Globalization can be described as the ever-growing and increasingly integrated global economic system characterized by free trade, free flow of capital, and the utilization of more economical foreign labor markets. In class we have discussed the globalization of markets and the globalization of production. There are positive and negative aspects to both facets.

With regard to globalization of markets, a wider variety of products and services can be offered worldwide. This has helped to create a global culture and, therefore, a global marketplace. Unfortunately, it is difficult to globalize all products due to several factors, such as regional tastes and preferences, cultural value systems, business systems and governmental regulations. These barriers often require customization of a firms operations, marketing and products to fit local norms.

As production is globalized, a firm can select factors of production from around the world and choose those with the best cost and quality. One example is using cheaper foreign labor to manufacture products. This drives down cost, and the savings is passed down to the consumer, which makes the firm more competitive. While globalization creates jobs in emerging markets, unskilled workers in more developed countries are either forced to accept pay cuts or lose their jobs altogether as their functions are outsourced abroad. It is also important to consider that U.S. wage and hour laws may not apply to these foreign