Elements and Factors of Globalization Free Sample Essay

Question 1

Globalization refers to the integration of different cultures, regional economic players, and bodies by networking their socio-economic ideas through communication and commerce in the world. Globalization leads to interdependence and integration of different regional organizations to increase their industrial products (Appadurai, 2005). In the case of Rio Tinto’s acquiring Alcan, the three elements of globalization that become apparent are; the extension of the degree and forms of cross-boundary commerce and trades, the increase in foreign direct investments in localities across the globe, and the shift in the direction of economic interdependence among different regional economic players.

Rio Tinto is a big economic player not only in Britain but all over the world. On the other hand, Alcan is a Canadian mining giant. Therefore, Rio Tinto’s deal with Alcan that made the latter a subsidiary is a move to increase foreign direct investments. Both companies can now undertake their production and commerce within the two countries and beyond thanks to globalization. The resources such as raw materials that are present in Canada can be obtained for production by Rio Tinto, and the needed materials present in Britain can be used as well by Alcan such as bauxite which is vital in the production of aluminium. In addition, the market for the products, goods, and services of the two companies has increased.

The degree and forms of transactions have increased as they are on the verge of expanding to India and China and have become leaders in the global production of aluminium. The last element of the shift towards one global economic system is evident by the merger which has made them the number one leading producer of aluminium and the assertion that quality management is a significant factor in any company.  This means that the world economy has shifted towards the best leadership models asserted by the governor of the Bank of Canada. The two companies are now economically interdependent on each other in their operations.

Question 2

The 2 factors which may have pulled Rio Tinto’s global expansion agenda are; the potential increase in the market for their sales and the need to obtain resources that are requisite for their manufacturing. The 2 push factors for Rio Tinto’s expansion agenda include; a decrease in trade barriers and the shift in the direction of democracy. When Rio Tinto integrates with Alcan and starts manufacturing in Canada, its sales will increase as a new market will have been obtained. The merger will also give Rio Tinto a chance to enter the Chinese and Indian markets which will also increase sales. Further, Canada is a resource-rich country and therefore Rio Tinto will be able to easily acquire those raw materials for their manufacturing ventures.

The shift in the direction of democracy allowed Rio Tinto to easily expand as it allowed it to enter foreign countries and do business within the market of the foreign counties as well as acquire businesses in those countries. This was evident from the opponents of the acquisition’s assertion to the government to curtail the acquisitions since they posited that this eroded independence. Rio Tinto was pushed by the factor that globalization has led to a reduction in trade barriers between different countries and thus they could undertake business within any country without restriction. The reduction in trade barriers allowed them to make foreign direct investments, conduct business in Canada, use the resources found in Canada, and increase its corporate sales. In addition, merging with another partner as Alcan points at an added company capability to further expand into other countries.