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Business – Causes of Globalization

Analysis of the reasons for growth of international trade or globalization

Globalization refers to the growth of the flow of financial products, goods, telecommunication, and jobs across the globe. It signifies the gradual progress in the world’s economic interdependence. Besides global economic interdependence, cross-border trade has affected cultures and populations. Technological progress, liberalization of trade, and resource policies promote global business. Integration of political agendas to encourage international trade binds the whole world. Telecommunication advancement shortens the geographical distance between countries. Hi-speed internet brings a revolution in the speed of data transfer. Corporations in developed nations can gain a competitive edge through globalization. With significant technological advancements, globalization benefits everybody while harming certain groups.

Causes of Globalization
Rapid technology change

  •    E-banking
  •    E-commerce
  •    E-business
  •    Global communication
    • Developments in satellite/ optical fiber/ internet

Liberalizations of trade and resources

  •    Government restriction withdrawn
  •    Free flow resources
    • Capital
    • Labor
  •    Free international trade
  •    Liberalization of business policies

Consumer pressures

  •    Easy compare & search
  •    Preferring global products
  •    Growth of international trade
  •    Demand high quality product
  •    Increasing international consumers

  Development of services

  •    Advanced services to send goods/ capitals
  •    Development of payment system
    • Paypal/ Mastercard/ multi-currencies cards/ credit cards
  •    Facilitate international business

International media outreach

  •    News in no time
  •    Exchange in culture
  •    Digitally connected

Regional economic groups

  •    Managing global issues
  •    Harmonize trade policies
  •    Promote economic integration
  •    Free International trade for members
  •    Pressurizing international business

Supportive institutions

  •    Uniform economic policies
  •    International Monetary Fund
  •    World Bank advocation
    • Incentives for FDI, by global corporations
    • Devaluation of currencies
    • Liberalization through deregulation & decontrol
    • Removal of subsidies
    • Privatization of public enterprise
    • Free market economies & private sector development
    • Facilitate globalization

Changing political situations

  •    Government helping domestic companies
  •    Political stability promotes trade issues
    • International trade/ movements of goods/ advanced technology
  •    Integrated economic and political policies
  •    Political agendas binding global trade
  •    Political ideology integration

    Increased competition

  •    Companies defending home markets
  •    Tough competition
  •    Promoting international trade participation
  •    In local and global market

The fishbone contains the main factors that start, help and promote global trade and commerce. Each sub-cause lies under different parent causes of a similar category. This root cause analysis template helps everybody learn how to arrange the reasons for any issue.

Who should use the Causes of Globalization template?

  •    Anyone interested to know the driving factors for globalization.
  •    It also helps find out how the economic groups and special international services promote trade and commerce abroad.

Why use this template?

  •     Quick understanding of the potential reasons for which international trade surged suddenly.
  •     Edit this template in smartQED for your own problem-solving.
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