Globalization is a process where countries in the world move closer together. It is by no means, a new concept, as it began with the age of the computer and the internet that had acted as the cornerstone in bringing societies that are even on opposite sides of the world, together. Globalization in the business context is officially defined as;
“The process by which businesses or other organizations develop international influence or start operating on an international scale.”
Globalization has been one of the major influencing factors on a personal day to day life of individuals, business activities and even of countries and respective governments. It has drastically changed the way we have interacted with each other, with massive changes to our identity and culture as a whole.
Globalization is not a direct result of technology, but it is largely influenced by technology. The computer, internet and the dawn of the information age have exponentially increased the rate at which the world connects with each other because of the convenience it affords people who use it. We take for granted today, the ability to talk face to face with a large population of people from different parts of the globe. But this would have been seen as magic, only a few decades back.
This connection has enabled far more than simple communication among people. It has expanded into the business organizations as well, enabling them to utilize the same technology to reach customers outside their traditional geographical boundaries. The globalization of businesses happened when businesses were able to satisfy the needs of customers halfway across the world, in the same way, they would serve customers in their immediate surroundings. This was an important turnaround for the business world.
However, this same ease and convenience have come with their own set of problems and complications that affect individuals, societies and business organizations alike.
From a societal standpoint, globalization enables a higher rate of cultural diffusion (i.e. The amalgamation or the combination of features and characteristics of different cultures). This is not an innately bad thing, but depending on how you look at it, such cultural diffusion case by the globalization process will create a loss in the identities of some cultures when more and more elements from others are integrated to its own. This is a long-standing criticism of globalization from the beginning and an overall unavoidable issue due to human nature generally adapt to changes.
"Globalization has been one of the major influencing factors on a personal day to day life of individuals, business activities and even of countries and respective governments"
Globalization is a driving factor of the open economy. And due to its nature, globalization and the open economic policies pushes increased dependency among countries. Transactions that happened within the country are now happened across international borders. This has drastically changed the economic landscape of countries. For most countries, there are a few international buyers that purchase the majority of the country’s exports. Depending on a single country to purchase the majority of the exports can be disastrous for an economy especially when the importing country can choose to stop importation at any time. During such a situation, there will be massive economic implications on the importer to the extent that it can cause an economic recession. The opposite is true when a country relies on a single exporting country that constitutes the majority of the imports. Or, when a single country provides us with a crucial product, the same amount of over dependency is created. The exporting country has the ability to manipulate the prices and the quantity exported while making demands in return, that has the potential to cripple an economy. An extreme, but not uncommon scenario of this is when there is such a dependence on a single or a few countries, they gain more power over the country that exports to them. This power influence can go as far as to influence the decisions of the government of the country. In such attempts to keep their existing commercial relationships, countries will even have to change its rules, regulations, and policies.
"Globalization is not a direct result of technology, but it is largely influenced by technology"
When it considers the business context, globalization has a big influence as well. Suddenly, businesses are not just reaching out for the customers in their own country, but the entire world. Similarly, they aren’t just facing competition from domestic businesses but are now exposing to a massive number of international competitors who, for most parts, have the resources and the capabilities to operate more effectively and efficiently than them or any local competition they had faced up to that point. This can be especially disadvantageous to smaller local businesses which will be unable to face the competition brought by larger, international organizations which will deliver the same good with higher quality and at lower prices. Without protections, most of these small businesses will perish and the economy will experience an overall negative impact as a result.
Globalization, same as many other things in this world, has both massive benefits as well as disadvantages. But it is a force that is prevalent and necessary in the modern world. With proper knowledge and understanding of what globalization is and what its implications are, their possibilities of the positives outweighing the negatives are undeniable. Globalization opens up a country to new and advanced technologies, markets and urge businesses to be innovative and creative when dealing with foreign forces. Since it is not going anywhere any time soon, it is up to us to make the best out of by focusing and progressing as a nation with the opportunities globalization provides.