Since late 19th century, the term globalization has emerged as one of the widely debated ideological and academic term (Osterhammel et al, 2005). It is a process that creates a platform via which the people all over the world are integrated into a unit and closely relate in their functions making them operate as a unit (Rief IB 2004). According to Rief, globalization involves integration of global economic, technological, social cultural and political affairs making then to function like a unit. Ideally, many tends to generalize globalization as to refer to economic globalization which involves incorporation of the national economies into the global village via international trade, foreign direct investment, unification of world capital markets, migration and technological transfers from one country to another (Nilüfer, 2004).
According to the united nation ESCWA (2001), economic globalization is the process that involves lessening and abolition of barriers between world’s country so as to favor smooth flow of goods and services, capital labor and other factors of production. Indeed, economic globalization has opened up the world markets for free flow of good and services thus enabling worldwide producers to produce more (Stiglitz & Joseph, 2006). However, globalization has often been criticized as having negativities especially to the economically inferior countries i.e. developing and less developed countries. According to Dash and Robert (1998), globalization is purely a capitalistic idea. However, they agree that globalization is a leeway to increase cross boarder economic socio-cultural and technological exchange. Over the last one decade for instance, trade globalization especially in production and marketing has greatly accelerated (Steger & Manfred, 2002). This paper therefore tries to identify the major factor that could have led to massive increase in trade globalization; production and marketing in particular.
The drivers of production and marketing globalization
A number of factors can be suspected to having played a hand in the massive increase in trade globalization. These includes,
Markets around the world are consistently becoming more competitive every other day (Rief IB, 2004). As competition soars, players in the business arena can never continue relying on the local market. In fact, the local markets are now hardly sufficient to service the huge supply of commodities following massive increase in the business players. As a result, a need for alternative markets and market diversification to offset the risk presented by the soaring competition has arisen; hence producers and marketers are continuously seeking opportunities in international markets perhaps to diverge away from the local competitive markets to seek international markets with less competition and more opportunities for their business growth (Smith and Charles, 2007). According to Rief (2004) the ever growing competition not only limits the profitability of local organizations but also their opportunity to grow. To shrug off this adverse effect of competition, the pro-globalization view diversification into the global market as a very viable strategy. Furthermore, international markets have the potential to create additional demand for local goods and services thus lessening locally entrenched rivalry among firms.
Increased international trade and direct foreign investment that has resulted from enhanced international relations have played a significant role in further increasing business competitiveness (White paper series, 2008). As such, this competition has aroused great need of further globalization as producers seek diversifying markets to offset competition and increase productivity. The endangered local organizations have tended to seek international markets for their products and services. Competition that has resulted from evident liberalization of markets has been a key accelerator of production and marketing globalization in the past few years (Steger & Manfred, 2002).
In order for a firm to emerge competitively and survive in the global market place, it becomes imperative that it make use of ‘globalized’ management strategies. This will require international marketing research; gathering marketing intelligence from a global perspective and use of globally accepted production technologies so that the products and services can be of competitive quality in the global market place (Nilüfer, 2004). Moreover, organizations extend their production and marketing operations as a portfolio diversification strategy as well as seek market dominance in those destinations (Dash & Robert, 1998). Apart from market scarcity; increased competition for typically scarce factors of productions that are barely enough to meet local production needs has fueled globalization to large extent (Rief, 2004). According to the latter, Producers have realized that globalization will allow for resources interchange or transfer from one country to another. Such resources include labor, capital and managerial skills.
Technology and globalization are inextricable (Stiglitz, & Joseph, 2006). In fact, it is the major factor that has facilitated the realization of internationalization goals. According to Osterhammel et al (2005), technology is the engine and a major enabler behind globalization. Technological development particularly computerization and the internet have played an unmatched role in enhancing globalization (Murray, 2006). With the internet for instance, the world has become so networked that it is possible for producers and marketers to obtain information from any part of the world in a click of a button (Nilüfer, 2004). According to the latter, internet and computerization has virtually turned the world in to a global village, where people across all countries can converge and share information freely and efficiently. With the right technology at their disposal, marketers and manufacturers across the world to can now establish viable networks that in the best way favors communication and cooperation among business players, enhanced business transactions and allow individuals to share business experiences and ideas online from all over the globe.
Today the evident advancement in technology has clearly supported globalization more than any other factor. According to Chesbrough and Henry (2006) a major facilitator of globalization is the development of global information and communication systems. According to the latter, the emergence of e commerce has actually transformed business communication and procedures across the world making trade extremely efficient irrespective of the distances.
