The process in which the industries converge economically, financiall and political or the convergence of the system all over the world is known as Globalization.
There are different types of Globalization that can be studied which are as follows :
The integration of the economic system which could be done through growing international trade practices, investment and transfer of the capital.
It is the form of globalization which is followed by the movement of capital and of the financial services across the world.
Integration of the different cultures present in different countries all over the world.
Converging of the political system and the process all across the world
Dimensions of the economic Globalization
There are different types of Globalization patterns that come under Economic Globalization which are as follows :
- Globalization in the production process
- Globalization in the market
- Globalization of the competitors
- Globalization in the technology
- Globalization of different types of industries
Initiators for Globalization
- Liberalization in the economy
- New technological advances
- Institutions becoming multilateral
- Development of international economic integration
- Movement towards free market system
- Increasing costs of research and development
- Expansion in the business operations
- Development of logistical functions
- Increasing customer segments in the global market
Barriers of Globalization
- Government laws and control
- Increasing trade barriers
- Increasing cultural boundaries
- Cold wars and civil disturbances
- Short sightedness of management
Reasons for the support of Globalization
- Increasing the economic efficiencies
- Improvement in trade practices
- Movement of capital across different borders of the world
- Improves efficiency of working in small firms
- Enhances the welfare of the consumers
Criticism of Globalization
- Chances of unequal competition in Globalization where developed countries compete with developing countries.
- It increases the gap between the rich and poor.
- It reduces the existence of the domestic industries
- Creates employment and lay offs in the country
- Creates problems in the balance of payment
- Increases the volatility of the market
- The power of the national states is also reduced.
Strategies For Globalization
- Defender Strategies: when the industry in the home market counter the entry of foreign firm into its home market.
- Dodger Strategies:it is dome for the firms that are home market oriented to localize their operations in other countries as well.
- Contender Strategies:the companies upgrade their technology or transfer it to foreign market.
- Extender Strategies:use the expertise from the local market to produce similar goods in foreign market.