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...
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...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
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Clark B. and Wallace J. (2002) Global connections: Canadian and world
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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
from:
[Accessed 29 September, 2004]
Roston E. & Fonda D. (2002) ‘China’s New Party’, Time, 28th January,
p.39-43.