GLOBALIZATION

Globalization is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. Globalisation has increased the production of goods and services. The biggest companies are no longer national firms but multinational corporations with subsidiaries in many countries.

Globalization has been taking place for hundreds of years, but has speeded up enormously over the last half-century.

   

Advantages of Globalization:

• Resources of different countries are used for producing goods and services they are able to do most efficiently.
• Consumers to get much wider variety of products to choose from.
• Consumers get the product they want at more competitive prices.
• Companies are able to procure input goods and services required at most competitive prices.
• Companies get get access to much wider markets
• It promotes understanding and goodwill among different countries.
• Businesses and investors get much wider opportunities for investment.
• Adverse impact of fluctuations in agricultural productions in one area can be reduced by pooling of production of different areas.

Disadvantages of Globalization:

• Developed countries can stifle development of undeveloped and under-developed countries.
• Economic depression in one country can trigger adverse reaction across the globe.
• It can increase spread of communicable diseases.
• Companies face much greater competition. This can put smaller companies, at a disadvantage as they do not have resources to compete at global scale.