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Importance of Globalization on International Business


International business may refer to all money making deals that occur amid two or more countries and it be private or governmental sectors. This is normally done with the aim of making profit. The government is however not only interested in the profit making, but also on political bases. All the cross border dealings are referred to as the international trade (Gowan 1999, p. 384). It includes the dealings of capital, dealing with skills whereby there is the crossing of people to provide manpower in the other nations for economic gains among others. International business also entails globalization which is discussed in the essay.

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Meaning and Growth Globalization

Globalization is a term that has various definitions depending on the group of the individuals defining the term such as in politics, environmentalists, and economists among others. There is generally no specific definition that has been set aside and agreed upon universally. Economists define it as the worldwide assimilations in products, resources and the manpower markets. Globalization has taken two phases and the fist was in the 19th century to the beginning of the World War 1 while the second one was the aftermath of the Second World War and continues to this day (Moore and David 2009, p. 563). In the two phases, globalization can be said to entail the rapid expansion in trade and also the increase in the output that was accompanied by the main changes in the relative magnitude of the financial systems that are involved.

Globalization has been accompanied by various challenges which have been dealt with and are still being worked upon so as to ensure continues growth. The two phases are characterized by trade growth which is also accompanied by the flow of finances and the flow of manpower. Those entire elements play different roles in globalization. Thus we can say that globalization is as a result of economic factors, the technological developments in the different parts of the world, the socio cultural relationship between the members of the world as whole, the political stability is also a motivator of the globalization and the biological factors which act as the base for any given nation. It also therefore very important to understand globalization also entails the developments in the sharing of ideas world wide.

The second phase of globalization is also referred to as the modern globalization. After the World War 11, there was need for the reconstruction of the destructed areas which required the nations to link up in order to facilitate the developments? Due to the need the politicians had to strategize on how to break the hindering blocks among the countries so as to promote the international interdependence which as a result facilitates trade and which will promote peaceful coexistence which would reduce the chances of eruption of future disagreements that may end up resulting into wars. The agreements were signed up in Breton Woods Conference where a number of leading politicians universally met to discuss on how they would promote the international institutions such as the World Bank and the International Monetary Fund among others that would work to enhance international understanding through the understanding of people’s cultures and the individual differences (Moore and David 2009, p. 379). They also discussed on the various ways that would be used to improve on the international trade so as to promote the international development and especially help raise the developing countries through the international investments.

Several factors have seen and ensured that globalization is effectively taking place such as in the technological advancement whereby costs involved in the trade have greatly been reduced such as in the development in the infrastructure and in the development of communications. This has fastened the process of delivery especially in communications where people don’t have to incur unnecessary time, cost and energy in travelling to resolve issues that can simply be resolved through the improved technologies where urgent issues are discussed through wireless means (Murray 2006, p. 76). The General Agreement on Tariffs and Trade (GATT) has ensured that the unnecessary restrictions on the free trade have been done with. GATT and the World Trade Organization have ensured the facilitation of the free trade, total or partial eliminations of taxes to ensure that the zones promote the trading activities. They are also responsible for the standardization of the costs for the transportation and the containerization. Capital or the financial controls are also put in such a way that the business persons are motivated since most of the restrictions are put in place. Local businesses are also facilitated in that the governments are asked to subsidize for the traders through the formation of the global corporations.

There are ways that have been implemented of determining the dimension of globalization as there several ways of determining it. It is important to understand whether the approach is economical where the individual’s deals with the flow of finances, socially where the person’s deals with the way different individuals interrelate with each other so as to create a harmonious relationship and coexistence and the political dimension that deals with the administrative factors globally. It is the way different political leaders come together to discuss issues that affect people universally and the way they ought to help in the promotion of the peaceful coexistence and the general growth of the other countries especially the developing nations. When looking at the economic dimension the leaders universally come together and discuss issues that may be bringing drawbacks in trade. They also analyze the various methods they should employ so as to uplift international growth through the encouraging of the national leaders to educate and put the favorable conditions that would promote trade. It is also important that records are kept on the level of the economic developments so as to know when the nation to improve on their trade methods and the factors that could be contributing to the problem. It is also important to understand the factors that would be contributing to the increase or expansion of trade in other nations and to research on the methods that they apply so as they may also adopt them to ensure improvement in their member countries.

