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Globalization

 

Globalization has been one of the major trends in business in the last decade. It is estimated that 579 global corporations account for about 25 percent of the world's production. These companies range in size from $1 billion to $100 billion. The world's strongest economies have been heavily trade oriented. As the value of the U.S. dollar has fallen, this country has also dramatically increased its exports. Chronic trade surpluses in Japan have focussed attention in other countries on world trade and on lowering barriers to trade.

 

The European Economic Community (EEC) has eliminated almost all barriers to trade and is planning to adopt a common currency (though the success of this latter effort is in some doubt). The U.S., Canada and Mexico have completed the NAFTA free-trade pact that will phase out most tariffs over a fifteen-year period. The consensus among economists is that free trade will eventually benefit all countries that participate. There are also emerging markets in Eastern Europe and the Commonwealth of Soviet States. Globalization can make a greatly improve the management of firms with operations in many parts of the world.