Globalization
For every organization, its goal is to maximize profits. Over the years, the increase in competition causes organization to either disintegrate or rise on top of other competitors. Therefore, the best tactic for any organization is to construct innovative ways in conducting a business. To be more specific, globalization provides a key to an organizational success. Globalization is the “shift toward a more integrated and interdependent world economy” (Hill, 2004, P6). In simpler terms, globalization is a business expansion in the different countries (Department of Commerce, 2007). Wal-Mart is an example of a business’s global expansion. Wal-Mart has successfully expanded its businesses in 4 different areas such as Europe, Canada, South America, and Asia.
International trade theories play a major role in globalization. Free trade is an example of the international trade theory. Free trade is “where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country” (Hill, 2004, P144). Two major factors for greater globalization are “the decline in barriers to the free flows of goods, services, and capital that has occurred since the end of World War II” and “technological change particularly the dramatic developments in recent years in communication, information processing, and transportation technologies” (Hill, 2004, P12).
The barriers to international trade and foreign direct investment occurred in the early 1900. By lowering national barriers to foreign trade, countries all around the world have been able to enjoy tariff free ...