Globalization is not a new phenomenon. In recent decades the process of
globalization has accelerated; this is due to a variety of factors, but
important ones include improved trade, increased labor and capital mobility and
improved technology. Main reasons that have caused globalization are-
1) Increased in and
application of technology
The development of communication such as internet, email and mobile
phones, plays vital role to the growth of globalization because they help MNCs
to operate throughout the world. Also there has been a rapid growth in transportation
enabling greater movement of people and goods across the globe. The advancement
in communication and transportation is also a major factor in increase in and
expansion in technology.
2) Liberalization of
cross-border trade and resource movements
Global trading block(EU, NAFTA, ASEAN) and
institutions(WTO,IMF)liberalized cross border trade. MNCs and rich capitalist countries
have always promoted global free trade as a way of increasing their own wealth
and influence.
3) Development of services
that support international business
Countries have now developed a variety of services that facilitate
conduct of international business. Some are: Bank credit agreements, insurance
that covers risks such as damages, services of UPS or DHL.
4) Growth of consumer
pressures
Consumer now a days are more aware about the products and services that
are available within and outside their domestic territory. Today consumers want
new and better products that are finely differentiated.
5) Increased global
competition
The pressures both present and potential of increased foreign
competition can persuade companies to buy or sell abroad.
6) Changing political
situation
Now a days Government is supporting programs favorable to international
trade. They are now providing an array of services to help domestic companies
sell abroad and vice versa.
7) Expansion of
cross-national cooperation
Cross
national cooperation increased by means of treaties, agreements and
consultation
