Globalization is the process of integration and exchange of economic, social, and cultural aspect of people beyond national boundaries. (Also read: Globalization: Meaning of Globalization and its Advantages and Disadvantages)
Globalization refers to the situation when individuals, groups, associations, businesses, social organizations work on international scale. Though, the term ‘globalization’ is primarily used for economic transaction among countries, it includes other aspects as well. For example, various social service organizations are working at international level for improving the living condition of the people belonging to socially deprived classes.
What causes Globalization?
1. Improved transport system, particularly airways and seaways, have to be credited for massive globalization. Movement between countries has become a matter of few hours.
2. The increased clarity over international laws have promoted businesses to go beyond national limits.
3. The telecommunication infrastructure and internet has made the world even smaller. The recent technological inventions has brought down the cost of voice conferencing. International webinars are held now and then. Due to deep penetration of Internet, even small eCommerce companies are making cross-border transactions.
4. An increased sense of humanity, and the brotherly feeling towards global community, has inspired organization to serve people around the world.
5. Movement of people to foreign countries (a) for education in international universities, and (b) for looking for better job opportunities. For example, Indian people form the largest diaspora in the world.
In the present age of globalization, the economy of countries are inter-dependent. If the economy of one country fall in danger, other countries also feel the pain.
Businesses are engaged in international transactions. Export-import among countries involves a massive amount of money. For example, China has become a massive manufacturing hub. The electronic goods manufactured in China are sold across almost every country of the world.
Multinational-companies have economic interest across several nations. Companies such as Coca-cola, Pepsi, Ford, Unilever, TATA, etc. operate across multiple countries. They have big market and make huge investment in foreign countries. A decline in demand in one country affects the overall performance of these companies.
Cross-border merger and acquisitions
Due to Globalization, there has been an increase in cross-border Merger and acquisitions.
- Tata Steel, an Indian company, had acquired Corus (British steel making company).
- Mittal Steel had taken over another steel company Arcelor in 2006. The merged entity, ArcelorMittal became the largest steel producer in the world.
Emergence of India as a service and IT leader
India has emerged as a major player of service and Information Technology (IT) industry. Many Indian IT, ITes, BPO and KPO companies have a worldwide presence. Many BPO services are provided from remote places. Their services are hired by companies around the world. Due to Globalization, the world is getting smaller every day.
Cultural exchange and philanthropic activities
As a result of globalization, we see cultural exchange among communities. People get the opportunity to exchange ideas and adopt better means of living. For example, the western culture is adopting traditional meditation practices of the east. The eastern people are following the fashion trend of the west. In a global environment, the cultures merge and assimilate together.
Many philanthropic and social organisation are promoting the concept of universal brotherhood. They work for the betterment of entire humanity. For example, Bill & Melinda Gates Foundation, founded by Bill Gates and Milinda Gates, aims to help people globally. They work towards improving the living condition of poor people. They also donate on health programs.
Environmental and other global issues
Various environmental issues have emerged as Global issues. Global warming, air pollution, soil pollution, deforestation, etc. are global issues. The countries are interdependent on each other. The need of the hour is to act together against various environmental and other Global issues so as to ensure a safer world.