Reasons for Globalization

Four development have spurred the trend Globalization :improved transportation and communication technologies , loosened regulation on financial institution increased demand for imported goods, and lowered international trade barriers . Most companies move their business operations to foreign countries by going global. They take their business overseas for different reasons. These companies adopt the reactive or defensive approach to stay ahead of the competition. A few of them take the proactive or aggressive approach to accomplish the same purpose. A majority of them choose to adopt both approaches to avoid a decrease in their competition. In order to remain competitive, companies move as quickly as possible to secure a strong position in some of the key world or emerging markets with products customized for the need of the people in such areas in which they plan to establish. Most of these world markets are attracting companies with new capital investments with very good incentives. Some of the reactive or defensive reasons for going global are: (1) Trade Barriers (2) Customer Demands (3) Globalization of Competitors (4) Regulations and Restrictions

Advantages and Disadvantages of Globalization

Resources of different countries are used for producing goods and services they are able to do most efficiently.

Consumers to get much wider variety of products to choose from. Consumers get the product they want at more competitive prices. Companies are able to procure input goods and services required at most competitive prices. Companies get access to much wider markets It promotes understanding and goodwill among different countries. Businesses and investors get much wider opportunities for investment.

Adverse impact of fluctuations in agricultural productions in one area can be reduced by pooling of production of different areas.

Disadvantages
1. Increased flow of skilled and non-skilled jobs from developed to developing nations as corporations seek out the cheapest labor 2. Increased likelihood of economic disruptions in one nation effecting all nations 3. Corporate influence of nation-states far exceeds that of civil society organizations and average individuals 4. Threat that control of world media by a handful of corporations will limit cultural expression 5. Greater chance of reactions for globalization being violent in an attempt to preserve cultural heritage 6. Greater risk of diseases being transported unintentionally between nations 7. Spread of a materialistic lifestyle and attitude that sees consumption as the path to prosperity 8. International bodies like the World Trade Organization infringe on national and individual sovereignty