Globalisation refers to the process of interconnection among firms, people and governments of different countries (Lechner, 2009); economies from every country will become closer and interrelated through globalisation as foreign countries are a source of both production and sales for domestic companies. It is obvious that the globalisation has linked with international business as international business consists of all commercial transactions that take place between two or more countries such as sales, investments and transportation.

Globalisation is very common in today’s world. It enables people to travel around the world by improving the transportation and it also helps people to do business in terms of purchase or sell products and services as well as pursuit of business leads. Moreover, globalisation also allows the international communication by improving the technology and it helps businessman to communicate easier with their business partner from other countries.

Globalisation brings both positive and negative impacts on international business. There are rise in competition and rise in investment levels; whereas, the negative impacts on international business are the culture effect and also create more social problems – child labour and slavery as well as environmental issues.

Firstly, globalisation leads to rise in competition. This is because when companies expand their business to different countries this creates competition for domestic businesses in terms of the price, cost and quality of goods and services. This type of competition act as an opportunity for domestic companies to manufacture good quality of products and services and work effectively and efficiently in order to conduct business on a global scale.