Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.Globalization implies the opening of local and nationalistic perspectives to a broader outlook of an interconnected and interdependent world with free transfer of capital, goods, and services across national frontiers.Financial and industrial globalization is increasing substantially and is creating new opportunities for both industrialized and developing countries. The largest impact has been on developing countries, who now are able to attract foreign investors and foreign capital.The positive effects of globalization are mentioned below:
1.Growth in trade:
Globalization is liberalizing the world trade. There has been a dramatic decrease in the barriers of international trade due to globalization.The volume of import and export trade has increased.Globalization further leads to a competitive business environment.Qualitative goods and services are produced. Productivity also increases.The contribution of trade in economy increases. Establishment of the WTO has facilitated the world trade.
products and services.
Globalization results in increase in high level of competition among the business firms.It ultimately helps to improve the quality of products and services.The domestic companies should compete with foreign companies.They need to upgrade the quality of their products to enhance customer satisfaction and survive in the market.In such a situation,the customers’ supremacy is maintained.
3: Legal Effects:
Increased media coverage draws the attention of the world to human rights violations. This leads to improvement in human rights. Global economic growth does not necessarily make people happier, worldwide free trade, should also benefit humanity as well as protect nature, not just reward managers and stockholders. Those who would be authentic leaders need to address inequalities. Globalization should promote openness and information along with exchange with greater democracy and prosperity
With globalization,companies expand their business in developing countries. It further helps to generate employment in those countries.In developing countries,there is often lack of capital which is hindering the economic growth and generation of employment opportunities. Due to globalization, capitals are gradually being shifted to the developing countries resulting in more employment opportunities.
5.Foreign direct investment(FDI):
Globalization leads to increased foreign direct investment (FDI).The liberalized economic policies adopted by the countries provide ground for the flow of capital from the developed countries to the developing and under developed countries. Besides,technology and management systems are also flown to those countries. FDI has been a cornerstone for the economic development of the developing and under developed countries.
Globalization promotes international cooperation through trade and economic relationship.Such relationships are driven by multinational companies, reduced trade barriers, and increased interdependence among the countries.
One of the most visible positive effects of globalization is the improved quality of products due to globe competition. Customer service and the ‘customer is the king’ approaches to production have led to improved quality of products and services. As the domestic companies have to fight out foreign competition, they are compelled to raise their standards and customer satisfaction levels in order to survive in the market. Besides, when a global brand enters a new country, it comes in riding on some goodwill, which it has to live up to. This creates competition in the market and a survival of the fittest situation.