Understanding What The Global Environment Is

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Environment, as I understand it, is generally the surrounding condition that may influence whatever within it. It can be much diversified depending on the perspective that we are looking from. For example the most common environment is the geological environment such as the climate, or the weather which we can see of feel. Other types of environment can be those that are more intangible such as the social environment or economic environment. Social environments are mostly influenced by the society's perspective or culture, while economic environments may be influenced by the governments' regulations or other political influences.

From this understanding, my opinion on global environment is that it is the surrounding condition that has boundless influences. This environment can be influenced by a vast variety of forces from different parts of the world. On the other hand, it also has an opposite impact where one force or factor may have a global impact on different parts of the world. It can also be identified as the outcome of globalization. As of now, we are already living in a global environment thanks to the revolutionizing emergence of the World Wide Web. Almost everything that we see around us is a result of globalization, mainly fuelled by the boundless communication medium that allows us to exchange information quickly and effectively.

Similar like how the climate influences the crops or plantations, the global environment can influence us in many ways as it eliminates the limits of being confined in local or regional standpoint. Therefore, the scope of knowledge, opportunities, and potentials are unlimited as well. For example, we are able to have the information of what is happening in other parts of the world, in terms of life changing events such as the wars, tsunami, or in terms of development such as the booming economy in China. With this information, we are able to look into the opportunity to learn, help, innovate, and improve ourselves in terms of development.

What is the Global Business Environment?

In reference to the previous question, my opinion on the Global Business Environment is that it is the condition that has global influences on a business operation. In other words, influences from different part of the world are capable of impacting the business, and vice versa. In understanding the global business environment, many aspects have to be taken into account such as the economic, social, and political conditions or environment.

Being in the Global Business Environment opens more opportunities and poses higher potential as the business scope is boundless. A business can expand globally where the global citizens are your customers, clients, suppliers, or even employees. The existence of this environment creates a worldwide market for almost any businesses. Business owners are able to be headquartered in one country while having customers from many other different countries or even regions. They are also able to manage their resources better, both in terms of manpower and material by sourcing from locations with lower labor cost and material costs.

Additionally, utilizing the Global Business Environment to achieve a business's highest potential is not a simple task. Many aspects have to be taken into account such as the diverse cultures of the worldwide market, the laws and regulations of different countries, and also most importantly, the demographic profiles. Therefore, being able to cater to these differences around the world is one of the key factors of a successful business in the Global Business Environment.

On the other hand, on top of being able to provide for the global market, the ability to withstand the impact of the Global Business Environment is also very vital in the success of a business. I believe the most common impact is the competition. A business that operates in a local environment only competes with local competitors. However, Global Business Environment allows more players to enter the game. In addition to the local competitors, there will be competitors from other cities or countries that are able to provide the same product or its substitute with a better quality or competitive prices. Thus, it will provide more options for customers or consumers and cause a threat to the business. Global Business Environment also opened up more possibilities of duplication such as business concept, products, and even brand name. It will be tougher for a business to differentiate itself and win market share. Therefore, in a Global Business Environment, marketing strategy, product innovation, research and development are essential in creating the gap between a business and its competitors through uniqueness, building a brand name and also delivering market's needs.

Question 3

What aspects of Globalization do you see in your own local community and what is the impact of these on local society?

More online shops or boutiques are available now and are mostly managed by young girls in their teens or twenties. These types of business are mostly set up as a part-time job while they have classes or a permanent job during normal days. The aspect of globalization here is the communication, trading, and logistics system involved in the business, which allowed the owner to reach worldwide potential customers. The standardization of online payments through internet banking, pay pal, or credit cards, online purchases are easier nowadays and can easily made from any location. International postal and delivery services are also widely available which eases the exchange of items. Without globalization, such business operation in the local environment shall not be as easy, let alone being able to trade internationally.

In regards to this aspect of globalization, the impact on the local society shall be more towards the perception and acceptance of online purchases and trading. Online transaction is becoming a common practice as security features are constantly being improved and people are getting used to the convenience of it. With online shopping and banking, purchases can be made at any time of the day without having to even get out of the house. It gives new challenges to the conventional brick-and-mortar businesses.

