Question

State any four effects of Globalisation on business around the world.

Answer 1

1. Increased Competition: Globalisation has intensified competition for businesses, as they now compete with firms from across the globe. This has made survival and success more challenging, requiring companies to become more efficient and innovative. To cope with global competition, many companies are rapidly expanding through mergers and acquisitions. For instance, Tata Steel has acquired companies in several foreign countries.
2. Access to Wider Markets: Globalisation has enabled businesses to reach a much broader market, allowing them to sell goods and services internationally. This has opened up new growth and expansion opportunities and also provides the benefit of economies of scale.
3. Technological Advancements: Globalisation has encouraged the quick spread of technology, as businesses continuously look for improved methods to enhance operations and remain competitive. This has created greater scope for innovation and the development of new products and services.
4. Liberalisation of Foreign Investment: Many countries have increasingly opened their economies to foreign direct investment. FDI contributes to economic development by fostering a competitive business environment and generating employment opportunities.