Globalization and its effects on business

Globalization has been defined as the emergent interdependence of various nations that is a product of increased integration of people, ideas, finance and information in the global market. Its main elements are flow of investments across borders and international trade (“Globalization and International Trade,” 66). Globalization has a long history, some literature trace its origin to centuries ago when empires like that of Babylon extended beyond several nations bounders. In addition technological advancements and liberalization of trade and capital markets have been linked with its rapid spread in the 21st century. On the other hand globalization has also elicited several controversies. These have been associated with people’s values and relative locations. For instance it has been viewed as a strategy for developed nations to maintain their superiorities by ensuring economic dominance on the developing ones. More to this it has raised many questions on people, like how it’s likely to transform their ways of living. Many are not so sure whether the benefits of globalizations outweigh its costs. In business globalization affects productions, financing, and even marketing of products and services. Globalization has therefore provides an array of both benefits and costs to businesses.

From a global perspective globalization effects to various countries economies, has been reported to vary from one region to the other. For instance while many countries in Asia are said to have benefited greatly form globalization, those from sub Saharan Africa have not yet enjoyed the same benefits. The latter are said to be integrating slowly with world economy. A country participation in global market though has been said to bring a mixed fortune to its economy. For instance, the minimal trade barrier means that producers can access larger international markets. This brings both fortunes. On one hand, they can benefit from division of labor, while on the other spectrum, they face stronger competition. This in turn means efficient production by the domestic producer due to the specialization and need to maintain a competitive edge faced with foreign competitors. Consumers also enjoy a wide variety of products from global market at competitive prices (“Globalization and International Trade,” 67).

Local businesses are also able to benefit from new technologies spilling over from their trade partners. These can be particularly helpful to business in developing nations which requires catching up rapidly with those in industrialized nation.

There are also several risks associated with globalization that deserves consideration. For instance by choosing to participate in the international market, a country exposes its industries to competition from other nations. This competition can hurt some of its key industries and other small industries which may not be able to adjust to the new level of competition. In such an occurrence those business that are weaker competitors will have to shut down. In developing nations in particular there is a feeling that newly established firms should be protected till they reach a level at which they can compete with foreign industries (“Globalization and International Trade,” 67).

Globalization is also viewed in some sectors as positive in that, it increases employment opportunities especially for developing countries. Business can be able to acquire cheap labor with globalization through outsourcing and mergers. The idea of outsourcing though has both benefits and costs. On one hand, businesses benefit by lowering production costs while workers loss employment and those who get to do the job work under poor conditions and low pays.

Businesses must change their operation strategies and increase investment faced by globalization. For instance, business must review their capital investment. This can be explained by examining the contrast between the sizes of market when dealing with a domestic market and operating in international market. In such a scenario a business strategy that results in increased investment is more likely to reach a large customer segment. Failure by a company to globalize means losing the customers to competitors. If competitors make their move before, they secure both loyalty from customers and their brand becomes recognized. In addition they are also able to get key partners as well as agreements for distribution. Business that are therefore slow to adopt are soon phased out of business (Myatt, Para 4). To survive in a global market, business must therefore adopt global strategies in management. Emirates group, which has its origins United Arab Emirates, is an example of a business that has transformed its management due to globalization. It is reported to have a strong brand recognition and high competitive advantage over rivals in the aviation industry. On the other hand, to maintain its customer loyalty and attract new customers while operating on a global scale of over 100 nation presence, the company provides global level services. For instance in their website it is possible to use more than one language to make a booking reservation, and they have customized entertainments for customers in their flight. More to that the company is also reported to employ a cabin crew that has a global outlook in terms of nationality, languages and religion (“GLOBAL BUSINESS ENVIRONMENT, 25”).


Globalization can be viewed as being both beneficial and costing to businesses operating either at a domestic level or global market. As results of its various effects business are forced to change their management strategies or risk being forced out of business. Emirates group is a good example of how firms can adopt successfully to compete at a global market level and maintain their brand name as in domestic market.

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