Describe the forces of globalization and its implications for the multinational firm.

Course title: global financial mangement

Globalization refers to the increasing interconnectedness of countries and cultures and greater integration among them. Globalization has been driven both by advancements in technology and communications, as well government policies.

Multinational companies have seen a huge impact from globalization. These companies have been able to access new markets and increase profits by having cheaper labor, resources and capitalizing upon new market demand. Multinationals can also reduce import/export tariffs through global trade agreements, which makes it much easier to access foreign markets.

Globalization, on the other hand can present challenges to multinational companies. Multinationals will need to be agile to remain competitive as products change rapidly and are frequently created in a hurry. In addition, increased competition from multinationals seeking market share in new markets can lead to price wars that can erode margins and intense government pressure regarding taxes and environmental compliance. Despite these potential difficulties however if managed correctly a firm’s ability to leverage its expertise across multiple borders can lead toward greater success than ever before possible

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