Overview of Globalization I.

The concept of the globalization of markets was first introduced by Harvard Professor Theodore Levitt with his classic article titled "The Globalization of Markets" in the Harvard Business Review in 1984. In this article, Levitt (1984) assumed that the world-wide success of a growing list of products that have become household names, is evidence that consumers world-wide would develop preference for standardised products of multinational companies. Despite deep rooted cultural differences, consumer taste would become alike, or as Levitt (1984) formulated it, homogenised. In consequence, he contends, the traditional multinational corporation (MNC) strategy of tailoring it is products to the needs of multiple markets, may put it as a severe disadvantage vis-a-vis competitors who apply marketing imagination to the task of developing, advanced, reliable, standardise products at the right price on global scale.

Kenichi Ohmae (1990) put the globalization of markets more into the context of the MNC, which is capable due to a borderless world, of operating where it confronts the most promising business conditions. He furthermore emphasises the individual capability of peoples who, can choose as well the most promising working environment in a borderless world:

Today's global corporations are borderless because consumers have become less nationalistic. True global corporations serve the interest of customers and not governments. They invest, they train, they pay taxes, they

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tageous to investors and to the countries in which investments are made (simply because they become more appealing). Another example of globalization was described by Kroll (2002). This writer pointed out that the stock exchanges themselves are going global. Over the course of the next five to ten years, transactions on the stock exchanges are expected to be between companies and investors from different countries. As investors find it easier to directly buy and sell shares in businesses around the globe, it is likely that they will put more of their money into those companies promising the greatest reward, regardless of their location. What this means, says Kroll (2002), is that companies will need to market their financial stories on the global level in order to access the global investor, who will be able to maximize shareholder wealth in this manner. Kroll (2002) sees several forces driving stock market globalization. Institutional and retail investors want higher returns and won't hesitate to head to other countries to obtain it. Countries that do not have a vibrant capital market are beginning to court investors in order to grow their economies. Regional exchanges are increasing in number and in trade volum

Category: Economics - O