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    Bridging the Gap between Internationalization and Globalization

    Global as an extension of internationalization (time, history, wide, scope)

    Globalization is a trend characterized by denationalization (national boundaries

    becoming less relevant) and is different from internationalization (entities cooperatingacross national boundaries). The greater interdependence that globalization is causing

    means an increasingly freer flow of goods, services, money, people, and ideas across

    national borders. (Wild et al, 2010 pg.34)

    The business world has been developing steadily over the last hundred years from

    what was localized to what is now considered more globalized. This trend is set to

    continue in the same vein on into the future. However business practices did not just

    jump from being localized to being globalized. Business developed into globalization

    from internationalization. Internationalization is the process of increasing

    involvement in international operations. A review of research on internationalization

    of firms shows a sequential, stepwise process of development up to the mid-1970s.

    More recently, there has been a departure from this pattern as some companiesattempt to bypass the steps to deeper commitment, resulting in a speeding up of the

    entire process. Generally, internationalization can be expected to be linked to

    developments along each of the following dimensions: 1. the operation method (how),

    2. sales objects (what), 3. target markets (where), 4. organizational capacity, 5.

    personnel, 6. organizational structure, and 7. finance. Factors that help to explain the

    continued forward momentum of the internationalization process of individual

    companies are: 1. resources availability, 2. knowledge development, 3.

    communication networks, 4. risk and uncertainty, 5. control, and 6. commitment.

    (Welch and Luostarinen, 1988)

    The continual advance of internationalization where raw materials, services,

    completed and semi-completed products and goods, currency, people, and ideas have

    increased and diversified, further drives on the advance to globalization. Reaching

    ever more remote locations around the world increasingly even small to medium sized

    business are expanding toward globalization.

    For centuries, people have traded goods and services across nations and have moved

    from one country to another, with or without force. In modern capitalism,

    internationalization took shape through the conquest of colonies and the rise of

    mercantilism. In 1972, George Modelski used the term globalisation to refer

    explicitly to European-led expansion to gain control over other communities in the

    world and integrate these into one global trading system. (Boyer and Drache, 1998

    pg. 68)It was with the coining of the term by Modelski that gave rise to business interest in

    potential growth by globalizing their operations rather than just internationalizing. As

    every country and their individual economies have benefits and deficientcies for

    business compared to others, the search for more efficient business operations will

    follow the global route into the future.

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    Boyer, R. Drache, D., 1998. States Against Markets: The Limits of Globalization.

    New York, New York: Routledge.

    Welch, L. & Luostarinen, R., 1988. Internationalization: Evolution of a Concept. ,14(2), p.34-55. Available at: http://search.ebscohost.com/login.aspx?

    direct=true&db=bth&AN=11480350&site=ehost-live [Accessed October 10, 2010].

    Wild, J. Wild, K. and Han, J., 2010.International Business: The Challenges of

    Globalization. 5th ed. Upper Saddle River, New Jersey: Prentice Hall.

    http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-livehttp://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-livehttp://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-livehttp://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11480350&site=ehost-live