Business in Context

Explain briefly the term “Globalisation” and show why some writers believe it is not a new phenomenon. Discuss the major factors which are said to have caused the globalisation of world trade since 1970. Wherever possible use examples of a particular country or particular firms.

Globalisation is very important in the world of business and the processes associated with it are essential for healthy and successful business development. The majority of the economies’ success is due to different countries interlinking and trading amongst others which is what globalisation is all about.  Globalisation is based on the concepts of freedom and openness within the economy and inter-dependence on a global scale. The term has accumulated many meanings and interpretations over the years and no simple explanation can be given that would be able to cover the whole concept. Globalisation generally refers to the process of transforming local phenomena into a world-wide one. Trade and the growth of trade is a key element that lies at the heart of globalisation. Economic globalisation is all about national economies coming together and integrating into the international economy through the use of trade, foreign investment, the ever increasing spread of technology and things alike. It is also about the removal of barriers between national borders in order to enable the flow of capital, labour and goods.

 Globalisation has more than one dimension and is concerned with various issues relating to trade, capital flow, markets and things alike. Globalisation is also a combination of economic, technological, and political factors. Four indicators of globalisation were identified by Griffiths and Wall. The four identified where; New markets, new actors (institutions), new communications, new rules and norms. Many stress the idea that globalisation is not a new thing and so therefore it can be looked upon as a continuous development process in which changes takes place.

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Needle (2009) says “Globalisation is a process in which the world appears to be converging economically, politically and culturally. It is seen by many as a fundamental change where national borders become irrelevant, a process accelerated by developments in information and communications technology”. Putting it into a more simplistic definition he says; “Globalisation is about the increased interlinking of the world’s societies and their economies”. There are many definitions of globalisation, which one to use largely depends on the context in which globalisation is being discussed.

Many writers perceive globalisation as an old phenomenon because they believe it ...

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