Globalisation And Business Management


“GLOBALISATION is a process of deeper economic integration between countries and regions of the world”.  It focuses on the operations of various firms not only on the domestic but also on the international front . Today we will discuss about Globalisation And Business Management

Globalisation And Business Management



It is concerned with various managerial issues related to the flow of money, thoughts, goods and manpower with an aim to manage different situations across the national boundaries.Globalization itself comprises of three related factors which include: Location , Attitude , Proximity.

  • LOCATION : Globalization involves the integration of the organizational operations across the national boundaries.
  • ATTITUDE : Globalization encourages a new , open-minded attitude about practising the management skills internationally.
  • PROXIMITY : In international management, Proximity means “Shrinking World.”The increasing technological and managerial capabilities of the skilled work force around the globe is a key determinant towards the proximity , which has resulted in a new breed of global managers.

    Elements of Globalization :

  1. Globalisation is the process of integration of the world into a huge single market.
  2. Globalisation is shaped mainly by money flows rather than by trade in goods and services.
  3. The main goal of globalization is not profit maximization , but it aims at market maximization.The objective of globalization is the integration of economies across the world and create one huge world economy which offers a bigger market to companies and lot of variety to buyers.
  4. Globalization depicts a transnational economy and hence is Broader in scope than the international economy or internationalization.
  5. Globalization has laid down the platform for companies across the globe which are interested in investing in the global company.
  6. The process of globalization has resulted into existence of new concepts such as :
  • Global consumers
  • Global markets
  • Short life cycles for new technologies and products
  • Homogenization of Markets
  • Decreasing Trade Barriers
  • Increasing openness of economies
  • Decreasing costs of transportation and communications.

Importance Of Globalization :

The lists of advantages of International Business includes :-

  1. International business helps to cater to the global needs and wants of consumers.
  2. International business helps free flow of technology.
  3. It enables the countries to form regional economic agreements that promote international trade.
  4. It promotes healthy competition which further helps to improve standards of quality of products/services provided globally.
  5. It enhances the revenues earned by serving customers all over the world.
  6. It balances the economic growth between developing countries and developed countries.
  7. It has fostered the growth of MNC’s .
  8. It has promoted the concept of free markets .
  9. It provides advantage of producing more by way of economies of scale.
  10. It enables free transfer for experiences .
  11. It enables efficient utilisation of world resources.
  12. It has widened the scope of world markets

Advantages of Globalization :

  • Increase in employment opportunities : As globalization increases,more and more companies are setting up businesses in other countries. People can get better jobs without having to move to other countries in search of Better jobs. Today, many multinational companies such as Microsoft, Google and Toyota etc. have their offices in India and many Indians work for these companies in India. Without globalization, Indian people would not have had the opportunity to work for such companies in India.
  • Education : With the increase in globalization ,it has become easier for people to move across borders to different parts of the world to acquire better education. This has resulted in an integration of cultures. People  from underdeveloped and developing countries often move to developed countries to get better education. This has also opened their cultures towards the  Indian culture to some extent.
  • Increase in free Trade : An increase in free Trade has opened doors for investors in developed countries. Big companies from developed countries have the freedom to operate in developing countries.
  • Fast flow of Information : Information flows from one part of the world to the other immediately , resulting in the world being tied together. Vital information can be shared between individuals and corporations at a very fast rate.
  • Increase in quality of goods and services : As a result of globalization, people have access to the best quality of goods and services throughout the world . Companies have to strive to provide better quality goods and services to the consumer and the consumer has the liberty of choosing whichever product he thinks is best suited for his needs.

Disadvantages of  Gobalisation :

  •  Environmental Degradation Developed countries can take advantage of underdeveloped countries’ weak regulatory laws in terms of environmental protection.
  • Unfair working condition : Many multinationals have been accused of social injustice by exploiting labor in underdeveloped countries in oder to cut costs. Labor are provided unhealthy working conditions leading to health hazards.
  • Fall in employment growth rate : Though the promotion of the idea that the advances in technology and increase in productivity would create more jobs has been a cornerstone of gobalisation, it has been seen that in the past few years , such advances have led to a decrease in the employment growth rate in some developing economies.
  • Growing disparity among the rich and the poor : 86% of the world’s resources are said to be consumed by the richest 20% of the world population. This means that the poorer 80% only gets to consume 14% of the world’s resources. This is a direct result of globalisation according to some activities who believe that globalisation only serves the rich whereas the poor have to face it’s disadvantages.
  • Rapid spread of deadly diseases : Deadly diseases such as AIDS or other communicable diseases can spread at very fast pace via travelers or due to other means as a direct consequence of globalisation.



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