Key Drivers Of Globalisation Case Study

Discuss the key drivers of Globalisation since the 1970s and demonstrate how these have altered the nature of international business.
The growth of globalisation, over recent decades, has seen the advance towards an increasingly integrated and interdependent world economy (Hill, Cronk & Wickramasekera) and has ultimately changed the world. Hill et al, 2014, identified the occurrence of globalisation, since the 1970s, has been the result of two key drivers: declining trade and investment barriers and technological change. In addition, I believe that globalisation has been further driven by numerous micro-factors which have gained prominence, increasing as a result of these forces, transforming the way trade and investment occurs worldwide, changing

Barriers and government restrictions (such as tariffs and quotas) impact a firms’ ability to export or invest in goods, services or activities in other countries, impacting their ability to successfully operate globally. Restrictions have been reduced, however, by the development of global institutions (particularly the General Agreement on Tariffs and Trade (GATT), World Trade Organisation (WTO)(1994) and International Monetary Fund (IMF)), who focus on removing barriers to free flow of goods, services and capital worldwide, liberalising trade, policing global trade and investment and controlling the foreign exchange market (which significantly affects international business trading and operation). The progressive reduction of barriers and restrictions to foreign direct investment (FDI) since the 1970s, became a driving force for the expansion of global business and economies. Companies are now able to push past nations boundaries, holding a presence in countries around the globe. I have also understood this factor to have greatly contributed to the emergence of the globalisation of markets and production, and in rapidly increasing the use of FDI in business operations in recent decades, resulting in a dramatically changed nature of international

Major developments in microprocessors, telecommunications (satellite, optical fibre, wireless etc.), the internet and World Wide Web (WWW), have facilitating improved communication, information processing and transportation for international business. I see this to be greatly beneficial to improving the nature of international business, establishing greater efficiency and opportunity for global success. Technology can provide greater efficiency due to the reduced costs of production (microprocessor advancement and Moore’s Law) which have become a possibility through technological advance. I believe the internet and WWW to be one of the biggest influencers of globalisation since the 1990s. This platform provide the opportunity to increase offshoring, produce innovative products and better organize the flow of production along a global supply chain (as Komatsu took advantage of, Hill et al, pp.24), and in addition to the cost savings, enables small businesses to develop and compete on the international market. I believe this to greatly alter the nature of business, because it facilitates the growth potential of smaller enterprises, increasing their involvement in internationalism, allowing them to enter the global market and successfully compete because of the benefits and reach of the internet and web. In using Hill et al’s (2014) words, the web has become an equaliser, it limits the