Globalization encompasses the following:



Doing or planning to expand, business globally.

Global orientation of organizational structure and management culture

Globalization involves following:

Free flow of technology, expertise and intelligence

Free flow of capital among different countries

Free flow of Human resource among different countries

Increase in Foreign direct investment

Increase in international financial investments and transactions

Why go International?

The factors which motivate or provoke firms to go international may be broadly divided into two groups:-

Pull factor

Push factor

Most of push factors are reactive reasons

Profit advantage: An important incentive for international business is the profit advantage.

Growth Opportunities: The enormous growth potential of many foreign markets is a very strong attraction for foreign companies.

Domestic Market Constraints: Domestic demand constraints

Drive many companies to expanding the market beyond the national border.

Competition

Government Policies and Regulations

Spin-off benefits

Strategic vision: Company wants to gain the strategic advantages of internationalization.

Factors hindering Globalization are:

Government policies and procedures because some nations are still not ready to open their borders for foreign companies

Those which are resistant to change their already adopted practices and incorporate new one

Lack of Experience

Trade barriers

Increasing complexity and competitiveness for home companies

Factors facilitating Globalization are:

Low cost of labor

Large and growing local markets

Increasing Entrepreneurship nature

Competition

Adaptability to newest technology

Essential conditions for Globalization:

Business freedom

Facilities

Government support

Resources

Competitiveness

Orientation: A global Orientation on the part of the business firms and suitable globalization strategies are essential for globalization

Effects of Globalization:

The foreign currency reserves of government increases

Exports have increased and become competitive

Brings in latest technologies

Introduction of latest technologies changes the lifestyle.

Exchange of Information increases knowledge

Growth in economy