Introduction

Going by the conventional definition Globalization is the process by which businesses or other
organizations develop international influence or start operating on an international scale. It
represents the integration of international trade, investment, information technology and cultures.
Talking in a most general and layman terminology globalization has made this world a smaller and a
more inclusive place. With a plethora of exchanges in terms of culture, ideas, language, lifestyle we
can say that we are no more the citizens of only the country we live in but that of the world as well.
We can also put globalization as more of a social and cultural phenomenon. Socially globalization
represents greater interconnectedness among global populations and in cultural terms globalization
represents the exchange of ideas and values amongst various cultures, and even a trend towards the
development of a single world culture. Apart from its globalization has a lot of political implications
too as it has shifted the political activities of a country to a global level through the involvement of
intergovernmental organisations such as United Nations, World Bank, International Monetary Fund
and etc. With regard to law as well globalization has impacted the legal systems of many nations as
many countries now frame laws keeping in mind the ramifications those laws can bear on an
international level. Globalization today has deeply impacted the lives of all the people in this world
but obviously it was not always the same and that’s what we would be further discussing in this
write up how that how did the globalization impacted the all our lives and what are the advantages
and disadvantages associated with it.

History of Globalization
Globalization is an historical process that began with the first movement of people out of Africa into
other parts of the world. Traveling short or long distances, migrants, merchants and others have
delivered their ideas, customs and products to new lands. The melding, borrowing and adaptation of
outside influences are found in many areas of human life. Though some historians have argued that
tracing the roots of globalization from far back in pre-historic era renders the whole concept useless
and inoperative for political analysis. German- American historian and sociologist Ander Gunder
Frank argued that that globalization has been in existence since the rise of trade link
between Sumer and the Indus Valley Civilization in the third millennium BC. Another American
Journalist and three-time Pulitzer prize winner writer Thomas L Friedman have compartmentalized
the history of globalization into three periods Globalization 1.0 (1492–1800), Globalization 2.0
(1800–2000) and Globalization 3.0 (2000–present). According to him Globalization 1.0 involved the
globalization of countries, Globalization 2.0 involved the globalization of companies and
Globalization 3.0 involves the globalization of individuals. In this particular article we’ll be dividing
the entire process of globalization into three periods and they are Archaic Globalization, Early-
Modern period of globalization and Modern Globalization.

Archaic Globalization
This form of globalized economics and culture existed during the Hellenistic Age when most
commercial urban centres were focussed around the axis of Greek Culture that ranged from India to
Spain with cities such as Alexandria, Athens, Antioch at its centre. This was the period when for the
first time the idea of cosmopolitan culture (from Greek word “Cosmopolis” meaning “world city”)
emerged. Apart from it there were many scholars who also studied the early from of globalization in
trade links between the Roman Empire, the Parthian Empire, and the Han Dynasty. The commercial
links between these powers led to the development of the Silk Road, which started in western China,
continued through the boundaries of the Parthian Empire towards Rome.

The Islamic Golden Age is also a significant stage of early globalization with the Muslim and Jewish
traders and explorers creating a sustained economy across the Old world that led to the widespread
exchange of crops, trade, knowledge (for e.g. The modern numeric system that we use today is an
outcome of the exchange of knowledge between the Indians and the Arabs) and technology.

Then came the advent of the Mongol Empire which even though destabilized most of the
commercial centres of the middle east and China Greatly facilitated the travel through the silk road.
This later on greatly facilitated the travellers and missionaries such as Marco Polo to Journey
successfully from one end of the Eurasia to the other. The Mongolian epoch of the thirteenth
century had several other notable globalizing effects as well for e.g. it witnessed the creation of first
international postal service, as well the rapid transmission of epidemic diseases such as Bubonic
Plague across the newly unified central Asia.

Early Modern Period Of globalization

This period witnessed the rise of maritime European empires in the 17 thcentury with Portuguese and
Spanish Empires first followed by Dutch and British Empires. In this period the globalization became
very much a private business phenomenon with establishment-chartered companies like British East
India Company (founded in 1600 often described as the first multinational corporation) and Dutch
East India company (founded in 1602).