Being employed by a multi-national company (MNC) is becoming more common, especially for the younger generation who are fresh in the job market right now. Growing up in the Malay community, I would say that 20 years ago, working for a foreign company means taking a huge risk of being retrenched during economic downturns. When I looked at my parents and their generations which are the baby boomers, most of them either worked in the government sector, or at least sought at securing a job with the government. In fact, most of them still have the same mentality today that believe a job with the government is the most promising and respectable job. However, as globalization brings more multi-national companies to invest in Malaysia, the local job market has changed. It seems that graduates are keener on securing a position in a multi-national company, mostly due to the challenge, higher salary range, and also the valuable experience of working in an international organization. The possibility of being retrenched does not seem to be a big concern anymore. This is mainly because there are a lot more job opportunities in the private sector nowadays and having the working experience in a huge organization opens up more chances of securing a new job in no time. Being able to command higher salary range also allowed employees to be able to save up more for rainy days such as during unemployment period between jobs.

Before the age of Globalization sets in, we rarely hear of interracial or inter-nationality marriages in our community. Although it started way back in the 14th century when Malacca was one of the most important seaports for merchant travelling from the Middle East, Europe and China resulting in the birth of the "Peranakan" people, we see that it dropped significantly during the First World War. Fast forward it to a century later, with the help of the World Wide Web, the rise of social network applications enhance the borderless world through globalisation of communicating system. It allows more people to be connected throughout the globe, building and nurturing relationships and social connections. Thus, the numbers of interracial and inter-nationals marriage is increasing again, supporting by the unrestricted communication medium and also the expansion of transportation technologies that practically has shrunk the world. In the local community, more foreigners are entering the country for many different reasons such as to enrol in higher education that is offered here, expatriates assignments, vacations, or simply trying to explore new opportunities. As a result, in Malaysia we can see many new generations are coming from a mixed cultural background as a result of interracial marriages. This is also especially significant in Malaysia as the Malaysian themselves consist of three major ethnic group which are the Malays, Indians, and Chinese from the very beginning of Malaysian history. This aspect of globalization has definitely impacted the local community with cultural integration thus changing the face of our society.


Question 1

What are the main forces that drive Globalisation?

Trade agreement

There are a few types of trade agreements such as the Trade and Investment Framework Agreement (TIFA), Bilateral Investment Treaty (BIT), Preferential Trade Arrangement (PTA), and Free Trade Agreement (FTA), to name a few. 2 These agreements are basically the results of negotiations regarding trade restrictions, investments guarantees, tariffs, quotas, and so on. The negotiations are between countries when they faced trade barriers due to restrictions and need the restrictions to be revised. As a result to these negotiations, markets are becoming more open for international trading activities. 3

With the concept of open market being implemented especially for developing countries, it fuelled more capital flow and cost transfer between countries. Foreign investors are grabbing the opportunity to invest in developing countries that offers lower labor cost and abundant natural resources. The entrance of foreign investors brought in new technologies, communication systems and introducing new cultures thus further develop the local community thus fuelling globalization. Therefore, the changes in trade restrictions through agreements allow more foreign investors to enter the country, thus indirectly introduces new products, culture, and even ideology. Such fusion is part of the globalization that we are seeing today.

Transnational Corporations

Nowadays, transnational companies are regarded as some of the world's most influential political and economic entities. 4 This is because these giants such as Royal Dutch Shell and Ford have rooted themselves all over the globe, influencing each country through technology, development, and culture. Their presence also provided a vast option of job opportunities for locals thus improving the standards of living while at the same time building their importance to the government especially for developing nations. Additionally, it is not surprising to find that these companies also play a significant role in negotiating for trade agreements as mentioned above.

Looking into the internal organization perspective, operating in the global environment will definitely calls for worldwide internal communication and standardization in operations. Employees from all over the world are connected through the same intranet and company emails, and also managed by the same administrative system such as Pay and Benefit, Training and Development. This creates a means of equality among employees regardless whichever country they are located in.

The widespread of research and technology advancement is also inevitable. In manufacturing industry, organizations are merging low cost labor in the developing countries with innovation in technology to obtain optimum cost saving and efficiency. Therefore, new technologies that have never been practiced locally before can easily be brought in through these transnational companies as part of their expansion plans. In conclusion, the presence of transnational companies is more than a mere influence in globalization. Instead, it is one of the core drivers of globalization, contributing on the aspects of economical, social, and technological forces.

Communication system

Globalization will not be as rapid as what we are facing today if it is not due to the expansion of the communication system through the revolutionizing communication technology. The emergence of internet technology has helped to fuel and redefine globalization to a new height which is now very significant in almost every aspect of our daily lives. Since the introduction of the internet technology to the society, globalization has yet to slow down. It is integrating and merging people from around the globe. The existence of the Internet since over the past decade has provided a common platform upon which users everywhere are able to communicate. 5 Information exchange is also boundless in the virtual world of Internet which allows us to utilize it in a great variety of purpose such as for education, entertainment, social activities, and also businesses.

