Globalization Questionnaire Paper

Globalization Questionnaire Paper

Globalization can be a scary thing, but if handled correctly could make an organization flourish. Globalization has opened the door for small organization and big organization and allowing them to branch outward to other countries to sell their goods on a global scale. In this paper I will be defining globalization, explaining international trade theories that back up globalization, drivers of globalization and the effects of globalization on communities and organizations.

"Globalization refers to the merging of historically distinct and separate national markets into one huge global marketplace" (Hill, 2009). There are seven different trade theories that all agree that trading internationally is beneficial to the country and also agree that there is lack of government policy. The trade theories are: Mercantilism, Smith (absolute advantage), Ricardo (comparative advantage), Heckscher-Ohlin (factor endowment), Product Life Cycle Theory, New trade Theory and Porters Theory. Here is an example of "absolute advantage: Adam Smith argued that countries differ in their ability to produce goods efficiently" (Hill, 2009). Let's take coffee, Brazil has an absolute advantage over the United States because it has the climate to grow coffee and the United States has to import from Brazil.

There are two major drivers of globalization: one is technology and the second one is the decline in trade and barriers. Examples of technology are: microprocessors, internet (www), which has allowed easier communication around the world, and transportation (planes and cargo ships). Examples of decline in trade and barriers are: WTO (deals with trading with other nations), GATT (created to remove trade barriers for goods and services), and NAFTA (free trade agreement between the US, Mexico and Canada).

Globalizations can have a direct impact on your community and organization. Here are four examples how they can affect your community and organization:

1. Globalization can allow a community to flourish with new business or can do the direct opposite to the community by taking away business because it is cheaper to do business overseas.

2. Globalization allows organizations to do business around the world, which means more revenue for that organization and positive effects on the communities within that country. I work for Zurich and they are based out of Switzerland. I would not have a job with them if they do not do business overseas in the US.

3. Organizations doing business overseas can be impacted by trade restrictions and tariffs.

4. Globalizations can have a positive effect on a community by creating more jobs, goods and services.

These are just some of the ways that globalization can an affect a community and an organization.

Globalization