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Globalization Meaning, Nature and stages of Globalization, features of Globalization

The aim of globalization is to secure socio- economic integration and development of all the people of the world through a free flow of goods, services, information, knowledge and people across all boundaries.

Globalization is seen as a conscious and active process of expanding business and trade across the borders of all the states. It stands for expanding cross-border facilities and economic linkages. This is to be done with a view to secure an integration of economic interests and activities of the people living in all parts of the world. The objective of making the world a truly inter-related, inter-dependent, developed global village governs the on-going process of globalization.

Globalization is the concept of securing real social economic, political and cultural transformation of the world into a real global community. It is considered to be the essential means for securing sustainable development of all the people of the world.

“Globalization represents the desire to move from national to a global sphere of economic and political activity”. It seeks to transform the existing international economic system into a unified system of global economics. In the existing system, national economies are the major players. In the new system, the globalized economic and political activity will ensure sustainable development for the whole world.

“Globalization is both an active process of corporate expansion across borders and a structure of cross border facilities and economic linkages that has been steadily growing and changing.” —Edward S.Herman

“Globalization is the process whereby social relations acquire relatively distance-less and borderless qualities.” —Baylis and Smith

Nature of Globalization

  1. Liberalization

It stands for the freedom of the entrepreneurs to establish any industry or trade or business venture, within their own countries or abroad.

  1. Free trade

It stands for free flow of trade relations among all the nations. Each state grants MFN (most favored nation) status to other states and keeps its business and trade away from excessive and hard regulatory and protective regimes.

  1. Globalization of Economic Activity

Economic activities are be governed both by the domestic market and also the world market. It stands for the process of integrating the domestic economy with world economies.

  1. Liberalization of Import-Export System

It stands for liberating the import- export activity and securing a free flow of goods and services across borders.

  1. Privatization

Keeping the state away from ownership of means of production and distribution and letting the free flow of industrial, trade and economic activity across borders.

  1. Increased Collaborations

Encouraging the process of collaborations among the entrepreneurs with a view to secure rapid modernization, development and technological advancement.

  1. Economic Reforms

Encouraging fiscal and financial reforms with a view to give strength to free world trade, free enterprise, and market forces.

Globalization accepts and advocates the value of free world trade, freedom of access to world markets and a free flow of investments across borders. It stands for integration and democratization of the world’s culture, economy and infrastructure through global investments.

Typical Stages of the Globalization of Business Companies

  1. “In the first stage of globalization, companies normally tend to focus on their domestic markets. They develop and strengthen their capabilities in some core areas.
  2. In the second stage of globalization, companies begin to look at overseas markets more seriously but the orientation remains predominantly domestic. The various options a company has in this stage are exports, setting up warehouses abroad and establishing assembly lines in major markets. The company gets a better understanding of overseas markets at low risk, but without committing large amounts of resources.
  3. In the third stage of globalization, the commitment to overseas markets increases. The company begins to take into account the differences across various markets to customize its products suitably. Different strategies are formed for different markets to maximize customer responsiveness. The company may set up overseas R&D centers and full-fledged country or region specific manufacturing facilities. This phase can be referred to as the multinational or multi-domestic phase. The different subsidiaries largely remain independent of each other and there is little coordination among the different units in the system.”
  4. In the final stage of globalization, the transnational corporation emerges. Here, the company takes into account both similarities and differences across different markets. Some activities are standardized across the globe while others are customized to suit the needs of individual markets. The firm attempts to combine global efficiencies, local responsiveness and sharing of knowledge across different subsidiaries.

8 Important Features of Globalization

  1. Liberalization

It stands for the freedom of the entrepreneurs to establish any industry or trade or business venture, within their own countries or abroad.

  1. Free Trade

It stands for free flow of trade relations among all the nations. Each state grants MFN (most favoured nation) status to other states and keeps its business and trade away from excessive and hard regulatory and protective regimes.

  1. Globalization of Economic Activity

Economic activities are be governed both by the domestic market and also the world market. It stands for the process of integrating the domestic economies with world economy.

  1. Liberalization of Import-Export System

It stands for liberating the import-export activity and securing a free flow of goods and services across borders.

  1. Privatization

Keeping the state away from ownership of means of production and distribution and letting the free flow of industrial, trade and economic activity across borders.

  1. Increased Collaborations

Encouraging the process of collaborations among the entrepreneurs with a view to secure rapid modernization, development and technological advancement.

  1. Economic Reforms

Encouraging fiscal and financial reforms with a view to give strength to free world trade, free enterprise, and market forces.

  1. Several dimensions of Globalization

Increased and Active Social, Economic and Cultural Linkages among the people. Globalization has social, economic, political cultural and technological dimensions. It involves all round inter-linkages among all the people of the world.

Free flow of knowledge, technology goods services and people across all societies is it key feature. It attempts at making geographical borders soft permitting all the people to develop their relations and links.

Globalization accepts and advocates the value of free world, free trade, freedom of access to world markets and a free flow of investments across borders. It stands for integration and democratization of the world’s culture, economy and infrastructure through global investments.

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