globalization

noun glob·al·i·za·tion \ ˌglō-bə-lə-ˈzā-shən \
Updated on: 8 Nov 2017

Definition of globalization

: the act or process of globalizing : the state of being globalized; especially : the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets

Recent Examples of globalization from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'globalization.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of globalization

see 1globe


Financial Definition of GLOBALIZATION

globalization

What It Is

Globalization is the integration of national economies through trade, investment, capital flow, labor migration, and technology.

How It Works

Globalization results from the removal of barriers between national economies to encourage the flow of goods, services, capital, and labor.  While the lowering or removal of tariffs and quotas (see General Agreement on Trade and Tariffs, or GATT) that restrict free and open trade among nations has helped globalize the world economy, transportation and communication technologies have had the strongest impact on accelerating the pace of globalization.

Thomas L. Friedman describes the "flattening" of the world economy through globalized trade, outsourcing, supply-chaining and political liberalization.  The use of technologies allows businesses, such as large multi-national corporations, to maintain customers, suppliers and even competitors on a world-wide basis.  The breakdown of businesses into components along its value-chain creates opportunities for multiple businesses located at various spots on the globe to participate in the production of a single good or service.  This global network, even for a single enterprise, is part of globalization.

Several organizations have either been created or have evolved into key roles in the process of globalization.  The World Bank and the International Monetary Fund, for instance, deal primarily with issues of free trade in developing economies and with international monetary policy, including debt and trade balances between dbieloping and industrialized countries.  The World Trade Organization, along with the General Agreement on Trade and Tariffs (GATT), has been involved with removing trade barriers and reducing the cost of trading.

Why It Matters

Increasingly, businesses must recognize that their success depends on efficiency and scalability – being able to The definition of globalization on InvestingAnswersquickly mobilize global resources and reach world markets.   Globalization is the key to growing businesses in the 21st Century.

At the same time, globalization has led economic decision-making away from local control.  As a result, decisions about a company's plans, including expansions, relocations, or closings are increasingly made independently of the considerations of local markets or local managers.



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