Effects of Globalization

In the industrialization, there has been increased production world wide which is has also promoted the accessing of products from all over the world. China as an example has significantly risen in the recent time which has been evidenced by the statistics that show that between the year 2000 and the year 2007, trade has increased seven times the way it was in the previous years (Tausch 2008, p. 99). The movement of raw materials as well as the finished products has greatly increased in more than 100 times from the previous years.

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In the economic terms, there is increased interdependency within the countries which in one way or the other has led to the interconnectedness of the international markets which promote the openness of the markets from all over the world. There is however a big problem that can result incase one of the countries involved could have their economics collapsing. This is because it would have an effect to the whole lot of the connected countries. Economically, there has grown a strong interdependency which has not only helped the individual countries but the world as a whole. The strong nations have been in a position to raise the weaker economic countries in that there is always some mutual dependency.

There has been an impact on the health policies whereby health has been taken and treated as a product. There have been international policies that have been put in place which are aimed at improving the Health Service Care especially in the developing countries. In the 1990 years, there were so much interests and concentration was centered in the financial systems neglecting the health services hence living no other option but to privatize the health sectors (Kitching 2001, p. 218). The privatization has led to development in the technology which is as well inventions and the innovations in the already existing trade in the medical department. With the globalization, there has also been the growth of the basic health services for public more than the privatized system for the wealthy.

In politics there has been a harmonized policy in the world that has been used to regulate the coexistence among the nations. There various rights that are formulated as a result of social growth and the financial systems developments in the global borders. The United States have had the privilege of being counted as a superpower among the most powerful nations in the world. This has come along with its ability to have the economic power as it has a very strong and prosperous financial flow (Kitching 2001, p. 219). China has been experiencing tremendous growth in such a degree that statistics show that it might be competing with the United States for the position of a super power given the period of twenty years to come.

There has also been significant growth in the information terms whereby information flow has been facilitated between the geographical borders such that even the very remote areas are accessible. There has been the technological development such as in the development of the fiber optic , the development of the satellites, the improvement of the telephone communications from the wires to the wireless mobile cell phones has also improved the communication system and the internet use has been of greatly improved and popularized such that people can access the internets through computers which are widely used in the current world and the mobile phones thus enabling people to attend to urgent issues from whatever they are which in great extents have helped in the development of the economy or the globalization.

Language has been popularized to enhance communication among the international members whereby by there has been the development of the official languages world wide. There must be the understanding that having originated from the different nationalities, there are also the individual differences as well as the different languages. Due to the fact that all the existing languages in the world cannot be made the official language a few of them are selected and made the official languages where members o f the universe are expected to at least understand a number of them to facilitate the communication and understanding among the members. Some of the languages that has been adopted are the Mandarin where over 845 million people are well acquainted with the language, Spanish is the second widely spoken language where over 329 million people speak it, English follows in the third with 328 people speaking it and some few others follows in the list. This has greatly influenced the growth of the global communications.

Globalization has also resulted to the completion on the available resources. Globalization has called for the fight to remain at the competitive edge. This as a result has led to improved productivity and much more to the increase in the competition universally. There have been a lot of innovations and inventions in the current world to ensure that the products produced qualify to remain in the competitive edge in the competitive world we are in (Stiglitz 2006, p. 196). This has however developed other negative repercussions in the process of trying to outdo each other such as unhealthy competitions that contribute to the conflicts instead of the initial purpose of the cooperation of the members involved. It may also lead to disagreements for example the frequent fights experienced in the Gulf States over the fight of the possession of the oil fields.

