There are lots of different definitions for globalization and it should not be viewed purely from the economic and business perspective but considered from political, economic and socio-ideological perspectives. The recent financial crisis commenced in the United States and reverberated to the entire global economy due to globalization. Without the interconnection and interdependence between different nations, the negative impacts arising from financial crisis in one country will not be spread across the globe. The strong cohesion between global markets means that a crisis in any part of the planet to have immediate influence the economy of any country, first by the financial side and then part of the real economy of all individuals within it (Ghosh, 2001, 172-180).
The global financial crisis affected various countries adversely; a majority of the countries were unable to finance both their recurrent and capital expenditures because of the crisis. However, globalization opened the global markets to trade. Countries have the opportunity to specialize in the production of the goods where they have a comparative advantage and trade them for the goods they have comparative disadvantage. Thus, globalization has created opportunities for the developed and more innovative countries. The commencement of the financial crisis aggravated this situation. The majority of the developing countries are highly dependent on the developed nations; thus, the financial turmoil in these countries adversely hurt the developing nations.
However, globalization is a reality in the 21st century and is an inevitable phenomenon. Despite the drawbacks of globalization in the context of financial crisis, it brings a lot of opportunities to both the companies and the workforce. The companies can have access to lower cost of production, cheaper labor and the market in other nations. They can also develop competitive edge through economies of scale and economies of scope. The companies...