The global expansiveness is no longer a hindrance to commerce. In addition, marketer and manufacturers have realized that accessibility to the diverse knowledge and marketing intelligence that technology has made very efficient as independent and strategic way to be innovative, achieve marketing and production efficiency as well as acquires competitive advantage over others. In addition the wide use of technology in to support and enhance organizational research and development has led to increased globalization particularly in production and marketing (Rief, 2004). With the ever increasing competition, research and development in product development and market research has become part of day to day business operations and a requirement for survival, as organizations try to position their brands in the global market place (André, 1999). To achieve this, technology has been and still is crucial. It is this interaction with technology therefore which has presumably speeded the rate of internationalization especially in the 21st century.
The changes in the social cultural trends have also favored the prevalence and increase of globalization, especially from the latter years of the 20th century to and until today (Murray, 2006). For instance, most of social barriers that previously been impeding globalization have to a greater extent been done away with (Barbara & Christopher, 2008). Although the war of abolishing these stumbling blocks has not been completely won, the developments so far have favored globalization. Factors such as racism, religion, the social class systems, and use of educations levels as source of discriminating others are almost diminishing creating a favorable environment for interpersonal relationships and cooperation among people from across the world (Stiglitz, & Joseph, 2006). Individuals can now cooperate, discuss matters affecting them and associate for a common purpose irrespective of difference in social background that may tend to exist among them. For instance, it is possible for individuals from different races to join hands to achieve common business goals, participate in a common social event such as sport, and even marry.
Similarly, Christians and Muslims can now cooperate unlike in the past where such a difference in religion was a barrier to relationships. Interestingly enough, it is now possible for people with varying socio-cultural backgrounds to relate through established social networks, trade, and cooperate in social matters. Barriers to consumptions across social cultural lines have been minimized thus it is easier for goods and services to find demand in the international markets from all over the world, irrespective of the source or country of origin. Also, marketers find it easier to carry out marketing survey in any part of the world when this kind of cultural environment prevails. Furthermore, it is possible for marketing campaigns to succeed therein as well as allow producers to set up operations in any part of the globe with equal opportunities to compete for business success (Scherer, 2007). In addition, enhanced cultural relation that has been enhanced by increased barrier-free participation in social events such as sports and international tourism has been major enabler of production and marketing globalization (Scherer, 2007). Furthermore, worldwide associations via international social forums such as the world social forum (WFS) have been particularly very instrumental to the process of production and marketing globalization (Murray, 2006).
Increased political integration and liberalization of trade
The increased political integration evidenced by establishment of regional and international trading blocks such as the world trade organization, preferential trade area, the European union among others have accelerated the process of trade globalization (André, 1999). This is due to the removal of protectionism in international trade and massive liberalization of trade that comes with its trading blocks are established by cooperation of governments of various countries with an objective of promoting trade relations and lessening or total abolition of cross -boarder trade restrictions (Smith & Charles, 2007). This leads to trade liberalization and free flow of good and services across countries that form the bloc. As a result of this liberalization, cross boarder trade and foreign direct investments have been enhanced (Murray, 2006). Consequently, globalization of production and marketing operations has greatly increased. Firms have significantly increased their production and marketing operations in the international market platform following liberalization of trade between countries and creation of free trade areas, a breed of massive political integration and enhanced international relations in economics and commerce affairs (Smith & Charles, 2007). Similarly, this has massively increased trade globalization.
Personal effects of globalization process
The process of globalization has had both positive and negative effects (Smith & Charles, 2007). First, it impacts greatly on the individual lifestyles. Globalization has made the world actually small place than it was previously. As a result, interaction with individual from allover the globe has been made possible. It is possible for an individual to access the diverse lifestyles hence individuals personal lifestyles have been influenced as individuals tend to imitate the international lifestyles that they admire. As a result, of globalization production and marketing operations individuals are presented with variety of products and services thus presenting an individual with a wide range of products to choose from. Consequently, products of very high quality can be obtained from the market at affordable prices due to increased competition, and enhanced research and development by both local and international organizations. Also availability of international products tends to influence an individual’s consumption patterns as they tend to be attracted to the latter. In addition, globalization has presented the cultural diversity represented by different culture across the world. As a result, such culture tends to infiltrate into individuals whose local culture ends up being influenced either positively or negatively as some of the cultures are appropriate while others are not (Nilüfer, 2004).
I am no exception as far as this influence is concerned. As a result of globalization, my lifestyles such as consumption habits, entertainment, dressing styles and way of doing business has been influenced by the cultural diversity presented by globalization. In addition, it has been made easier for me to study since computerization and internet provides me with reach sources of knowledge that aids my studies in the very best way.
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