You must take into consideration the following characteristics of globalisation:
1. Over the past two decades, there is a quick globalisation of markets and production.
2. The globalisation of markets infers that national markets are combining into one huge marketplace.
3. Erosion of national sovereignty and national borders via international agreements resulting in organisations such as the World Trade Organisation (WTO) and European Union (EU).
4. Development of Global Financial System.
5. Decreased transportation costs, particularly from development of containerisation for ocean shipping.
6. The globalisation of production implies that firms are resorting to focused world locations for specific activities than including their own resources. As a result, it looks progressively irrelevant to talk about American products, Japanese products, or German products, as these are being replaced by “global” products.
7. Two factors appear to underlie the trend toward globalisation: decreasing trade barriers and changes in communication, information, as well as transportation technologies.
8. Since the end of World War II, there has been an important lowering of barriers to the free flow of goods, services, and capital.
9. Rise in international flow of capital.
10. Rise in the share of the world economy regulated by multinational corporations.
11. Enhanced role of international organisations like WTO, WIPO and IMF that deal with international transactions.
12. Rise of economic practices such as outsourcing by multinational corporations.
13. Intellectual Property Restrictions.
14. Harmonisation of intellectual property laws across nations (usually speaking, with more restrictions).
15. Supranational recognition of intellectual property restrictions (for example, patents granted by China would be identified in the US).
16. Pursuing globalisation of production and markets, world trade has grown quicker than world output in the past decade. Foreign direct investment has swelled, imports have penetrated more intensely into the world’s industrial nations, and competitive pressures have enhanced.
17. The development of the microprocessor and associated developments in communication and information processing technology have assisted firms to link their global operations into sophisticated information networks.
18. Development of a global telecommunications infrastructure and higher trans-border data flow utilising technologies like Internet communication satellites and telephones.
19. Increases in the number of standards applied worldwide, for example, copyright laws and patents.
20. The most theatrical environmental trend has been the downfall of communist power in Eastern Europe, which has developed enormous long-run opportunities for international businesses.
21. Additionally, the move towards free market economies in China, Latin America and India is developing opportunities (and threats) for Western international businesses.
22. The advantages and costs of the evolving global economy are being hotly debated among business people, economists, and politicians. The debate emphasises on the impact of globalisation on jobs, working conditions, wages, the environment, and national sovereignty.
23. Few argue that even terrorism has accepted globalisation with attacks in foreign countries that have no direct association with another.
24. Culturally
(a) Higher international cultural exchange.
(b) Expanding of multiculturalism and better individual access to cultural diversity.
(c) The imported culture can simply supplant the local culture, leading to reduction in diversity via hybridisation or even assimilation.
(d) The most noticeable form of this is Westernisation.
(e) Higher international travel and tourism.
(f) Higher immigration involving illegal immigration.
25. Managing an international business is separate from managing a domestic business for minimum four reasons:
(a) Countries are diverse.
(b) The range of problems faced by a manager in an international business is broader and the issues themselves more complicated than those confronted by a manager in a domestic business.
(c) Managers in an international business must discover ways to work within the limits levied by governments’ intervention in the international trade as well as investment system.
(d) International transactions include transforming money into different currencies.
Notes: According to a survey, the proportion of people depending in India on agriculture is about 60 % whereas the same for the UK is 2 %, USA 2 % and Japan 3 % (2005 data). The developed countries, having a low proportion of population in agriculture, have readily adopted globalisation which favours more the growth of the manufacturing and service sectors.
In a nutshell, Globalisation can be featured by four key factors:
1. Evolution of international organisations, particularly the WTO,
2. Emergence of Regional Trade Agreements/FTA as ASEAN, NAFTA,
3. Rising role of Multinational Corporations, and
4. End of the Cold War/Paradigm shift in former socialist economies.
