Globalization – What is it?

Globalization – What is it?


Globalization has been used in context of nation to nation trade. In a more general sense the word can be interpreted as an entity incorporating the products and services of others in the development, sale and distribution of their products and services. We typically think of manufactured products and services, though one could make the case that the current American financial crisis was spread worldwide by that sale of those financial instruments globally. In other words, single financial instruments sold individually, many financial instruments packaged into larger financial packages, financial derivatives sold based upon the fluctuation in performance of those financial packages.

Take away thought: Any business to business transaction can be thought of as globalization. Total vertical business integration is not cost effective, feasible or competitive. Vertical integration is an anathema to robust business flexibility or the ability to shift approaches quickly as the market changes. NIH (not invented here) and the concept of “sunk costs” must be avoided.

-- Timothy Chen