Over the last few millennia, the interconnectedness of economies and cultures has increased at an unprecedented speed. Trade and businesses have transcended borders and the world has been transformed into a global village. This is where globalization’s impact is felt most profoundly.

As globalization brings lots of varieties of products and services and there are many efficient players, it makes competition rife in the global markets.

What is meant by Globalization?

Globalization is used to describe how the world has transformed into an interdependent place when it comes to social, economic, and business practices. The term also includes the effects that have resulted due to the process of interconnections and cross-border activities.

Globalization can be compared with a huge spider web where the reach and number of threads have constantly increased over time. Money, people, materials, ideas, jobs, and even diseases and disorders have spread via these threads over the millennia. Globalization has social, cultural, legal, and political effects.

Globalization offers the best advantages to corporations that gain competitive edges over multiple fronts due to the process. Globalization helps in cutting costs by manufacturing and accessing raw materials from a foreign nation. The most influential advantage, however, is that businesses get millions of new consumers when they embrace globalization and spread their businesses to almost all parts of the globe.

Example of Globalization

Example 1

An example of globalization would be a mobile phone of a U.S. brand manufactured in China, resourcing parts from India, and then sold all over the world. The mobile is then used after charging with the energy used from companies of local communities.

Example 2

Another example of globalization would be an automobile manufactured in the US. The car is built using spare parts sourced from countries like China, Sri Lanka, Japan, South Korea, and South Africa. After is built, the car is sold in Europe where the car is driven using oil from Saudi Arabia.

Other examples

Some more examples of globalization are the back offices of big corporations located in countries like India and China, software manufacturing in India for use in computers that are sold worldwide, and Multinational corporations working out of various locations of the world.

Types of Globalization

There are three types of globalization depending on the nature of their creation.

These are the following:

Economic Globalization

In the case of economic globalization, the focus is on the assimilation of international economies and the integration and coordination of financial exchanges. Free trade agreements, such as NAFTA or North American Free Trade Agreement, and Trans-Pacific Partnership are some examples of economic globalization. Multinational companies that operate in two or more countries exert a large influence on economic globalization.

Political Globalization

Political globalization refers to national policies and political affairs to bring the nations on a common platform. The nature of political globalization can be understood from the organizations that control and operate to control governments via common platforms. Organizations, such as NATO and the UN are examples of efforts of political globalization.

Cultural Globalization

Cultural globalization refers to the fact that societies and communities are coming together due to technological advancements. The subjects of cultural globalization include superfast communication technologies, the use of social media, access to hyper-fast transportation, etc. The notable aspect of cultural globalization is that cultures are now converging towards a larger singular culture worldwide that can have inferences from existing cultures and attributes that can be part of any existing culture.

Impact of Globalization

Globalization impacts individuals and communities and changes their nature in a broader sense.

Globalization is an Enhancer of Societal Good and Wellbeing of Individuals

As ideas spread among communities and societies around the world, the ones that offer better alternatives are accepted by societies around the world. In this sense, globalization is an enhancer of societal good and wellbeing of individuals.

Globalization Affects What Individuals Pay and Access Goods

At an individual level, globalization affects the way they pay for and access goods, how their lifestyle changes, how they move around the world, etc. Individuals cannot skip the effects of globalization even if they wish because the effects of globalization occur in a holistic manner.

Globalization encompasses entire societies in terms of change and advancements and hence individuals must adapt to the changes rather than try to escape them.

Globalization Impacts Communities

At the community level, globalization impacts organizations, businesses, and economies profoundly. It affects how people work, what they expect from their employers, how employers respond, etc. At the community level, globalization also impacts how people move from one country and culture to another and how they adapt themselves to new cultures.

Globalization Affects Development Process of Local Cultures

Globalization also affects the process of the development of local cultures within the communities. In other words, globalization changes the communities in a wholesome manner and this change comes with a price in terms of advancements in societies and communities.

Globalization Also Changes Institutions

For example, multinational companies, governments, and educational institutions change due to the impact of globalization. MNCs need to imbibe newer cultures for profitability when they operate in a multicultural environment.

Governments have to create new policies in order to control the changing landscape of legal and professional platforms. They must ensure that their citizens are saved from the new threats globalization brings with it.

Educational organizations, on the other hand, get to teach a plethora of student communities from various nations due to globalization. These institutions can establish new campuses and teach students from various parts of the globe and varying backgrounds.

Factors that enable globalization

There are three main factors that enable globalization which are the following:

  • Rapid change of technology: The quick and effective changes in the technological domain have led to a better platform for organizations from different nations to operate and work in various nations without having to invest too much for the gains. This has helped MNCs to work in various countries leading to a global culture among corporations.

  • Trade Barriers: Trade barriers refer to the restrictions set up by governments in trading platforms to protect local businesses from lagging behind. However, in the last millennia, governments have increasingly resorted to lowering the trade barriers which has led to a global culture among various organizations of the world.

  • Overall liberalization policies: Apart from lowering the trade barriers, governments have also resorted to liberalization policies in other domains. For example, many governments have reduced entry taxes for organizations that want to enter new territory. Such initiatives have led to a proliferation of globalization too.


Globalization has occurred naturally and gradually over time and therefore, there is hardly any escape from it. Globalization has both benefits and disadvantages, and it has its supporters as well as naysayers. However, it is an established fact that globalization has changed the world irreversibly. Corporations, individuals, governments, and institutions that have felt the repercussions understand the true nature of globalization and they try to benefit from the changes too.

However, in order to succeed in a global environment, the quality of products and services offered by entities must be of the highest order. As globalization brings lots of varieties of products and services and there are many efficient players, it makes competition rife in the global markets. That is why globalization is both respected and feared by entities affected by it.


Q1. What is the best effect of globalization?

Ans. The supporters of globalization point to the global eradication of poverty as the best effect of globalization.

Q2. What is the worst effect of globalization?

Ans. The deterioration of the climate and environment due to industrialization, increasing trade, transportation, etc which lead to pollution is considered to be the worst effect of globalization.

Q3. What are the three types of globalization?

Ans. The three types of globalization are economic, political, and cultural globalization.


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