Globalization involves of interaction among
the people, companies, and government of different nations for international
trade, investment and aided by information technology. Globalization also
involves transfer of policies, culture, power, trade and market all around the
world. Globalization is not new, it has been started from thousands of years
ago where people use to buy and sell their things either from great distances
like as Silk Road across Central Asia that connected China and Europe.
Current wave of globalization is
similar to those prevailing before the First World War broke out in 1914.The
policies and technological developments of past few decades have changed and
increased in cross-border trade, investment and migration. So, some observers
believe that world has entered in a new phase of economic development. Many
governments have adopted free-market economic systems, vastly increased their
own production potential and creating new opportunities for international trade
and investment. Government has also reduced the barriers to commerce and have
established international agreements in foreign markets. A defining feature of
globalization is an international industrial and financial business structure.
Advancement in information
technology have dramatically transformed economic life. Valuable new tools of
technology have identified the purchasing economic opportunities, includes easy
transfer of assets and collaboration with partners. To find the right balance
between benefits and costs of globalizations people need to know the policies
of globalization and its impacts on economy.
Globalization shrinks the whole
world and shorter the distance to interact one person on one side to the other.
Global trade is having a radical impact on employment relations, trade and
investment in the whole globe. Globalization can affect both negatively and
positively on employment, labor, investment, market and trade. A global market
is the network that links the labor, production and such networks link all the
workers with in the world economy. A big positive effect of globalization in
informal economy is that it provides job opportunities in the market.
Globalization although has increased trade liberation in the world economy. Globalization
result economic growth and industrialization and expanding in both developed
and developing countries. Globalization has caused a huge
change in market and trade for different investors.
There are three basic elements of
globalization for an economy. (Khan, A. R. 1998).
First, is the increase in the flow of
goods nationally because of reduction in tariffs.
Secondly, there is an increased in the
mobility of assets due to low tariffs.
Third, is the consistency in technology
which have increased he international trade flow.
Globalization also increase the
growth, distribution of income, reduce poverty according to the standard theory
of trade. Globalization integration leads to resource allocation with
competitive advantage with greater efficiency and higher output. (Khan, A. R.
1998). Globalization is an unavoidable process because it has it has connected
all the markets at a single point. Global market is a complex and a rich
connectivity (Mattsson, L. G. 2003). Globalization and distribution of goods
and services are linked because all the flow of goods and information have to
be coordinated across the borders.
Main types off linkage between globalization
and distribution are as followed: (Mattsson, L. G. 2003).
Firstly, distribution specialists
globalize, middleman like whole seller and retailer globalized as their own
Secondly, globalization of manufacturing
companies created coordination between distribution and manufacturing
Third, globalization of retail firms
drives globalization of manufacturing firm that sell from retailer. Brand
manufactures faces great difficulty when their retailer globalize. Fourth,
development of electronic commerce it has an effect on national market
Global Forces in the market are
having a great influence on economy. Great mission of international economic
order based on the principles of non-discrimination and free trade by
International Trade Organization (Delbrück, J. 1993).
has increased globalized international markets particularly in financial markets.
Means of globalization have decentralized
the market-oriented approaches. This has also reduced the cost of production, transformation
and holding the inventory but over all it has make the earth a global village for
the economy .It has created an economic vast change in the growth for the whole
world and its economy.