In recent decades, mankind experienced the impact of globalisation which is modern business in a global context. In this new world people, communities, corporations and even small-scale businesses are interconnected. The interconnection is made possible through technology such as transportation and telecommunication technology. The most critical component is the Internet and the World-Wide-Web. The interconnection can be seen in the legal, social and economic environments.

            According to one commentary, “globalisation is a compression of the world and the intensification of consciousness of the world.”In other words, the world is getting smaller and yet at the same the networking of people and business is intensified. One of the best examples of the impact of globalisation is the emergence of China as one of the world’s most important economies. China has become an important component in a global network of manufacturers. Companies in Europe and the United States decided to bring their factories to China to avail of cheap labour. Foreign-direct investment is the main tool that was used to move money from one continent to the next.

            In globalized networking of business, money is not the only important ingredient. In the case of China and other countries that offer cheap labour, another important component is the existence of international laws that formalises the agreement between two corporations based in two different countries with different laws and expectations. It is therefore important to learn more about the World Trade Organization and the various agencies that help enforce the agreements made between businessmen with different nationalities. Contract laws that are used in the United Kingdom may not be effective in the Middle East. It is now important to learn more about international laws especially when it comes to contracts and agreements. As a result arbitration is one of the key methods used to settle international disputes.

            Aside from money and laws there is another vital ingredient when it comes to the globalised nature of modern business. The social, legal, and economic realms are also intertwined with the political realm. For example, the leaders of the free world have an uneasy relationship with leaders that do not cooperate with the majority. Examples of political leadership that do not seem to appreciate the benefits of globalisation are North Korea and Iran. In the past the common way to deal with rogue nations is to initiate an economic embargo. The use of such extreme measures highlights the fact that a country can no longer survive on its own because it has to do business with other nations.  

            One example of an interconnection of the legal, economic and social environment is the existence of social responsible investing or SRI. In the past the world of investments through the stock market already had an indirect link with corporate social responsibility. But with the increasing knowledge when it comes to CSR principles and the ability of investors to track the impact of their investment, there is now a growing impetus to invest only in companies that demonstrate their concern for the environment and humanity.

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SRI is a type of investment strategy that links the investors’ money to issues concerning life, society, the environment, and the world. It is based on the idea an investor does not only exist to make a profit but someone who takes part in the creation of a new world where all the stakeholders are aware of the long-term consequences of their actions. SRI enables the investor to understand that every time funds are channelled to a particular company or country there is always an action-reaction that will take place and it will impact the social, economic, and political sphere of a nation or even the world depending on the amount of money invested.

Amy Domini in her book, Socially Responsible Investing: Making a Difference and Making Money may well have provided the reason as to the significant awakening of investor’s conscience when she wrote:

A steady rise in stock prices has raised the wealth levels of millions, given them discretionary spending dollars and some comfort that they will be able to retire with dignity. Nonetheless, our pristine wilderness is disappearing … vast ghettoes scar every metropolis. Millions live in slavery, or prisons, or as captives in their own homes. Children of eight are forced into the advance guard of armies. Others are sold into bonded apprenticeship or prostitution.

            It must be pointed out that socially responsible investing enables the investor to determine if a particular company violated labour law and other ethical standards especially those that concern the environment and human rights. SRI investors are serious when it comes to practices such as child labour, sweatshops, and discrimination in hiring and other forms of discrimination, produces products detrimental to society or engages in business dealings that are deemed reprehensible by most people.

In this case one can see the relationship between investment funds and the law. But in the 21st century the capability of investors to channel funds from one company to the next is not only limited in the companies that are within their national boundaries. Investors can move their funds to places like China and India. Therefore, investors are not only aware of the laws the United Kingdom for example but international laws as well.


            Globalisation is the compression of the world and at the same time the intensification of interconnections between people, communities, businesses and politicians. Globalisation is the result of radical improvements in technology as well as the need to create a more efficient system to buy, sell, and manufacture goods. Due to the intensification of interconnection and the need to work with other nationalities it is important to have a legal framework that can help enforce agreements. Arbitration is one of the key methods used to settle international disputes. The increase in the interconnectedness of people and societies made it easier to know more about the economic and social impact of investing. As a result, the globalisation of the market is not only limited in the manufacture and transportation of goods and services but also the way funds are moved from one continent to the next.

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