What is GLOBALIZATION?

Globalization means several things to several people. For some it is a new paradigm-a set of fresh and new beliefs, working methods and economic, political and sociocultural realities in which the previous assumptions are no longer valid. For developing countries, it means integration with the world economy.

                In simple economic terms, globalization refers to the process of integration of the world into one huge market. Such unification calls for the removal of all trade barriers among countries. Even political and geographical barriers become irrelevant.

                At the company level, globalization means two things:

(a)    The company commits itself heavily with several manufacturing locations around the world and offers products in several diversified industries and

(b)   It also means the ability to compete in domestic markets with foreign competitors. In the popular sense, globalization refers mainly to mulch-plant operations.

MNC (Multi-National Company)— A company which has gone global is called MNC or TNC (Trans-National Company). Thus MNC operates in more than one country and gains through Research and Development (R&D) which leads to substantial production, marketing and financial advantages in its costs and reputation that are not available to purely domestic competitors. The global company sees the world as one market. They do not consider much importance of national boundaries. They raises capital and markets wherever it thinks it can do the job best.

                To be specific, a global company has three important characteristics which are as follows:--

1.       It is a conglomerate of multiple units located in different parts of the globe but all linked by common ownership.

2.       Multiple units draw on a common pool of resources such as money, credit, information, patents,trade names and control systems.

3.       The units respond to some common strategy.

Examples of some MNCs