ISSN: 2474-5146 (Online) 2474-5138 (Print)

23. A STUDY ON IMPACT OF

GLOBALIZATION ON BUSINESS
M. SIVANYA, Ph.D. Research Scholar, Department of Economics, Mannar
Thirumalai Naicker College, Madurai.EMail Id - sivanya77@gmail.com
Mobile No : 9360359513, 9092121400

ABSTRACT unsurpassed characteristics, where

T he contemporary generous,
capitalistic and economic action
becomes a conglomerate of things and
more or less a mutual advantage of
certain cooperation is recognized, a
business connection is immediately
reasons, analysis, information, means, established.
mediums, skills and predispositions.
In terms of minimized barriers and KEYWORDS
openness of the world, the inevitable Globalization, Internationalization,
process of the globalization and thus business, global markets, economic
the business actions represent projects integration
that face success potentials, also as risk
and failure potentials. The indisputable INTRODUCTION
accent on these aspects is certainly The global changes in the world,
and thus success and therefore the changes in political, economic and
reliability of the business ventures that business activities as well as the
the last word goal is that the economic development of technology, transport
satisfaction, minimizing the risks and communications, impose the
as well because the establishment need for enterprises in its struggle for
of long-term experiences so as to survival, to change their strategies and
take care of a specific enterprise go out from the borders of their own
during a particular environment. The country. Limited market, competitive
participation on the world’s global pressure, demand for cheaper resources
markets, the internationalization and the dynamics of the postmodern
and therefore the transfer of the era, forcing business leaders to change
business activities on all geographic their focus from traditional targets to
meridians, encountering different and alternative measures for successful
sometimes uncertain environments business and the entrance on global
may be a constant business story of markets, with the purpose of making
the international economic activity for competitive advantage.
a minimum of three centuries ago.
The global economic interaction is as THE IMPACT OF GLOBALIZATION
old because it is old the society in its ON THE BUSINESS
more or less organized form. From The globalization of markets refers to the
the economic revolution until today, growing economic integration and the
there’s ongoing irreversible global growing interdependence of countries
economic integration. The reasons worldwide. Internationalization of the
are simple, business and profits don’t companies refers to the tendency
recognize borders, national and cultural of the companies to systematically
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 International Review of Business and Economics

increase the international scope aspect, has two main components:

of their business activities, while the globalization of markets and
globalization refers to a market globalization of production. The
trend intensive economic relations globalization of markets refers to the
between the countries in the world. merging of historically different and
Globalization encourages companies separate national markets into one
to internationalize and to substantially big global market. In recent years,
increase the volume and types of cross- constantly is discussed that the tastes
border transactions in goods, services and preferences of consumers in
and capital. Also, the globalization leads different countries and nations begin
to rapid dissemination and diffusion of to resemble on a global level and the
products, technology and knowledge in way that they help in the creating of
the world, regardless of the origin. a global market. The companies that
The process of globalization is a offer standardized products worldwide,
natural process that is a result of help in the creation of a global market.
the growing and accelerated process The most common global markets are
of generalizing of the character not the markets for mass consumer
and process of production. The products, because there are still
development of science, engineering differences between countries in terms
and technology and the expansion of of tastes and preferences, which still
markets for goods, worldwide, lead have great meaning and a sort of
to internationalization of economic brake on globalization, but these are
and financial developments and their the markets for industrial goods and
global deployment. If globalization is materials that have universal need the
understood as a process that leads world. The globalization of production
to greatereconomic integration of refers to the tendency of the companies
national economies, as a process of to find suppliers of goods and services
fragmentation of the world economy from locations around the world, in
and the international economy, than order to realize the advantage of
the globalization is a process of national differences in price and quality
opening of national economies through of the factors of production.
the removal of economic and financial POLITICAL CHANGES
boundaries of national economies The globalization trend of unifying and
and thus their transformation into an socializing the global community, as well
international economic and financial as, forming preferential trade agreements
market. and groupings such as NAFTA and the
Globalization is a worldwide trend, European Union, which united more nations
through which economies in the world in a single market, allow the companies
lose their borders and connect to each significant market opportunities. Two
other. The companies are no longer aspects of this trend, which contribute to
imprisoned in their borders and can the globalization of business operations
implement a wide range of business are: progressive reduction of barriers for
activities around the world. Many trade and foreign investment by most
companies are present in markets governments, which leads to intense
around the world, procured their raw opening new markets by international
produce or conduct research and companies, which also exported them and
development worldwide. Trade barriers build production facilities in them, and the
fall and global trade between countries privatization of most of the industry in the
in goods and services is growing faster former communist countries, as well as
than domestic production. opening up their economies to global
Globalization, developed from economic competition.

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DEVELOPMENT OF TECHNOLOGY cannot be achieved at home.

The development of computing and EXPENSES
communication technologies has The liberalization of trade and
enabled increased flow of ideas and investment flows, which emerged in the
information across the borders of the 80s of the last century, which inexorably
countries, providing introduction of the moved forward, is a stimulus for
consumers with the goods worldwide. globalization of the businesses. Trade
Internet and networking have enabled liberalization, global consumer habits,
smaller companies to compete rising development costs and the need
globally, as a result of the rapid flow of for economies of scale, pressure from
information, regardless of the physical foreign competitors in the domestic
location of the seller or buyer. Also, market as well as the development
allows international companies to hold of information and communication
corporate meetings among managers technologies, are considered drivers
from headquarters and branches, of the globalization. Because of the
without wasting unnecessary time for need to introduce new products and
travel. investment in research, development
INTERNATIONAL BUSINESS CLIMATE and innovation, achieving economies
The development of communication of scale, reduce costs and access to
and information technologies cheaper raw materials; companies
have contributed to the process are forced to plan activities, taking
of globalization, but also provided into consideration the global market.
instruments that facilitated the Economies of scale and cost reduction
processes of globalization. Newly are the main goal of management.
emerging markets also recognize That is why companies decide to locate
the economic benefits, technological production in countries where the
development and growth opportunities cost of developing and producing are
that globalization provides them. smaller.
DEVELOPMENT OF MARKETS
Information and communication CONCLUSION
technologies, the rapid development Today, the word international company
of international tourism, widespread is quite a common phenomenon, which
cultural exchange and improved the reflects actual business transactions
living standards, in many developing and large expanses between a number
countries have contributed to the of people from different cultures
emergence of a group of consumers in and with different approaches.
different countries and regions of the What unites them in the complex
world with similar educational profiles, network of relationships is the need
lifestyle, purchasing power and for of development, rapid exchange of
good products, as well as, aspirations resources and tools andintegrated
for high quality. This scenario, in cooperation, which should contribute
combination with the liberalization of to ensuring cooperation and ensure the
international trade and the availability transfer of capital. Can be concluded
of global distribution channels, opens that today’s decisions for crossing
great opportunities for companies that domestic borders and internationalize
want to offer their products to global the business is a prerequisite for
markets. Large market potential exist serious growth and development of a
outside of the domestic market, that business entity. As such, he is always
is why the companies go out on the searching and analysis of potential
foreign markets, generate sales and areas where the company from small or
have opportunities for profit that medium business entity would become

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a corporate organization striving to

constantly expanding and increasing
its own portfolio. To make a decision to
invest outside of the own borders is a
complex and comprehensive process.
This process is achieved through
several stages and approaches that
contain a long-term comprehensive
analysis and scanning newly elected
investment location.

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