University of Phoenix
MGT 448/ Global Business Strategies
Clifford M. Lavin
August 1, 2009
In this paper, the writer will be discussing the meaning of globalization, some of the traditional international trade theories that support the concept of globalization. The writer will also be talking about some of the major drivers of globalization and some examples. At the end of this paper, the writer will discuss at least four effects of globalization that affect the community and the organization where he lives and works respectively.
“Globalization is the shift to a more integrated and independent world economy” (Hill, 2004). From the writer’s prospective, globalization is the process of worldwide trade intended to increase capital and economic gain for all countries that partake, while increasing global citizenship. Globalization has both positive and negative effects. From a positive perspective, businesses are able to leverage their own economic strength by leveraging the strength of other businesses on a global level. There are those that have experienced a negative effect on jobs in some industries.
Some of the traditional theories that support the concept of globalization include Mercantilism, Adam Smith’s theory, Free Trade, and Comparative Advantage (Hill, 2004).
Mercantilism advocated that countries should harmoniously encourage exports and discourage imports. Free Trade refers to the absence of government influence through quotas or duties and allows things to happen through natural influence. Comparative advantage is define as productivity differences where two countries producing the same products could still benefit if the agreement is that both countries focus on the product with the highest yield from the respective country.
In international trade, there is no one theory that can alone describe the pattern. All traditional international trade theories along with contemporary ones...