Anthony Mcgrew defined globalization as a “process of deterritorialization – as social, political and economic activities are increasingly stretched across the globe…” (n.d., “Ch.1: Globalization and global politics”). This comprehensive view gives a glimpse of the trend towards borderless economic societies of the future from the current nation-states based on political considerations. Given the vast differences among the different countries and their peoples in respect of socio-political and economic conditions, this trend gives rise to both promises and pitfalls for the global businesses.
Globalization benefits can be expected from cross-fertilization of ideas, access to best available talent/resources, creativity and technological growth arising out of global competition, creation of networks of alliances, etc. while pitfalls include uncertainty of political conditions and economic policies, impact on local industry and employment, fear of dominance etc. (Ali, 2006, pp.78-81, 141-143). Cross-fertilization of ideas occurs when firms come across different ways of solving a problem or completing tasks, which are more cost effective or in identifying newer opportunities and demands. For example, housing shortage in poor countries can give rise to generation of fresh demand and exploitation of newer/locally available materials and methods of construction. Coming to talent, it is noted that many global firms employ foreign nationals at all levels of organizations recognizing merit. ...Show more