Positive and negative effects of globalisation
Essay Question: Globalisation has led to significant shifts in the world economy over the last three decades. Please describe these major shifts. It has been suggested that globalisation is a major driving force of the global economy towards greater prosperity. It has also been argued that greater globalisation has brought greater risks to the world economy. Given the situation that the whole world has just been facing the most severe financial crisis and economic recession for many decades, what is your view on the globalisation debate?
Globalization refers to the shift towards a more integrated and interdependent world economy (Hill, Cronk, & Wickramasekera, 2008). Globalization has brought a lot of people into contact with the world by declining the barriers of the free flow of goods and services, since the World War II and the dramatic technological change and development in recent years mainly in the past three decades (Hill, Cronk, & Wickramasekera, 2008). This development has made the people around the world to be connected to each other. Information and money flow quicker than ever. Products produced in one town are available to the rest of the world. It becomes much easier for anyone to travel, communicate and do business internationally. Free flow of goods and service s has produced many opportunities for business. This whole phenomenon has been called globalization. This essay is about globalization, how globalization led to significant shifts in the world, I will describe these major shifts in more details. How globalization has brought the economy and many countries into better prosperity. On the other hand, the greater the globalization the riskiest it gets. Finally, I will view my points on the globalization debate.
After the break down of the Soviet Union, globalization accelerated through the world. It included the increasing of integration countries' individual economies, the rise in the world trade and multinational companies and the effect of large sums of money moving in and out of economies. People around the globe are more connected to each other than ever before. Information and money flow more quickly than ever. Goods and services produced in one part of the world are increasingly available in all parts of the world. International travel is more frequent. International communication is commonplace. This phenomenon has been titled "globalization".
McDonalds has more than 25,000 branches in 100 countries (Vijayarani, 2004). This achievement shows how globalization has impacted this organization in terms of culture and operational activities. The success of this fast food chain can be best attributed by its ability and techniques to adapt to local cultures and resources. This ability has benefited McDonalds tremendously by allowing McDonalds to spread its brand worldwide which is now earning the company over $4.0 billion annually in revenue (Lockyer, 2006). The problems of globalizations attributed by various cultures and management systems were turned into opportunities by the company’s continued sensitivity to local cultures. For instance, McDonalds has training programs translated in over 35 different languages mainly English, Spanish, German, French and Chinese to suit the needs of customers as well the needs of various franchises worldwide.
Globalization has been accompanied by multiple developments on the world stage, or may have existed before. But it increased the degree of appearance, and these phenomena may be economic, political, cultural, communications and the most prominent of these is with no doubt the economic phenomena.
Transformation of the economy (traditional activities such as the exchange of goods in kind, buying and selling) to a symbolic economy that uses icons and electronic pulses through the computers and electronic devices connectivity, will result in increasing the volume of electronic commerce, electronic data interchange in the trade sector, transport, money, credit and others.
Deep interdependence among nations, national economies and the trade through speed and ease of moving goods is a good result outsourcing. Outsourcing is the tasks that were previously performed in-house are now purchased from another firm (Hill, Cronk, & Wickramasekera, 2008). Capital and information across borders with the trend towards integration of financial markets, especially with the elimination of many non-tariff barriers and obstacles to the flow after the establishment of World Trade Organization, may arrange for the removal of barriers and obstacles between the markets now that the competition is the strongest factor in determining the type of goods produced by the state.
Few regions of the world have been affected by the wave of globalization than the Asia Pacific Basin. Changes have occurred over the past three decades as the result of the increasing interdependence of Asian countries with each other and with the rest of the world (Rondinelli & Heffron, 2007). Globalization has led the international interactions and interdependencies have led to the spread of culture influences and the ability of people living near each other anywhere in the world just to communicate with each other (Rondinelli & Heffron, 2007). Many multinational corporations benefited from global economy in many ways, some of these organizations have seen the differences in the education level, which made the education sector a major concern. With better education provided, better jobs will be granted and the participation in global economies will be more effective which will lead in high standard of living. (Rondinelli & Heffron, 2007).
Globalization brings great prosperity to those countries that open their market to the international trade and investment. Countries that do open to the global markets and share its products grow faster than those who limit their domestic markets and limit their participations in international trade. The growth in gross domestic product is associated with export growth (Rondinelli & Heffron, 2007).
Globalization has brought greater risks to the world economy, worsening debt and increasing multinational corporations Fairies.
The prevalence of multinational corporations, with control over investment, production and international, MNC companies such as IBM, Microsoft, and others, especially after the World Trade Organization equated between these companies and national companies in the transaction.
The problem of the global debt, especially the debt of the third world, poor countries with no capacity to pay as well as the debt services and profits of multinational companies has grown in a scary way. Many MNC have been cutting down in employment number, just to reduce their debts.
