This chapter sets the scene for the rest of the book lu shows how the world economy is becoming more drivers of globalization global and reviews the main arguing that they seem to be thrusting nation-stat toward more tightly integrated global economy We looked at how the nature of international business is changing in response to the changing global economy we discussed some concerns raised by rapid globaliza tion: and we reviewed implications of rapid globaliza tion for individual managers. The chapter made the following points: 1.Over the past two decades, we have witnessed the globalization of markets and production. 2. The globalization of markets implies that na tional markets are merging into one huge mar ketplace. However, it is important not to push this view too far. 3. The globalization of production implies that ng individual activities firms are at the optimal world locations for the particular activities. As a consequence, it is increasingly ir relevant to talk about American products, Japa- nese products, or German products, since these are being replaced by "global products factors seem underlie the trend toward globalization: declining trade barriers and changes in communication, information, and transporta- tion technologies. 5. Since the end of World War II, barriers to the free flow of goods, services, and capital have been lowered significantly. More than anything else, this has facilitated the trend toward the global ization of production and has enabled firms to view the world as a singie market. 6. As a consequence of the globalization of produc tion and markets, in the last decade world trade has than direct investment has surged, imports have penetrated more deeply into the world's industrial nations, and competitive pressures have increased in industry after industry.