Globalization Questionnaire
As the modern companies evolve with new technologies, many organizations are forced to be under competitions striving to produce advanced, better, and newer products and services. Globalization used to be for big company, but today, even small to mid sized businesses, with right expertise, financial stability and capabilities are reaching out globally searching for bigger market share, cheaper labor, and to increase profits.
Globalization
Globalization, according to Hill (2005), states that it refers to the shift toward a more integrated and interdependent world economy which includes globalization of markets and production.
There are many traditional international trade theories such as life-cycles theory, Heckscher-Ohlin theory, and going back to 16th and 17th century, there a theory called mercantilism which argued for a country’s best interest. Among many are few theories that support the concept of the globalization which include Smith’s theory in 1776 called free trade which was proposed that there no government to be influenced to restrict quotas or duties. (Hill, 2005) Another theory called comparative advantage also suggests that unrestricted free trade would increase the world’s production where it is beneficial for everyone. (Hill, 2005)
Drivers of Globalization
There two major factors that shifted the trend toward globalization which are declining of trade barriers and developments in communication, information and transportation.
For the declining of the trade barriers according to IMF.org (2008), over the past 20 years, the growth of world trade has averaged six percent annually. Since the establishment o ...