The Age of Discovery also brought in significant cultural, material and biological exchange with the
New world. It began in the 15th century when the two kingdoms of Portugal Castile sent exploratory
voyages to the Cape of Good Hope and to the Americas (discovered in 1942 by Christopher
Columbus). Towards the end of the 15 th century the Portuguese started establishing trading posts
from the Africa to Asia and Brazil, to deal with the trade of local goods like slaves, spices and timber,
commencing an international business centre under a royal monopoly, the House of India.

Further the European colonization of the Americas and the Africa further proved to be cornerstone
in the process of globalization with the enormous widespread exchange of plants, animals, human
population(slaves), communicable diseases, culture between the eastern and the western
hemispheres. This exchange was one of the most significant global events concerning ecology,
agriculture and the culture in the history of mankind.

Modern Globalization
Globalization started approaching its modern form towards 19 th century when industrialization
allowed cheap production of the household items while at the same time a rapidly increasing
population created a sustained demand for commodities. Besides win in the First and Second Opium
wars and British conquest of India left a highly populated regions of China and India became ready
consumers of the European exports. It was in this period when the Sub Saharan Africa and pacific
islands became part of the new world system and their conquest by the Europeans left valuable
resources of these regions like rubber, diamond, coal at their disposal which further helped fuel
trade and investment between European imperial powers, their colonies and the United States.
Post-World War II
Globalization, since World War II, is partly the result of planning by politicians to break down
borders hampering trade. Their work led to the Bretton Woods conference, an agreement by the
world's leading politicians to lay down the framework for international commerce and finance,
and the founding of several international institutions intended to oversee the processes of
globalization. Globalization was also driven by the global expansion of multinational
corporations based in the United States and Europe, and worldwide exchange of new
developments in science, technology and products, with most significant inventions of this time
having their origins in the Western world according to Encyclopaedia Britannica. Worldwide
export of western culture went through the new mass media: film, radio and television and
recorded music. Development and growth of
international transport and telecommunication played a decisive role in modern globalization.
These institutions include the International Bank for Reconstruction and Development (the World
Bank), and the International Monetary Fund. Globalization has been facilitated by advances in
technology which have reduced the costs of trade, and trade negotiation rounds, originally under
the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of
agreements to remove restrictions on free trade.
In late 2000s, much of the industrialized world entered into a deep recession. Some analysts say
the world is going through a period of deglobalization after years of increasing economic
integration. China has recently become the world's largest exporter surpassing Germany.

Factors affecting Globalization

 Technological Developments
Technological developments in the field of transportation along with the introduction of modern
and efficient modes of communication like the Internet has proved to be huge contributing factor in
enabling global trade. Modern transportation techniques such as containerisation, bulk shipping
have played an immense role in bringing down the costs of transportation . The lower unit cost of
shipping products around the global economy helps to bring prices in the country of manufacture
closer to those in export markets thereby making markets more contestable globally.

 Differences in Tax system

The desire of businesses to reap the benefits of lower labour unit cost has and many other
conducive production factors abroad has encouraged many countries to adjust their taxation policies
in a manner so as to attract more Foreign Direct Investments this involves reduction in state
imposed duties and tariffs and giving tax subsidies. Many countries today have signed free trade
agreements with each other that allows them to trade more freely with each other without having
any tariffs or quotas being imposed on their imports.

 Less protectionism
Old forms of non-tariff protection such as import licensing and foreign exchange controls have
gradually been dismantled. Borders have opened and average import tariff levels have fallen.

That said, it is worth knowing that, in the last few years, there has been a rise in non-tariff barriers
such as import quotas as countries have struggled to achieve real economic growth and as a
response to persistent trade and current account deficits.
  Growth Strategies of Transnational and Multinational companies
The Transnational and Multinational companies are those companies that have their base in one
country but have multiple branches within and outside that country for e.g. McDonalds is an
American multinational company with multiple outlets throughout the world.

In their pursuit of revenue and profit growth, increasingly global businesses the brands have
invested significantly in expanding internationally. This is particularly the case for businesses owning
brands that have proved they have the potential to be successfully globally, particularly in faster-
growing economies fuelled by growing numbers of middle-class consumers.

