Globalization and its effects on world business Essay

Globalization and its effects on world business - Essay Example Globalization is the world-wide interconnectedness between nations induced by a process where basic socioeconomic arrangements like markets, culture, politics, values and norms become dis-embedded from their spatial context as a result of massification, diffusion and expansion of transnational flows of people, information, products and finances. Globalization poses a problem to American workers as more American firms undertake trading initiatives with low-wage developing countries. Several American firms outsource their production process or lower wages and benefits for their employees. I am in favour of globalization as much of what Americans consume is produced abroad, and an equally large amount of American products are exported. An open integrated world economy provides economies of scale; when different countries specialize in different segments of the production chain, trade enhances the economic output locally and abroad boosting living standards (Parker 346). Competition emanating from economic integration makes the US economy more efficient and productive as global markets give consumers more choices helping to reduce the cost of goods and services. This helps keep inflation in check. According to the Peterson Institute for International Economics, integration of the global economy generates an economic gain of between $500 billion and $1 trillion to the US economy each year (Parker 346). Global economic integration accompanied by rapid technological advancement has had negative effects on some sections of the economy. For some businessmen, these developments have been accompanied by stress and anxiety as new competitors arise and compete for market share.