Globalization is the shift towards a more integrated and inter-dependent world economy (Hill, 2009). Due to falling barriers to cross-border trade and investment companies are able to move goods, services, and investments faster and more consistent to consumers located in many parts of the world.
International Trade Theories
Some of the traditional international theories that support the concept of globalization are the Absolute Advantage Theory and the Comparative Theory. The Absolute Advantage Theory was created by Adam Smith in 1776 (Hill, 2009) and stated that a country that produces a product efficiently has an absolute advantage over other countries and should ...view middle of the document...
Companies operating globally are able to send and receive data information in a timely manner. Reaching customers globally by telephone is no longer expensive. Through the World Wide Web, consumers are buying products/services (clothes, shoes, groceries, car) from the internet. Based on the advances of transportation technology, the consumers are getting their product as early as the next day because of the efficiency and competitive prices of the fleet companies (Fedex, UPS, DHL, etc.).
Effects of Globalization
Globalization has both positive and negative effect on a community and its workers.
The positive effect of globalization has made the Coca-Cola Company successful in an unstable market. Operating globally has made the company weathered the unstable volatile market and continues to make huge profits. However, to cut operating costs but continuing to get the technical skills needed, the company has outsourced the human resources department to China and outsourced the accounts payable department to India at a lower cost. Outsourcing jobs to China and India helped the increase the...