Definition

Globalization means the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transaction in goods and services and of international capital flows and also through the more rapid and widespread diffusion of technology.

Features of globalization

• There is reduction in trade barriers resulting in free flow of goods across national border.

• Companies plan and organize their business at the global level.

• There is free flow of capital, technology and factors of production among different nations, business in one country can acquire these factors from another country.

• Companies operating globally make no distinction between domestic and foreign market they develop a global outlook of business.

• Business houses locate production and distribution facilities in most profitable countries. they are not guided by national priorities.

• Organization structure of business has a global orientation.

• It deal with both goods and services( banking, insurance, transport)

• Companies have global consumer. Product may be designed in one country, produced in another and sold in yet another country.

• Companies doing global business are known as multinational or transnational corporation.

benefit• World development• Access to new market and new technology• Replacement of import –substitution by export

promotion.• Integration of economies.• Labour abundance benfit.• Economic Interdependence among different nations can

build improved political and social links.• Globalisation promotes specialisation. Countries can begin

to specialise in those products they are best at making.• Creates competition for local firms and thus keeps costs

down.• much wider choice of goods and services By buying

products from other nations

Limitation• Discriminatory flow of capital.• Inappropriate transfer of tecnnology• Blow to handicraft• Take over• Competition with domestic firm.• Cheap imports from developing nations could lead to

unemployment in developed countries where the cost of production is high.

• Choosing to specialize in certain products may lead to unemployment in other sectors which are not prioritized.

• ‘Dumping’ of goods by certain countries at below cost price may harm industries in order countries