In the ecological terms, globalization has had a great impact on the on the environment. There a lot of challenges that needs to be addressed so as to prevent further damage to the environment and this can only be achieved through the global cooperation among the member groups. This will help in the protection of the natural resources, improving the already affected climate through the climate change projects, pollution of water and air measures and many more. Globalization has resulted in the industrialization and the coming up with industries that are not following the environment regulations thus the increasing tendency of the environmental hazards. As the environmentalists try to raise the regulations standard, they should also consider the living standard of the people.

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Globalization has promoted the cultural diffusion where members no longer live as individual identities but as members of a common group. People have learnt to understand the individual differences, and the oneness of the human beings irrespective of where they come from. The desire to share what is produced by other people from different pts of the world so as to promote the living style has also led to the adoption of the world culture (Steger 2003, p. 247). Culture diversity has resulted as a result of the need to travel to different parts of the world in search of materials and the required resources for individual developments. This has enhanced the growth of peace and promoted understanding between the state members. Cultural diversity has also led to tourism and some of the existing travel agencies in the world today. It has also led in the development of the hotel industry today due to the rising need to accommodate the visitors who are travelling each day in the different parts of the world. There have also been developments in the social sectors of the world such as in the humanitarian sectors where different organizations are formed to improve on the ling conditions of people.

Legally, there was need to develop the legal systems to ensure that all people are protected no matter where they are at any given time. International Courts and legal movements were started and operate to this day. There are also laws that are formed globally so as to deal with the criminals of any nationality when found on different parts of the world. They are also the laws that permit crime importation through the deportation of criminals and the educating of the people on the various ways in which they should ensure that there is cooperation in the whole universe.

It has also ensured that people are able to understand the religious differences that exists among people and also learnt to respect and accept the differences. This promotes the regional understanding hence reduction in the conflicts between people of various groups. There has also been the spread of religions in various parts of the world such as Christianity in India which is as a result of the trade interest of the British people to the Indian people among other examples. Through the movement of people from one place t the other they are able to adapt to the different Religions and practices.

Negative Effects of Globalization

Globalization has led to spread of very many diseases especially the communicable diseases and some of which are known to be deadliest. This is as a result of the movement of people and products as well as the communication from one geographical location to the other. Through the coming up of the faster means of transport, it consequently follows that an infectious disease may be moved from one location to very many other locations within a very short time. There is also evidence that the HIV/AIDS is still the most killer of the Black Americans who are usually treated badly and some times used sexual slaves hence the spread of disease.

There is the issue of the brain damage which results when people believe that there better places than their home countries hence migrating with their talents where they live hence depriving the nation of their the talented people making them even more poorer (Glyn 2006, p. 117). A good example is the in the African nations where an estimation of 4. 1 billion person are said to migrate annually for search of better paying jobs or for employment search. Other countries such as India count over ten billion dollars annually are spent on their people going to further studies abroad instead of using the money on other more viable enterprises.

The interconnectedness has contributed in issues related to economic of the whole globe as a result of one being affected such as in the current case of the United States suffering economical has resulted to the global economic crisis (Osterhammel and Niels 2005, p. 178). The influx in the Chinese products such as textiles is also a good example of how the interconnectedness can affect globally since there has been a very big number of people that have lost their jobs as a result, other factories in the United State have also been closed down living over 3.2 million people with no jobs.

There has also been a lot of imbalance in the distribution of wealth in that people concentrate on the nations that are economically well endowed and stable hence living the poor nations to be even poorer. A good example is in the Sub Saharan Africa where we have over 46 percent of the people were said to be living in the real poverty where most of the children were found to be undernourished due to lack of foods and finances. The resources are also distributed in some areas whereas the others are left in the mercy of other nations who oppress them for their own gains.

