What Are the Positive Effects of Globalization in Business?

by David Ingram; Updated September 26, 2017
Globalization places world markets at business people's fingertips.

Globalization is a trend that has gained momentum throughout the twentieth century and into the twenty-first. Fueled by advances in communications and transportation technology, globalization represents a gradual melding of business cultures around the world as well as the creation of new marketplaces to facilitate trade between geographically distant peoples.

Natural Advantages

Gaining access to markets around the world allows each country to fully leverage its own unique natural advantages. A natural advantage is an edge that allows countries in specific geographic regions to produce particular products or commodities at a lower cost or higher quality than others. Without international trade, natural advantages do not add much to the economy. For example, it wouldn't matter much to Saudi Arabia that the country sits on vast oil resources if it did not have the ability to sell and ship the oil around the world. It is the access to global trade that allows nations to accumulate wealth from all around the globe.

Trade Opportunities

The globalization of business processes and etiquette opens up new opportunities for importing and exporting products and services. A strong driver of globalization, for example, is the English language as an international business language. Using English, a businessman from Scotland can communicate clearly with a partner in China, who can communicate with a client in Africa and so on. The gradual melding of business etiquette helps to facilitate business communication as well. Issues, such as handshakes, speaking distance, body language and taboo topics of conversations, are beginning to lose their power as potential deal breakers as business people around the world study and understand each other's cultural norms.

Procurement and Outsourcing

The opening up of global markets and improvements in intercultural communication creates a wealth of opportunities to source high-quality, low-cost materials and labor. Outsourcing is when less expensive, foreign labor is used for activities traditionally performed at home. In some countries, such as the United States, outsourcing is seen as a growing evil. In others, such as India, outsourcing brings unparalleled economic prosperity to the people. Developed nations often fail to realize that for every individual that loses a job to outsourcing, another individual -- usually in a more economically depressed situation -- gains a job.

Economic Development

Globalization provides new opportunities to underdeveloped nations by allowing them access to new markets around the world. China and India have ridden the wave of globalization throughout the twentieth century and into the twenty-first, for example, and are rapidly becoming economic powerhouses. Even tribal groups in nations, like Brazil and Africa, can ride the wave of globalization, selling locally-made products around the world via the Internet to raise their standard of living.

About the Author

David Ingram has written for multiple publications since 2009, including "The Houston Chronicle" and online at Business.com. As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. He has earned a Bachelor of Arts in management from Walsh University.

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