is a process facilitated by international trade and technology, whichallows the interaction of governments, companies, and people fromdifferent nations. The concept has been used since the twentiethcentury because people have always traded and invested in variousregions all over the world. However, the current form ofglobalization is more enhanced and advancing at a faster rate thanever before. Therefore, globalization has potential benefits such asaccess to large markets, cheap raw materials, and increased inwardinvestment, but it can also result in over-standardization,diseconomies of scale, and economic interdependence.

interconnects markets and producers, which allows them to access moreconsumers. Thus, businesses have larger markets for their productsand economies of scale, which results in lower average manufacturingcosts. Besides, it creates more efficient markets that allow theeconomies to grow. For example, when one economy develops, itstimulates growth in the other countries that are connected to itthrough trade. Hence, the effects of success are felt across theglobe even when they are more profound in one country. Additionally,it facilitates global access to cheaper raw materials. Some items areproduced from various regions in the world at different costs. Thus,businesses have an opportunity to get their raw materials fromregions that offer the best prices and quality, which allows firms tomaintain a cost competitive edge in the local and overseas markets.On the other hand, the lower production costs and increased revenuesgenerate more shareholders’ profits.

Evenso, globalization can lead to over-standardization of goods due toglobal branding strategy. The products can be valued according to thestandards of the best multinational company thus, minimizing productdiversity. Besides, it creates barriers to entry for the smallmanufacturers. Then again, the large multinational firms can sufferdue to diseconomies of scale. Companies that operate different globalbranches encounter difficulties when coordinating all the activitiesof these subsidiaries due to diverse rules and regulations. Moreover,globalization raises the risk of interdependent economies. Countrieshave become interconnected and dependent on each other. Thus, aneconomic downturn in one country can spread to their tradingpartners. For example, the collapse of the housing markets in theUnited States caused a worldwide financial crisis because the globalbanking sector suffered due to reduced value of assets and lendingcapabilities. Consequently, it created a liquidity crisis that causeda severe economic downturn.

Mostcompanies operating on a global scale over-specialize bymanufacturing a limited range of products. Hence, a sudden decreasein world demand for some goods can push an economy into a recession.The problems have been witnessed in developing countries that havesuffered due to over-specialization in tourism and agriculturalproducts. Furthermore, competition pushes some companies out of themarket as major multinational corporations take over to create amonopoly. Likewise, some companies have better technology, access tosuperior, skills, and cheaper workforce, which allow them to produceat lower costs. Thus, some companies will be pushed out of businesseven when they are the lead manufacturers in their local markets.

However,globalization does not generate standardized results because somecountries and people are winners while others suffer. The corporateelites and the developed nations have benefited more fromglobalization. The rules of globalization favor the developedcountries because the trade guidelines are usually developed to suittheir interests. Likewise, the multinational companies mainly move toregions that offer lower production costs thus, they have the powerto control the wages. Accordingly, the income gap between the richand the poor has increased because the wealthy have gained access tomore financially beneficial options as compared to theunderprivileged in the society.

Inconclusion, globalization allows interconnection of people andbusinesses, which is facilitated by trade and technology. It hasresulted in access to large markets and cheaper raw materials thatlower the production costs for most businesses, which increases theshareholder’s profits. Nevertheless, globalization has leads toover-specialization and interdependence of economies that causesadverse effects if the economy of one country fails or demand for oneproduct reduces. has benefited the corporate elitesince they have access to financial opportunities while theunderprivileged continue to suffer due to unemployment andunderemployment.