The other negative effect is the environmental degradation which is as a result of overuse of the natural resources in the process of the globalization. Nations such as in China and also in India are thought to be influencing the biosphere. China is for example said to be the greatest producer of the Carbon Dioxide globally. We also have most of the rain forests at a threat of being logged off thus affecting the climate globally. The consumption of the oils is also exhausting the fossils in that are responsible for the formation of the oils. Severe pollution is also evidenced by the fact that many industries have come up some of which produce very dangerous gases. The developed car culture has also ensured that there is a lot of production of gases that have negative effects to the people as well as to the crops. There is therefore need to ensure that there are strategies being formulated that would help in the minimizing of pollution to the environment as well as to come up with alternative ways of getting energy and the other natural resources.

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Globalization has also resulted in the most people adapting to new diet and also the rise in the food prices globally. The world population is also rapidly growing hence occupying the land that would otherwise be used for the cultivation of crops (Friedman 2005, p. 124). This is certainly becoming a threat as the large population is at a risk of suffering hunger since the productive land has been occupied. Other actors that facilitate the production of foods are also at a risk hence it is said that by the year 2030 there might be difficulties in the provision of foods universally.

There is also increased drug trafficking since drugs fetch a lot capital. Statistics show that drugs generate over 320 billion in every year worldwide. Some of the dangerous drugs and the illicit fire arms offer a very attractive pay especially for the unemployed forcing them to specialize in the trade of the illegal products. There is also another group that has specialized in the poaching since the animal products such as the ivory and skins of some snakes and other animals are very expensive. This is having a negative impact on the natural resources.

The other negative impact is the sweatshops whereby the rich countries invest their machinery to work on the poorer countries resources as they are not able to do it on their own. Some countries have minerals but do not have the capability to extract it hence they allow them to work on it while they get a very small percentage of the profit and a t the same time their people work on the risky ground such as in the mining of the gold. The workers are also given paid poor wages thus in the long run the country is taken advantage of. There have been some ant sweatshop movements that have been put in place to campaign against the culture. They fight for people being offered good working conditions and the respect of the human beings by treating them equally and giving them all the allowances that they are required to get.

There has been many who are against the globalization and criticize all the efforts of globalization basing their arguments on various arguments which include; the poor countries are used by the wealth countries to their own advantage (Murray 2006, p. 98). The workers are not paid equivalent to the work done, the existing labor unions are not strong enough to fight for the needs of the people and that there has been continuous use of child labor as they cannot demand for many privileges as adults would. All those critiques have been identified on several occasions but it does not mean that globalization should entirely be done with.


Looking at the current trend in the economic dimension, it is true that we are in the era of globalization which is evidenced by the effects of globalization that has already been identified clearly. Globalization is very important in that it promotes worldwide growth as well as promoting peaceful coexistence globally through the understanding and accepting the cultural diversity and in that it prevents future issues and conflicts since people already lives as friends. Globalization however has the negative effects that need to be looked at so as to prevent further degradations on the environments and the constituents of the environment and on the economy.

Reference List

  1. Friedman, T. L. (2005) The World Is Flat. New York, NY: Farrar Straus and Giroux Press.
  2. Glyn, A. (2006) Capitalism Unleashed: Finance, Globalization, and Welfare. Oxford: Oxford University Press.
  3. Gowan, P. (1999) The Global Gamble: Washington’s Faustian Bid for World Dominance, London: Verso.
  4. Kitching, G. (2001) Seeking Social Justice through Globalization: Escaping a Nationalist Perspective. Pennsylvania: Penn State Press.
  5. Moore, K. and & David, L. (2009) Origins of Globalization. New York, NY: Routledge.
  6. Murray, W. E. (2006) Geographies of Globalization. New York, NY: Routledge.
  7. Osterhammel, J. and Niels, P. (2005) Globalization: A Short History. New Jersey: Princeton University Press.
  8. Steger, M. (2003) Globalization: A Very Short Introduction. Oxford: Oxford University Press.
  9. Stiglitz, J. E. (2006). Making Globalization Work. New York, NY: W. W. Norton.
  10. Tausch, A. (2008) Multicultural Europe, Effects of the Global Lisbon Process. New York, NY: Nova Science Publishers.

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