In a business context, globalization is the process through which trade has become international in its functioning. It is characterized by the cross-border mobility of (in varying degrees) products, capital, and labour. Globalization has been made possible by advances in transportation and information technology and by the reduction in trade barriers such as taxes and tariffs.
One key element of globalization is the increasing dominance of multinational corporations—corporations that carry out operations in several different countries and that are, in some sense, “beyond” having a national identity. Another prevalent feature of globalization is the outsourcing (often to companies in less-developed countries) of production functions that at an earlier time were done within the company orchestrating the production process.
Proponents of globalization point out the economic advantages that come from the free flow of people, products, and money and the resulting expansion of markets. The globalization of markets is seen as a significant source of both wealth creation and the alleviation of extreme poverty.
Critics argue that globalization has resulted in a number of negative effects, and that it has perhaps had a negative impact overall. Critics of freer trade have complained about “stolen” jobs in situations in which corporations have moved manufacturing activities from a more-developed country to a less-developed one. Others have complained that by moving production to less-developed countries, corporations have cynically sought to take advantage of lower regulatory standards (such as standards regarding wages and working conditions). Other critics of globalization worry that the mobility of people and goods has resulted in cultural homogenization, and the spreading of a wasteful Western lifestyle to other countries.
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