BTL 840 - Internationalization and Globalization

 

The Banking Tutor’s Lessons

BTL 840                                                                                               15-11-2025

Internationalization and Globalization 

Globalization is that process which accelerates the flow and exchange of products and services, capital, technology, information, jobs etc. across the globe. It  improves the interaction amidst different countries  around the world. It  transforms the world economy into a more open and autonomous system. 

Internationalization refers to a process, to develop products in a manner which is capable of fulfilling the requirements of customers of different countries.  This means that when the firm starts doing business in different countries, it refers to internationalization. 

Direct involvement of a domestic business enterprise in other countries and investment in new trade, sometimes, different from the existing one is called internationalization.  It includes activities such as export, import, relocation of the business to a different country, international transmission of know-how, foreign direct investment, etc.  It is an expansion strategy used by the companies. 

The difference between Internationalization and Globalization are discussed hereunder: 

1. Internationalization is the process of developing adaptable products so that the products can be viewed, distributed, purchased and consumed by a people belonging to different cultures, which facilitates expansion. On the other hand, Globalization implies the augmented geographical movements of the goods and services, money, knowledge, cultural values, etc across the boundaries of the country. 

2. Internationalization is all about the firm and its business because in this process the firm aims to enter the international market and become a part of other countries. Conversely, globalization has more to do with the world economy, as it tends to connect the economies of the world for free trade and sync the rules and regulations of various nations. 

3. Internationalization is highly affected by tastes, preferences, traditions, cultural and religious values, climatic conditions, etc. of the country. As against, globalization, telecommunication network, logistics, infrastructural development, availability of labour, etc. are the important factors which affect globalization. 

4. The primary aim of internationalization of business is expansion, whereas globalization aims at free movement of goods and services, people, and capital. 

(This is Re-Publication of PB 234 dt. 24-11-2020)

 

Sekhar Pariti

+91 9440641014