To understand the effects of globalization we will take a look at the two possible definitions of globalization. According to A.G. Frank in his book ‘ReOrient: Global Economy in the Asian Age’ globalization is “either a conceptualized modern phenomena involving the breakdown of borders, the emergence of new technologies and a mix of different cultures or a phenomena with a long history which dates back to the first known connections between countries and people in the world…”. With this definition the questions arises if globalization and the freedom of trade and travel actually existed before all the boarders were set up and trade regulations have been put in place. It also raises the question why these regulations and boarders have been set up in the first place why we start tearing them down a couple of centuries later. Was it based on fear to be invaded or was to protect the own economy?

Globalization has become a common word in the last few decades, but it has been going on for centuries, and especially since 1945. The globalization movement is the trend toward increasing interdependencies among world markets, and the diffusion of new ideas, technologies, resources, products, services, and lifestyles through international markets.

Globalization comprises two components:

1. Modernization involves the upgrading of technologies and living standards that occur as ideas, products, and services diffuse through world markets.
2. Acculturation, involves the transfer of lifestyles and behaviors among societies. Currently, Westernization is the dominant form of acculturation. This occurs when non-Western societies emulate the lifestyles, values, and behaviors of North America (Americanisation) and Western Europe.

The evolution of international business and globalization has occurred through three apparent eras: the Exploration Era to 1500; the Colonial Era spanning 1500–1900; and the Era of the International Corporation, from 1900 to the present. Throughout history, innovation and technology have been decisive influences in extending commerce across national boundaries and diffusing new ideas through world markets. What has changed is the pace of this trend; it used to be quite a slow process and in recent years it has become much faster.