Globalization: Explanation, Types, Importance, Example

Currently, MNC’s or multinational Co-operation are considered as the paragon of what Globalization is. MNC are those companies which operate all around the world, it has its branches in different countries, but its headquarter is at one location. For example- Samsung is a Korean company with having it headquarter in South Korea. It has its branches all over the world it has also given countries permission to manufacture the products of Samsung. Other than Samsung, there are various other companies like- Microsoft, Apple, Nestle, Nokia, Google and etc. India and China are often considered as countries which are benefitted from the Globalization.

What is Globalization

Globalization is the way of spreading the products, services, technology, and also provides job opportunities to individuals from all around the world, irrespective of their nationality and culture. It creates interdependence among the countries also facilitates free trade.

Globalization is often considered as a social, cultural, political, and legal phenomenon, where, when it helps in forming a large interactive channel between large varies committee then it serves as a Social Phenomenon when Globalization helps the exchanging of ideas, thoughts works, views then it serves as Cultural Phenomenon. Also, it served as a Political Phenomenon when it has caused in shifting the interest from national organizations to international bodies like- United Nations(UN) and WTO which stands for World Trade Organization, which is why Globalization has also changed the view on how international laws are formed, thereby, fulfilling the work of Legal Phenomenon.

Globalization has always been considered for working for the development and improving the world as a whole by single world culture.

Organizations have been gaining a competitive advantage in various areas due to Globalization. There has been a reduction in the operating costs by manufacturing abroad in these organizations. Raw materials are easily purchased at much lower rates as Globalization has caused in the removal of tariffs.

Definition:

“Globalization can be defined as a historical stage of accelerated expansion of market capitalism, like the one experienced in the 19th century with the industrial revolution. It is a fundamental transformation in societies because of the recent technological revolution which has led to a recombining of the economic and social forces on a new territorial dimension“

WORLD TRADE ORGANIZATION (WTO)

“Globalization is the present worldwide drive toward a globalized economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments“

INTERNATIONAL FORUM OF GLOBALIZATION (IFG)

Globalization can be stated as a method which enables a country to create a market for their product and services beyond their national borders. It includes interaction and connection with various other nations and also gets to know customers who are outside the boundaries of the respective country along with also helps in expanding the market. It is a socio-economic integration that helps in the free flow of goods and services, knowledge, ideas between the national border, resulting in the development of the people and also the global economy.

GLOBALIZATION IN INDIA:

Going back to the history of India, after Independence, for a certain time, India had become a closed economy. India did not do any type of trade with other countries. All goods were produced in India, also restriction was made on the growth of the private countries. There was also a fall in the Indian economy. It was then in 1991 when a new Economic Policy was made in India named- LPG or Liberalisation, Globalisation and Privatisation model was formed. Before this, India was not into Globalisation.

The then Finance minister of India, Dr. Manmohan Singh had made this initiative of the LPG model. Since then the Indian economy had been improving, in comparison to what it was before 24th July 1991. It can be considered that Globalization was one of the positive steps taken for the development of the Indian Economy.

Features Of Globalization:

Few features of the Globalization have been mentioned below:

  1. It gives freedom to the entrepreneurs so that they can start their own industry and also, they can trade both within and outside their own countries.

  2. Globalization aids in the free flow of goods and services among all the nations.

  3. Aids in more collaboration between the entrepreneurs thereby causing modernization, development, and also causing technological advancement.

  4. Encourages financial reforms so that become enough strong to facilitate free trade. Also, it focuses on investments.

  5. It aids in the process of integration of the domestic economies with the world economy.

Advantages Of Globalization:

Few advantages of the Globalization have been mentioned below:

  1. Access to a huge and versatile market is possible with Globalization.

  2. Helps is attracting a workforce from various backgrounds and thus, it promotes a diversified workforce.

  3. Globalization causes the customers to have alternatives to products and thus, they can choose better quality goods at cheap rates.

  4. It can help the industries a reason and way to use new and scientifically advanced technologies, thus, the respective nations have access to advanced technologies.

  5. It helps in having access to a variety of ideas, due to cross-exchange of ideas, thus diversifying the approaches towards something. Diversification can be seen due to Globalization.

  6. It increases the employment opportunities provided to the individuals.

Disadvantages Of Globalization:

Few disadvantages of Globalization have been mentioned below:

  1. It is likely to benefit the rich more than the poor. High competition would cause a rise in price and this is when the poor will face the hurdle.

  2. A decline in the domestic products and services can be seen due to it, which may negatively impact the new business or small-scale industries.

  3. Developed countries are often seen exploiting developing countries due to Globalization.

  4. Globalization would often cause focussing on the needs of the other countries thereby, neglecting the needs of their own countries.

  5. The impact on the environment cannot be neglected here. Globalization has also negatively impacted the environment by pollution.

Also Read: Customer Segmentation: Explanation, Types, Examples

Essential Conditions:

Few conditions of Globalization are:

  1. Removal of Quotas and Tariffs.
  2. Required infrastructure for a smooth results.
  3. Freedom should be provided to the business and industries.
  4. Liberalisation of government rules and regulations.
  5. There should be developed money and capital market.

Types of Globalization:

There are various types of Globalization present currently. Few of them are mentioned below:

1. Financial: Helps in connecting with the world’s financial systems

2. Economic: A global economic system that aids in an easy movement of goods, production, capital, and resources. “Be Bold” No-Essay $10,000 Scholarship

3. Technological: Connection the nations through technology like telephones, internet, etc.

4. Political: An attempt where countries are adopting identical policies and approaches of government in order to facilitate globalization.

5. Cultural: Cultures from various countries are merged together.

6. Ecological: Caring for the Earth and nature as a whole.

7. Sociological: A belief of being global citizens and practising equal rights.

Sohini Mazumder
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Sohini Mazumder

Sohini Mazumder, from Kolkata, currently doing undergrads in Economics. She is more enthusiastic about learning new things.

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