It is the process of transformation of some things into global ones. It may be described as ‘a process by which the world population is unified into a single society and functioning together’.

However, globalization, as a popular term, is generally used to refer to economic globalization. It is the integration of all the national economies into a single international economy through the activities like FDI, capital flows, trade and commerce, migration, and spread of knowledge & technology. The pace of Globalization will continue to have an impact on business.

Globalization can affect the nations and people in several different ways such as:

  1. Industrial effect - emergence of global production and consumer markets.
  2. Financial effect - emergence of global financial markets and better access to external financing for corporate, national and multinational borrowers.
  3. Economic impact - realization of a worldwide common market.
  4. Political impact – it is the creation of a global government which regulates the relationships among nations and guarantees the rights for all. Because of its strong and wealthy economy, USA has enjoyed a position of power among the world powers. With the influence of Globalization, countries like China, Brazil, and India have experienced some tremendous growth in the past decades. If these countries continue to grow at the present rate, then it is very likely that in the next couple of decades, these nations will have enough wealth & industry, and power to rival USA for the world power position.
  5. Informational effect - increase in information flows between the continents.
  6. Cultural impact - growth of cross-cultural contacts and cultural diffusion.
  7. Ecological impact - the environmental challenges such as climate change can not be solved without international participation and cooperation.