The emergence of a new international division of work in which the developed countries gave to the developing countries for some manufacturing industries (i.e. industries that depend on the conversion of the raw material to processes goods can benefit from them), that do not meet a comparative advantage, such as intensive industries, labor-intensive and polluting the environment while developed countries have focused on high-tech industries like computers, software, and telecommunications equipment and electronic industries with safer and higher profitability and less employment.
Areas like information and communication technologies grant not only the interests of global capitalism but also many small groups to publish their messages and ideas. This is demonstrated by the Democratic side of the development of modern technical. In fact the great diversity of representatives of the actors on the pages of the information network of international non-governmental organizations working in the areas of human rights and the environment through the opponents of globalization and access to the movements of Nazism and the radical. On the other hand, the effectiveness of campaigns organized by some of these parties against State policies and large corporations. This does not mean in any way deny the fact that there are centers and parties in the modern world with remains globalized world of ideas and visions, symbols and letters coming in large part from the cultural frameworks in the developed North controlling the accounts of the overall strength. However, the previous analysis proves that how they formulated and published on the basis of these components and the image that is the interaction with and awareness deny the essence of a unilateral approach, and widespread in our midst, which sees in globalization merely a synonym for domination.
Not only the term of globalization has increased since the last years, but also anti-globalization has appeared and is still increasing. The first wave of global protest began in the mid-1970s and focused on the austerity measures adopted as part of the “structural adjustment” programmed (Munck, 2007). Anti-globalization is the umbrella term for a group of different protest causes, including: environmentalism, third world debt, animal rights, child labor, anarchism, and anti-capitalism and opposition to multinationals. The most attacked institutions of anti-globalization protests have been especially World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (Hill, Cronk, & Wickramasekera, 2008). As the big businesses are increasing all around the world, anti-global activities and protests are also increasing their level of strength and violence. McDonald's is one of the most criticized companies by anti-globalists who reproached corporation's low wages, advertising practices, participation in deforestation, harvesting of animals, and promotion of junk food and an unhealthy diet. There were several trials between McDonald's and activists and it did not matter whether activist had won or not, because both cases negatively influenced the good name of the corporation. Activists claim that McDonald's is selling junk food that is overly saturated with salt, sugar, and fats, producing high cholesterol (Kellner, 2001). Moreover, this food is overpriced and it destroys traditions like home cooking, individualized family restaurants, and a balanced and healthy diet. McDonald's is Multinational Corporation that does not customize its products and because of its enormous growth all around the worth, McDonald's is the paradigm of mass homogeneity, sameness, and standardization which erases individuality, specificity and difference.
Indeed, globalization has over hundreds of years contributed to the progress of the world, through travel, trade, migration, spread of cultural influences and dissemination of knowledge (Rondinelli & Heffron, 2007).
Globalization has brought many positive aspects to some countries. Lowering the prices of goods and services has made many customers and consumers happy. For example, Australia was greeted with news in early 2007 that manufactures will be relocated to India. This has led to a huge in a loss of job. However, manufactures operating in India are producing in lower costs which will lead to lowering the price of this product (Hill, Cronk, & Wickramasekera, 2008). As well as, this operation will lead to a better economy for India, because an increase income is provided, jobs will be provided as well.
At the same time relocating of manufactures or services from advanced countries to poor-labor countries will destroy many jobs in the wealthy advanced countries. An example is Etisalat communications. Their call center was located in Dubai when the company was operating in Emirates. In 2009, the company started operating in Egypt, which made them use the low wages and the low operating costs in Egypt. So they moved their call center to Egypt. As well as a lot of MNC will decrease their wage rates of unskilled employees in developed countries. Any problem in one country can affect the whole world. Open, global market means that any financial diesis will spread widely.
Globalization has made the people around the whole world connected with each other. Sending and receiving money is just matter of seconds nowadays. This made many companies go international. An example of Multinational Corporation is McDonalds. McDonalds who become successful and powerful around the world had taken into consideration many aspects of management strategy which benefited them. Globalization has existed before, but it increased in new levels. The economic level was and still the most important one. Countries with global economy with less trade regulations and trade goods and services more frequently, will result in an increase in the trade sectors, money and transportations. Outsourcing has led to the spread of culture influences. However globalization has brought great risks to the world. The problem of the global debt and the poor countries has grown in an effective ways. Some companies had to fire most of their employees to reduce their debt. Anti-globalization has appeared in the mid 70s and focused on measures adopted as part of the structural adjustment. Anti-globalization is a term of group of different protest causes like animal rights, child labor and anti-capitalism. McDonald’s is one of the most criticized companies by anti-globalists. Positive aspects of globalization are the low prices of goods, new available jobs, the production process have become cheaper and some economies benefited. On the other hand, granting jobs in one country means the loss of jobs in other country, destroying manufacturing jobs in the developed countries and reducing the wage rate of unskilled labor in the developed countries. In the end I agree with the term globalization because overall the benefits that came out of it are more effective and made the whole world better-off.
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