Globalization

Globalization

Burroughs, Jekisha; Donaldson, Edward; Sheppard, Joshua

Embry-Riddle Aeronautical University

MGMT436

What exactly is globalization?

“Globalization describes a process by which national and regional economies, societies, and cultures have become integrated through the global networks of trade, communication, immigration and transportation” (The Financial Times Ltd, 2014). At the root of globalization is the idea of globalism which seeks to understand and describe the state of the world by looking at its networks of interdependence. This interdependence spans across distances and is facilitated by the exchange of capital and goods, information and ideas, people and culture, and environmental and biological substances (Keohane & & Nye, 2000). Globalization is therefore based on the underlying premise of globalism and is a term used to describe the speed at which these exchanges occur as well as the effect they have on the world.

More often than not though, the term globalization is used to describe business, the economy, and their worldwide linkages. The Oxford English Dictionary supports this view and defines globalization as “the process by which businesses or other organizations develop international influence or start operating on an international scale” (Oxford University Press, 2014). References to globalization primarily focus on the integration of national and international economies through trade, migration, technology and foreign direct investments. This definition is based on the economist’s view of comparative advantage which essentially states that if one nation is able to produce a product better than the other, then each nation should specialize in their area of expertise and then trade their final product. This theory hypostasizes that the resultant trade of goods and/or services will benefit the economic status all involved. To this end, many nations have developed policies that encourage cross border trades,...