What is Globalisation How does it affect the multinational enterprises Essay

What is Globalisation How does it affect the multinational enterprises Explain taking an example of any one multinational enterprise of your choice - Essay Example lity of capital across countries that enables firms to relocate and invest overseas and repatriate their profits, while the development of derivatives and other complex financial products have enabled the rapid growth of global credit markets. Moreover, as trade increasingly becomes freer with economic liberalization after the fall of Communism, which has increased the rate of imports and exports between industrialized and emerging economies. Finally, the growth of multinational companies and brands like Apple has also driven the process of globalization (Dunning, 2012: p14). This paper will discuss globalization and its effects on multinationals with Apple being a case study in the latter discussion. Globalization refers to the process through which the world is increasingly becoming interconnected due to a massive increase in cultural and trade exchange (Dunning, 2012: p33). In turn, this process has increased services and goods production with the largest companies today being multinationals, rather than national firms. Although this process has been occurring for centuries, its pace has increased dramatically over the last fifty years. This has been as a result of reduced differences between different economies, leading to increased trade between and within different countries. One important aspect of globalization is that of integration where, while economies in the past were mostly ‘self-contained’ and export and imports occurred almost co-incidentally, economies today are more closely dependent on one another for markets and raw material (Dunning, 2012: p34). Today, when one economy, like Japan, is in recession, many other economies also suffer the effects of recession. The process of globalization has been greatly influenced by improved transportation with transportation costs for MNCs like Apple decreasing, specifically as larger cargo ships and planes can transport more products (Rugman, 2014: p28). Moreover, economies of scale have led to a