Globilization and the World Economy

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Globilization and the World Economy

Globalisation in general means the effort of a company moving into

other territories (outside the national boarders of a country) to sell

its goods and services to increase profits as a result of expansion.

Globalisation incorporates both opportunities and risks which change

the way businesses are managed worldwide. It brings about a

well-diversified portfolio for such a company. This is because the

company is guarding itself from huge losses in case of economic

uncertainty. Significant gain in one company can cover for the losses

made in another company. By this, the globalise company would

experience constant cost pressure which entice them to continuously

produce and improve on its activities. Major companies like Nestle,

Shell, Nokia, Ford and Toyota among others have gone global because of

the benefits mentioned above.

Currently, more and more entities are merging to become

supra-multinationals. Companies become more interested in going global

once their value goes a little higher than those of the developing

countries. Most of these countries globalises via legitimate causes

whilst others are just followers. This gives the reason why some

companies become leaders in the global economy with others becoming

bankrupt. In fact, there are many other advantages that are enjoyed

when a company goes global, such as increase in efficiency, increase

in foreign direct investment and increase in national income.

However, there are certain disadvantages associated with it such as

unemployment and exploit on developing countries; these can be seen in

the following paragraphs below. This assignment wo...

... middle of paper ...

...ther hand if the government

remain unconcern abut the issues concerning globalisation, not only

will the developed countries use it to exploit the under-developed

ones, but also they would use it to politicised a notion


Clark B. and Wallace J. (2002) Global connections: Canadian and world

issues. Toronto, Prentice Hall, pp. 200-213.

Ghosh S. R. (2001) Reverse Linkages: The Growing Importance of

Developing Countries [Internet].

Available from:

[Accessed 28 September, 2004]

IMF (2002) Globalization: Threat or Opportunity? [Internet]. Available


[Accessed 29 September, 2004]

Roston E. & Fonda D. (2002) ‘China’s New Party’, Time, 28th January,

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