Globalisation

The definition of globalisation is the worldwide movement toward economic, financial, trade, and communications integration. Globalization implies the opening of local and nationalistic perspectives to a broader outlook of an interconnected and interdependent world with free transfer of capital, goods, and services across national frontiers. However, it does not include unhindered movement of labor and, as suggested by some economists, may hurt smaller or fragile economies if applied indiscriminately. Globalisation concerns are trade in goods and services, investment, labour force movement, products, production, technology, research and development, exchange of ideas and knowledge and intellectual property.

There are lots of advantages of globalization. It can lead to improvements in efficiency and gains in economic welfare. Trade enhances the division of labour as countries specialize in areas of comparative advantage. Deeper relationships between markets across borders enable and encourage producers and consumers to reap the benefits of economies of scale. Moreover, it gains in efficiency should bring about an improvement in economic.

The main disadvantage of globalization is losing culture. It is because the majority cultures of the other countries would replace the local cultures. For example, the culture of US is the most popular culture in the world. The other con is a major long-term threat to globalization is the impact that rapid growth and development is having on the environment. Threats of irreversible damage to ecosystems, land degradation, deforestation, loss of bio-diversity and the fears of a permanent shortage of water are afflicting millions of the most vulnerable people are vital issues. Unemployment is also a very bad disadvantage. Investment and jobs in advanced economies will move to developing countries. This can lead to higher levels of structural unemployment and put huge pressure on government budgets.

Then, if companies want to go global, there are lots of methods. Exporting which is selling good to customers in another country. No need to establish operations overseas. Direct investment which is establishing operations in another country, ie, establishing a distribution network, production facility. This is a very expensive method.