Globalization is a process which involves assimilation of markets and technologies between different nations or rather at a worldwide ground. This ensures that Industries and individuals are able to reach the outside world easily and at a cheaper price. All the same this kind of integration involves a lot of challenges on both / all the parties involved (Wolf, 2004). For example, globalization has in one way or another contributed to the leaching of some community’s cultures and thus human degradation. When people migrate from their original home areas, they tend to get be incorporated in some new cultural practices thus leaving their original traditional cultural live and taking up a new life(Globalisation, 2001). On the other hand globalization is of great benefit as it helps create new markets for some industries products, It has also led to the development of infrastructure, Telecommunications and transportation at large. Technology has also developed and mostly the internet since many people tends to communicate with people who are far from them easily and at an affordable price and at the same time at a very high speed of time. Globalization greatly affects the business, Economics , work organizations and he socio-cultural resources (Guinness, 2003).
Factors affecting globalization/ Determining whether an industry should be international, regional or local
Basically, internet is a result of technology development. It has helped in bringing people together by ensuring that people are able to communicate despite the distance between them. Industries are also able to gain market by communicating and finding new customers through the internet, they are able to market their products and company as well (Chew, 2003). This ensures that companies gain market even from the outside world thus ensuring that globalization is enhanced through mixing the world culture into one major international culture.
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In the modern world, transportation has been enhanced through the development of Airlines and infrastructures .This has ensured that goods are moved around the world at a cheaper price thus ensuring the development of globalization (Donnellan, 2002). This has also enhanced the development and creation of new market for different industries all over the world thus ensuring that people can buy goods from different countries easily and at an affordable price (Donnellan, 2002). The creation of new markets has ensured / enhanced good relations between countries thus ensuring that citizens from the different nations socialize and exchange ideas and as a result a social cohesion is fashioned.
The world economy has substantially become very complicated of late. Countries apply for loans from different countries so that they can manage to purchase goods somewhere else or make some developments in their social, economical or political life. The current condition shows that the world has become intricately connected (Tausch, 2008).
Technology, job vacancies amongst other factors have promoted and enhanced the nature of people moving from their rural homes and getting settled in the developing towns. As a result globalization is enhanced and its continuity ensured. When people migrate into a new home, it really becomes hard for them to survive in their old culture since the people they meet their have their own culture which they believe that each and every person living in that region should recognize and respect. This ensures that the new immigrants are forced to leave their old way of living and start the new life (Stiglitz, 2002). This state of having to change ones culture so as to fit in ones new community enhances the adoption of cultures while at the same time promotes the denouncement of one’s original cultural values. When people migrate they are able to learn new things that they could incorporate in their economic live and end up being successful. They also offer labor services to the industries thus promoting the production rate thus ensuring that the company is able to increase its income and revenue levels (Ghauri, 2008).
Why some industries become global while others remain regional
The globalization of industries could be determined by various factors amongst them being the time taken by a certain industry to mature locally. In most cases when an industry matures locally it tends to move to the outside world to invest in new markets while at times other industries tend to further its prospects locally. All this is determined by various factors which need to be considered before a company/ organization can think of going to invest or get involved in a global market (Crook, 2002). An industry is out to make profit and out do its competitors so whatever it takes to make the profit will be equally right to them thus the creation of a competitive force amongst the industries which is very healthy for the development and growth of the international market. The market size, the product life span, Available resources, Government regulations, the customers taste and also the cost of production and maintenance are the main factors that determine whether an industry is classified as a local, regional or an international / global industry.
There tend to be quite a number of factors that verify the companies that qualify to be involved in global markets, those which should remain local and those which should only be involved at a regional market. The market size is one of these factors. For example, the Airline company as considered to be a global market business. This due to the fact that it has a big market size , many people need to move from one country to the other and the fastest and most applicable mode of transportation stands out to be The air transport. The cost of production of new airplanes is also a factor that is normally considered or rather that was considered when the airline industry was been termed as an international and more so a global market industry. The market needs to be global so that it can sell of aircrafts to huge and developed markets which in return will determine the growth of the market by determining the cost of new jets. This industry needs huge amount of money so as to settle and control its functionality. Nationally, such kind of money is just too much and unaffordable at the other hand. No country can manage to fund an airline on its own. Due to this reason, the industry has been allowed to be a global industry so that its development can be supported by different nations.
Industries with perishable goods tend to be regional or even local. This is to try and prevent losses and delivering goods that are not worth and also that do not reach the human quality and standards. For example the bakery industry in most cases is considered as a local industry but can be termed as a regional industry when the mean of transport are good and of high standard. Cakes, bread and such other stuffs cannot be transported from Kenya, for example, to the United Kingdom and be considered as good for consumption. Normally, a loaf takes three days to its expiry date, at most cases if transported from Africa to the United Kingdom; it would take around two days to reach the consumer others would even purchase it on the fourth day or so. As a result such industries are better to be based on the local market where it is easy to produce, transport and reach the consumer on time.
Resources are also a main factor that determines whether an industry will be global or local. Money and the production rate are the main determinants in this. In case an industry wants to be international it should actually be prepaid to cater for all its transportation costs for all its goods to the outside countries (Barreca, 2004). It should also be ready to cater for a higher production rate that will manage to meet the needs of the state it’s located in and the outside markets as well. As a result the small industries are left with no other option other than to be in the class of local industries and do its business locally, while the big companies enjoy the chance to become international.
The government regulations, is also another major factor that contributes to the classification and limits that an industry will be forced to cope with. In case a country has a loan from another country, then at most times, it will be supposed to be economically associated with that certain country to ensure that it manages to pay back the loan on time thus the importations and exportation from the loan holder will be determined by the donor powers (Ilmberger, 2002). At other times, we meet that a certain country does not allow financial interaction with a certain country, it will then be very difficult to get involved in an international market with such country since they will not legally recognize you . In some other instances, we see that some countries limit their citizens from getting involved with international businesses and highly recommend a local business market so as to ensure that its economy is uplifted (Osle, 2010). As a result the government regulations determine whether an industry remains to be a local, international or regional company.
The Customers taste is also a factor that contributes and determines how far an industry can go. In case a company notices that its product is having a negative outcome and making low sales locally, the same product is making an average sales at regional levels, then it would most likely than not decide to concentrate on the market hat is doing better. Thus it will be termed as a regional company and may be with time it may gain its way to the International market depending on how the consumers respond to the product.
In conclusion, I can contend that international trade investment is highly determined by the market size, customer’s choice and taste as well as the resources that an individual company has. The other factors like the nature of the industry are just small factors which can be solved by technological techniques like enhancing a good transportation network of the goods. All the same we can contend that things like the government restrictions should actually not be a reason or a hindrance to the extent hat ones industry would like to take its business. People and nations should be given the freedom to interact and actually relate and socially get involved with other nations. This will actually help to improve the technology and business views as well. New markets can also be recognized and actually improved and created in countries thus improving its economic levels (Arndt, 1997). Globalization has also led to the loss of the African peoples culture and the introduction of the western lifestyle. The dressing code of most people has changes, their religious views, eating habits amongst many other factors. Thus I can assert that, globalization has in a way brought about some negative changes into the world alongside its benefits.