The Internet also drives the development of application software, advanced programming, and supporting devices such as laptop computers and smartphones. Pairing up with the rapid development in the electronics industry, the Internet are now an integral part of our lives and has been made very easily accessible. Nowadays, we can have access to the Internet literally at the tips of our fingers by using mobile phones with the service provided by the supporting telecommunication company. This allows us to get connected with millions of other users across the globe in real time transmission. There are also a huge variety of other facilities that can be utilized with the help to the Internet such as online banking transaction, online booking and purchases, information database, video conferencing, and many others. All of these online activities can be done from any location in the world, regardless of the time and place. In other words, no restrictions or limitations, thus it shapes and defines the aspect of globalization.

Transportation system

The transportation system also plays an important role in the route to globalization. The internet technology may have contributed significantly in the virtual aspect through the World Wide Web however it is the advancement of the transportation system that literally brought everything together towards globalization. Transportation system has always been supporting trading activities between countries to transfer goods and to allow movements of people across borders. As time passed with the discoveries of new routes and improvement of the transportation technology, travel duration is reduced and routes are shortened. The means of transportation evolved into becoming faster with higher capacity, from cargo ships to trains and also airplanes.

The transportation technology advancement is followed by the development of integrating transportation infrastructures in order to support the activities delivered by the transportation system. Countries are building railways, airports, seaports, and highways, to accommodate the movements of globalization. 1 By the second half of the 20th century, many international transportation systems were in place, forming the fundamentals of a global transport system and reinforced by a global telecommunication network. Fundamental changes took place as the role of transportation evolved. From a situation where transportation was a simple infrastructure permitting and supporting trade and mobility, transportation has become a significant factor in shaping global production and markets. 6

Question 2

Identify the arguments of those who say Globalization creates jobs and boosts wages.

It is undeniable that globalizations opens up more job opportunities especially for developing countries where foreign investors poured in and expand their business operations through manufacturing plants, branches, sales offices, and so on. The increase of job opportunities reduces unemployment rate and poverty. Additionally, as there are more choices of available jobs, it gives employees more power to choose and to command higher wages. This is because human resources are in high demand and it reduces the desperation for employment. These positive impacts of globalization on employment are apparent for developing countries and new market entrance. However, it might not be true in the long run. In fact, it might even pose as a threat in terms of employment standpoint in long term duration. Influential big corporations have the capital that are easily transferable internationally thus giving them the power to seek out high quality, low cost labor with which to expand. The well-articulated fear of labor advocates is that internationally mobile capital will be attracted to labor markets with low wages and poorly protected labor rights. Furthermore, national governments may erode labor protections in order to attract capital. 7 Thus, in the government's eagerness or desperation to attract foreign investors, more jobs opportunities may be created, however labor rights might have been compromised. This could put employees at risks of any employee-related issues such as pay cut, suspension, or termination.

As an outcome of globalization, the increase of job opportunities is mostly due to the transnational corporations in the manufacturing industry. This is because the manufacturing industry is constantly seeking for opportunity to reduce cost through high capacity manufacturing plants with low labor costs. Therefore, developing countries with lower wages are the most suitable location for them to expand and increase their revenues. With this objective in mind, these countries are also at risk of unemployment rise in a long-term perspective. As stated earlier, globalization is indeed able to increase wages. However, as the local workforce is gaining more power at commanding higher pay, it is likely that the manufacturing giants will be looking into alternative options. The first option is that they are able to outsource for immigrant workers whom commands a lower salary range. For example, in Malaysia most manufacturing plants hired Indonesian workers who are less demanding than the locals due to the currently exchange. Thus, instead of creating more job, the outcome is actually causing less job opportunities as most of the vacancies are being fill up by immigrant workers. The second option is that the company can also opt to move its operations to a different location that offers lower wages. For example, as Malaysians are commanding higher wages nowadays, transnational corporations are expanding to other developing countries with promising new markets such as India and China. This can cause a very significant impact on unemployment as a lot of people will be out of job. Therefore, the entrance of transnational corporations may create opportunities, but the existence of them in the long run can pose as a threat for their local employees.