 Cultural Factors
Since the rise of globalization people with different cultural values are able to interact which has
resulted in people from different parts of the world sharing a unified set of cultural and social values.
This idea has been described as “cultural melting-pot”. These cultural factors can include anything
from language and sports, to movies and food. Globalization has led to an increase in tourism which
helped in keeping many cultures alive. An example of this is that many people visit Myanmar and
Thailand each year to see Kaya women tourists buy souvenirs from the local shops and pay to see
these Kayan women wearing brass rings around their neck which results in a striking appearance of a
long neck. This tourism helps in supporting the local economy and also plays a very important role in
keeping their culture alive.

Effects of Globalization

POSITIVE EFFECTS
 Global market.
Most successful emerging markets in developed countries are a result of privatization of state-
owned industries. In order for these industries to increase consumer demand many of them are
attempting to expand and extend their value chain to an international level. The impact of
globalization on business management is seen by the sudden increase of number of transactions
across the borders. In protecting yields and maintaining competitiveness, businesses are continuing
to develop a wide range of their footprint as it lowers cost and enjoys economies of scale (Shah
A.,2009)

Multinational corporations are a result of globalization. They occupy a central role within the process
of globalization as evidenced through global foreign direct investment inflows. Their concentrations
within Europe in western economies has led to size constraints, therefore there is a need for new
geographical areas to operate whereby they will face a lot of competition in the market. Through
this they will enlarge their market and enjoy economies of scale as globalization facilitates time
space compression, economies compete at all levels including that of attracting investors (Smith V.A
and Omar M.,2005).

 Cross-cultural management
Globalization tend to be the realm of elite because in many parts of the world they
are the only people who are affluent enough to buy many of the products available
in the global marketplace. Highly educated and wealthy people from different
backgrounds interact within a westernized milieu. Western styles, since are symbols
of affluence and power, the elite often embraces western styles of products and
pattern of behavior in order to impress others. Today Western culture and patterns
of behavior and language are staples of international business (Asgary N. and Walle
A.H.,2002).

United states seems to have powerful impact upon many other countries and
societies. The world today has a popular cultural force. The popular consumer culture
of the economically dominant West is relentlessly and inevitably transforming other
regions, cultures, nations and societies. In addition, such perspective imply that
technological change, mass media, and consumer oriented marketing campaigns
work in tandem to remake whatever they touch in their own image. Even attitudes
and ideas about society, religion and technology are transformed by cultural
diffusion brought by globalization. Example, in America McDonalds represent fast,
cheap and convenient food while it is not the same worldwide. It’s of high price in
other countries like China and Russia where it involves cultural experience (Walle A.H,
2002)

 Foreign trade
Globalization has created and expanded foreign trade in the world. Things that were
only found in developed countries can now be found in other countries across the
world. People can now get whatever they want and from any country. Through this
developed countries can export their goods to other countries. Countries do business
through international trade, whereby they import and export goods across the
global. These countries which export goods get comparative advantages.
Organizations have been established with a view to control and regulate the trade
activities of the countries in the world so to have fair trade. World trade
organizations emerged as a powerful international organization capable effectively
influencing individual governments to follow international trade rules, copyrights,
policies on subsidies, taxes and tariffs. Nations can not break rules without facing
economic consequences (Piaseck R. and Wolnicki M., 2004) .

The number of nations that are dependent on trade, foreign capital, and the world
financial markets increased greatly. Countries engaged in foreign trade enjoy
comparative advantage. The post Recardian trade theories predicted that
specialization in labor and capital intensive goods would bridge enormous wage
gaps between the poor and the rich countries, that is the developing and developed
countries, sparing the latter from massive labor immigration (Gerber J., 2002).

 Resource Imperative
Developed countries need natural and human resources of the developing countries
while developing countries need capital, technology and brainpower of the wealthier
countries. Developed countries’ economies are increasingly dependent on the natural
and human resources of the developing nations. Growing interdependence of
nations and their activities on one another fostered by the depletion of natural
resources; as well as overpopulation (Harris P.R.,2002).

