Globalization and the World Economy

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Globalization and the World Economy
Rodney L. Hughes Sr.
Columbia Southern University

Professor Bob Allen

International Business, MBA 6601-06D June 12, 2007

Globalization and the World Economy

Globalization is a powerful real aspect on the new world system, and it represents one of the most influential forces in determining the future course of the planet. It is described as having “many dimensions: economic, political, social, cultural, environmental, and security” (Intriligator, 2001). Globalization in the 21st century is inevitable. Increased globalization and international businesses are growing because
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The advent of the internet has allowed for rapid access to world markets. Knowing how to use the internet for globalization activities can be very beneficial for a company. In this dotcom economy, everything can be produced anywhere and sold anywhere. The internet has given many companies a new view on how to handle global business needs. Globalization is not just a “me too” trend. There are solid reasons why some businesses embrace the global path and others do not. Three solid business factors for globalization are expansion of sales, to acquire resources, and to minimize risk. Daniels, Radebaugh, and Sullivan (2007) claim that a company’s sales are dependent on two factors: the consumers’ interest in their products or services and the consumers’ willingness and ability to buy them. Higher sales mean higher profits, so increased sales are a major motive for company’s expansion into globalization. To acquire resources manufacturers and distributors seek out products, services, and components produced in foreign countries (Daniels, et al., p18). Foreign sources may give companies lower costs, new or better products, and additional operating knowledge. To minimize swings in sales and profits, companies may seek out foreign markets to take advantage of business cycle differences among countries (Daniels, et al., p18). International operations may reduce operating risk by smoothing sales and profits and preventing
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