensifiedthespeedandscopeofinteractionbetweenpeopleallovertheworld.Baylis,etal.,(2011)alsostatesthatOverthelastthreedecadesthesheerscaleandscopeofglobalinterconnectednesshasbecomeincreasinglyevidentineveryspherefromtheeconomictothecultural.Scepticsdonotregardthisasevidenceofglobalizationifthattermmeanssomethingmorethansimplyinternationalindependence,i.e.linkagesbetweencountries.Thekeyissuebecomeswhatweunderstandbytheterm'globalization'.Therearealotofbooksthatexploredglobalisationinvariousperspectiveswhichincluding(Baylis,etal.,2011),(Jones,2010)and(Huntington,2011)andsoon.ThefirstpartofthisessayisgoingtoAnalyseandevaluatetheimpactthatglobalisationishavingupontheworldofbusiness.Jones(2010)informthatgloblisationisbcomingsopervasivaly“know”thatitisbecomingtakenforgranted,andfewpeoplequestionwhatitreallymeansorwhygloblisationissoimportant.However,globalizationisferquantlyusedratherlooselyinpoliticsandthepopularpresstodescribeallsortsofevents,especiallywhenIlookedtoacademicbooksforsourcesformypoints.Ifoundthatnearlyeveryfieldofeconomicswillbeactedinsomewayby,toborrowaphrasefromThomasFriedman,theflatteningoftheworld.So,thefirstpartofThisessaywillexplaintheimpactthatglobalisationishavingupontheworldofbusinessfromthreepersperctives.inotherwords,So,thefirstpartofThisessaywillevaluatehowglobalisationmakingtheflatteningoftheworldThefirstoftheseisincreasedtradeintegration.ItwaswhenIwasresearchingforanassignmentthatIcameacrossabookby(Baylis,etal.,2011),theystatesthatSincetheendofWorldWarII,theGeneralAgreementonTariffsandTradeanditssuccessor,theWTO,havereducedtariffsandvariousnon-tariffbarrierstotrade,enablingmorecountriestoexploittheircomparativeadvantage.Aftercoldwar,thenumberandsizeoftradingblocshaveincreaseddramatically.Beaverstock(2012)suggeststhattheongoingglobalizationincreasestheoverallneedforknowledgeofculturaldifferencesbetweennotonlycountriesbutalsocorporatecultures.Moreandmoreemployersstarttransferringtheirexpertsfromcountrytocountrytohelpbuildnewsubsidiariesortosupportexistingonesincertainprojects.Homayounnejad(2006)alsostatesthatTradingblocspromoteglobalinterdependencethroughtradecreation.Namely,wherethedismantlingofinternaltradebarrierscausesacountrytoswitchfrompurchasinggoodsfromahigh-costproducer(ofteninthedomesticmarket)toalow-costproducerelsewhereinthetradingbloc.Thisoccursthroughfallingtariffandnon-tariffbarrierstointernationaltrade,aswellasadvancesincommunicationstechnologythatallowtradeincertainservicesthatwereoncenon-tradeable.Thesecondisincreasedfinancialmarketintegration.Thishappensthroughfallinglegalandnon-legalbarrierstocapitalflows.Inthepastfewdecadesmanycountrieshaverelaxedordoneawaywithrestrictionsoncross-bordercapitalflows,andadvancesincommunicationstechnologyarehelpingtoovercometheinformationalasymmetriesthatcanhinderinternationalcapitalflows.Smith(1991)informsthatMarketintegrationhasbeenacceleratedbyseveralfactorsthathaveoccurredduringthepasttwentyyears.Theendoftheneedforforeignexchangecontrolshasresultedafreeflowofcapitalbetweenmarketsofindustriallydevelopedcountries.Deregulationhasremovedbarriersthatimpededaccesstomarketsindifferentpartsoftheworld,bybothissuersandbyfinancialserviceproviders.Massiveimprovementsintelecommunicationscapabilityhasmadeitpossibleforinformationavailableinonepartoftheworldtobesimultaneouslyavailableinmanyotherplaces.Andadvancesinfinancialtechnology1suchasswapsandotherderivativeshavemadeitpossibletotakeadvantageofmanynewfinancingopportunities.Thethirdprinciplecomponentofglobalizationupontheworldofbusinessthatisincreasedlabormigration.overthepasttwodecades,labormarketsaroundtheworldhavebecomeincreasinglyintegrated.PoliticalchangesandeconomicreformshavetransformedChina,India,andtheformerEasternbloccountries,effectivelyinvolvingtheirlargelaborforcesinopenmarketeconomies.Forexample,Davis(2008)arguedthatlabormigrationisspurredonby,amongotherthings,thecommonmarketpolicyintheEuropeanUnionthatremovesanylegalbarrierstointernationalmigrationwithintheEU.IMF(2007)alsomentionedthatLaborglobalizationcontributedtothedeclineinlaborsharesinmostcountries,withbroadlysimilareffectsinbothAnglo-Saxoncountriesan