Globalization and Its Impact on Global Business Practices Essay

Globalization and Its Impact on Global Business Practices - Essay Example IGOs are organizations consisting of at least three states as members linked together through an agreement called intergovernmental agreement. Examples of IGOs are WTO, North American Free Trade Agreement (NAFTA), OPEC, World Bank, IMF, UNO etc (Hart, 2008,p15).States create IGOs and are the main actors in the decision making process. Now the main power among the states in the USA. USA, Europe, and Japan called the triad economies have been traditionally dominating the global business and the decision making process in the IGOs (Accenture, 2007). In addition to these, globalization has resulted in the emergence of new political actors ie the Non-Governmental Organizations, which have close links with these international government organizations. The main influences on the boundaries of the nation-state due to globalization according to various definitions can be classified as economic, political and cultural. The rise in liberalization and deregulation and the rapidly declining transportation and communication costs, as well as the reduction in barriers to good and services, have resulted in a high rise in the trade, FDI, and transfer of technical knowledge (Frankel, 2000). The rise in FDI has outweighed the rise in exports all over the world (UNCTAD, 2000). Moreover, as a consequence of the internationalization of production, there has been a shift in the production from goods to services all over the world with the services sector contributing to about two-thirds of the world GDP compared to only half of the world GDP in the 1980s(World Bank,2009). The globalization process has changed the traditional home country determinants of FDI.