As for those that are not depending on the manufacturing industry, they are more at risk of unemployment as a result of globalization. Transnational corporations only employ a small portion of the world's labor force, while most citizens of the developing counties are still relying on crops, plantations and other natural resources. These are the farmers, fishermen, and estate workers whose wages are highly depending on their day-to-day gains. Globalization brings a huge threat for these groups of workers which can cause them to lose their source of income. There are two major impact of globalization create negative impact to these workers. First is the fact that barriers of trade are being reduced or eliminated as a result of trade agreements that drives globalization. Without barriers of trade, there will be less restriction for big companies from all over the world to enter the local market, and thus less restriction that can protect local business owners. These local business owners are now facing direct competition from powerful international companies, especially those in agriculture and textile industries. It is very likely that local business owners are not the winning team in this case as the big international companies naturally will have the capital, resources, and also influence to win the market thus putting local business owners out of job. Secondly, the competition between the big companies themselves also poses as a threat for crop and plantation workers. In order to be able to provide competitive prices on their end products, manufacturers are investing on cost cutting activities and technologies. The concept is generally to move towards full automation where direct labors are to be replaced with machineries, in the attempt of eliminating the risk of human dependence and reducing expenses for employees' pay and benefits. With the rapid technology advancement that we are seeing today, more and more human roles are being replaced by computers, machines, and robots. As a result, less farmers, plantation workers, and factory operators are needed as high speed and high capacity technologies are introduced in the industry.

In reality, globalization actually brings more threats of employment for developing countries. Furthermore, as locals are losing job, the desperation of securing a job increases, eliminating their command of higher wages.

Question 3

How does globalization influence cultures? Highlight both the positive and negative effects.

As we already know, globalization is where the world is becoming borderless in terms of communication system, transportation system, information system, and technology advancements. With such concept, these systems are being standardized throughout the universe thus heightened the exchange and transfer of products, information, people, and cultures. Additionally, globalization also brings in many other external forces and influences into the local environment from technology, political, economic, and also social standpoints. .

Looking into the change in the economic environment, globalization also promotes international trade in cultural products and services, such as movies, music, and publications. The expansion of trade in cultural products is increasing the exposure of all societies to foreign cultures. Additionally, the exposure to foreign cultural goods frequently brings about changes in local cultures, values, and traditions. However, whether the exposure has positive or negative effects is subjective on the characteristics of the local culture and the influencing foreign culture. For example, in Asian cultures husbands are known as the bread winner or sole provider for the household while wives or females are known as the home maker. However, with the integration of western cultures brought in through globalization, gender equality is integrated in many cultures. Nowadays, the idea of women being the household provider is being accepted and dual-income household has become more common in the Asian society. This change of culture can be seen to have a positive effect as it helps to boost the economy, increase purchasing power, and also improve the standards of living. On the other hand, it may also be seen to have a negative effect as women are becoming too focused on careers and less family oriented.

The entrance of foreign companies and transnational corporations into the market offers more job opportunities for the locals. As they are being employed by foreign organizations, they are also instilled with the culture within the organization through working concepts, company values, and work ethics. Although the organization culture may also differ depending on the origin of the organization, these big organizations commonly conduct company rules that educate and discipline employees, shaping organized group of workers and thus influencing and integrating the organization' cultures the local culture. In this point of view, we can classify the effect of international organization's culture as one of the positive impacts of globalization.

As mentioned earlier, globalization not only encourages the movement of products, but it promotes travelling of people as well. Some of the main factors for the rapid increase of people movement are the information system, communication system, and technological system advancement that allow more opportunity for tourism and migration. The increase of foreign investors also contributed to the rising numbers of immigrants and expatriates, bringing their culture of origin into the local scene. Nowadays if we take a look at the cities in many countries, we can see clearly the integration of cultures. For example, we can easily find Italian or Japanese restaurants within the city, find Korean or French language classes, or watch a Chinese guy eating rice on banana leaf with his bare hands. All of these are the results of cultural integration and acceptance. Inter-racial marriages are also one of the cultural effects of globalization that we are seeing today. Although some believe that such fusion of culture may cause them to lose the cultural identity of their origins, personally, I believe these integration is a positive effect of globalization where people are accepting each others' uniqueness. Furthermore, I believe it will help to reduce, if not eliminate, racism.

In term of education approach, students are being more exposed to the acceptance of global culture. In addition to exchange student programs, cultural studies have become one of the common subjects in higher education institutions. This indicates that we are accepting the cultural influences and preparing ourselves in utilizing its potentials.