Explain how globalization altered people’s sense of identity. How did globalization challenge national identity and the idea of the nation-state?

Globalization is the world order that has developed in the wake of the Cold War. The term was popularized especially by Thomas Friedman, columnist for the New York Times, who wrote two monographs on the topic, beginning with The Lexus and the Olive Tree (1999) and then The World Is Flat (2005). Friedman has argued in particular that individual countries have forsaken economic sovereignty to participate in the global economy.
Globalization is a term that refers to the integration of communications, technology, and economic markets. The effect on identity is certainly, out of necessity, compromised. As opposed to the Cold War system, wherein countries were divided and an individual's and nation's sense of identity was defined by the country into which one was divided, globalization is defined by interconnectivity.
On the one hand, globalization allows for the free exchange of ideas, technology, and culture (especially by means of the Internet, globalization's single most representative symbol). On the other hand, this same ease of communication arguably allows projections of culture to disseminate rapidly, thus reinforcing national stereotypes.
In reality, a nation-state that formerly espoused isolationist views is now forced to engage with other nations in order to keep costs of goods affordable as a consumer and also remain competitive as a producer in a global market. Nation-states might not disappear entirely in a globalized market, but the way they do business will change. Globalization generally promotes features of Western culture, and so the effect of globalization will not be the same for all nation-states.
There are globalization enthusiasts (who tend to overemphasize the effects of globalization) as well as skeptics (who think globalization is an overstated phenomenon). Though nation-states are not in control of their own economies to the extent that they used to be (owing to the existence of organizations such as the WTO, NAFTA, and the IMF), there remains a place for nation-states in a globalized world, primarily as regulators of humanitarian issues (such as keeping in check the ever-widening wage gap), as well as, more abstractly, agents of "culture" that propagate national trends and fashions.