 Foreign investment
One of the most visible positive effects of globalization in India is the flow of foreign
capital. A lot of companies have directly invested in India, by starting production
units in India, but what we also need to see is the amount of Foreign Investment
Inflow that flows into the developing countries. Indian companies which have been
performing well, both in India and off the shores, will attract a lot of foreign
investment, and thus pushes up the reserve of foreign exchange available in India.
This is also one of the positive effects of globalization in US and other developed
countries as developing countries give them a good investment proposition.

Managers’ objectives might not be the same with those of stockholders in some
situations. The more complex the corporation the more difficult it is for shareholders
to monitor management’s actions whereby it provides the managers more freedom
to act in their own self interest at the expense of shareholders. Multinational firms
are more complex than national firms. Managers might favor international
diversification because it reduces firm specific risk or adds to their prestige. These
goals might be of little interest to shareholders. This divergence of interests between
shareholders and managers, might reduce the value of multinationals relative to
domestic firms (Saudagaran S.M.,2002)

 Competition
One of the most visible positive effects of globalization is the improved quality of
products due to globe competition. Customer service and the ‘customer is the king’
approaches to production have led to improved quality of products and services. As
the domestic companies have to fight out foreign competition, they are compelled to
raise their standards and customer satisfaction levels in order to survive in the
market. Besides, when a global brand enters a new country, it comes in riding on
some goodwill, which it has to live up to. This creates competition in the market and
a survival of the fittest situation.

 Culture
The positive effects of globalization on culture are many! Not all good practices were
born in one civilization. The world that we live in today is a result of several cultures
coming together. People of one culture, if receptive, tend to see the flaws in their
culture and pick up the culture which is more correct or in tune with the times.
Societies have become larger as they have welcomed people of other civilizations
and backgrounds and created a whole new culture of their own. Cooking styles,
languages and customs have spread all due to globalization. The same can be said
about movies, musical styles and other art forms. They too have moved from one
country to another, leaving an impression on a culture which has adopted them.

 Legal Effects
Increased media coverage draws the attention of the world to human rights
violations. This leads to improvement in human rights. Global economic growth does
not necessarily make people happier, worldwide free trade, should also benefit
humanity as well as protect nature, not just reward managers and stockholders.
Those who would be authentic leaders need to address inequalities. Globalization
should promote openness and information along with exchange with greater
democracy and prosperity (Harris P.R., 2002).

Gone are the days where the limited jurisdiction became a hindrance in the
prosecution of criminals. These days due to international courts of justice, these
criminals can no longer seek asylum in a foreign country, but will be brought forward
and there will be justice. Due to globalization, there is also an understanding
between the security agencies and the police of two or more different countries who
will come together to curbglobal terrorism. Hence, it is now possible to catch the
perpetrators of crime irrespective of which country they choose to hide in. This is
undoubtedly one of the greatest positive effects of globalization on society.

NEGATIVE EFFECTS
Globalization also have its side effects to the developed nations. These include some
factors which are jobs insecurity, fluctuation in prices, terrorism, fluctuation in
currency, capital flows and so on.

 JOBS INSECURITY.
In developed countries people have jobs insecurity. People are losing their jobs.
Developed nations have outsourced manufacturing and white collar jobs. That means
less jobs for their people. This is because the manufacturing work is outsourced to
countries where the costs of manufacturing goods and wages are lower than in their
countries. They have outsourced to developing countries like China and India. Most
people like accountants, programmers, editors and scientists have lost jobs due to
outsourcing to cheaper locations like India.

Globalization has led to exploitation of labor. Safety standards are ignored to

produce cheap goods. “In practice, however, the recent experience in Latin America
has been that many such open-handed multinationals moved their operations to, for
example, China or South East Asia because of cost and market
considerations”(Piasecki R. and Wolnicki M., 2004).
  FLUCTUATION IN PRICES.
Globalization has led to fluctuation in price. Due to increase in competition,
developed countries are forced to lower down their prices for their products, this is
because other countries like China produce goods at a lower cost that makes goods
to be cheaper than the ones produced in developed countries. So, in order for the
developed countries to maintain their customers they are forced to reduce prices of
their goods. This is a disadvantage to them because it reduces the ability to sustain
social welfare in their countries.