The Effects of Globalization on the Non-Profit and For-Profit Organizations - Coursework Example

Globalization The term “globalization” gained popularity in the late 1980s, and rapidly became the new buzz-world in the business world. Commentators use the term to refer to recent important changes in the global economy; particularly the changes in transportation and technology, as well as increased internationalization of commodity flow and financial flow and transition of the global market as the main competitive arena. This paper evaluates the effects of globalization on both the non-profit and for-profit organizations, arguing that globalization creates a new organizational style. Nonetheless, the process has numerous benefits, which is beyond the scope of the paper. The main emphasis of the paper is the erosion of sovereignty of nation states and the subsequent changes in their roles. In recent decades, the globalization process has defined the development of the global economy. Essentially, globalization affects the world now, while its impacts steadily grow stronger. Furthermore, economic spheres do not limit the impacts of globalization. Even though the globalization process emerged due to growing economic cooperation between countries, economic integration of countries continues to contribute to cultural and political integration now. Consequently, countries begin to form international unions and alliances, such as the European Union, which disregard national barriers. Furthermore, the number of international organizations that facilitate cultural, political, and economic relations between countries continues to grow steadily. Conversely, the process of globalization affects the development of both the country and the company. This paper seeks to identify globalization as an issue affecting both non-profit and for-profit sectors (Chen and Tain-Jy, 2008). The paper analyzes the effects of globalization on the organization as well as the mother country of the globalized organization. Regardless of whether we consider it as a concept or a fact, people swallow and chew up globalization a lot. According to one author, no speeches prior to 2000 ended with reference to globalization. Interestingly, different sets of definition of globalization exist, largely depending on the ideologies and standpoints of those concerned. Some commentators argue that the process of globalization is a new form of capitalism. Others refer to globalization as the convergence of politics and economics across various borders into a single dominant model, particularly a liberal capitalism with neo-liberal politics. Yet others interpret such developments as leading to a world polity, a world economy, and possibly a culture (Clougherty, 2007). In other words, globalization refers to the emergence of a new world society. Generally, globalization refers to the process of circulation of capital and extension of information with disregard to obstacles. The process affects all aspects of the world, including policies, culture, national boundaries, actors, institution, and others. The central focus of globalization, which significantly affects various social life dynamics, is the state nation. On one hand, the sovereignty of states is narrowed, while on the other hand, their responsibilities, functions, and functioning was redefined. In other words, the state does not strictly regulate trade and other national undertakings, leaving them under the control of market forces. With deregulation and privatization, the role of the state in distribution, accumulation, and production became weak while its regulatory role became more profound (Clark and Lynette, 2008). This transformation signifies the transition of the state from an interventionist to an arbitrator or regulator. However, the transformation did not only propagate the transition of the state and its socio-economic functions, but also its institutional functioning and organization, the judicial rules, personnel regime, and the conceptualization of public services into a transformation process. Alternatively, we may consider this process as a change from the conventional public administration to new public management. The new public management perceives the public sector in similar perspective to the private sector, thus the possible integration of operational techniques and values to the public sector. In other words, the new management system promotes for the treatment of citizens like customers, flaking public administrators from the conventional public policy process, and effectively convincing both parties that the state government is simply a business within the public sector setting (Chen and Tain-Jy, 2008). According to a scholar, creation of new legal practices and regimes accompanies globalization. Furthermore, the process also results to renovation and expansion of older forms that sidesteps national legal systems. As far as elimination of transnational commercial disputes is concerned, the national legislation roles were receded despite the growing significance of international commercial arbitration hubs. We may describe this development as the privatization of jurisdiction. The most evident indicator of this development is the rising number of international commercial arbitration hubs, which has risen significantly over the past few years. Conversely, countries with separate jurisdiction order regulating public administration experience serious erosion on the dependence of public administration on administrative law and have a transformed administrative law. According to some scholars, administrative law appears to transit from its surrogate political process in the global era to one that validates the blend of private and public power, or the use of private power public interests (Jones, 2009). While eroding the sovereignty of states within national borders, the globalization process also modifies the ways of using the existent state authority. We may thus argue that there are two dimension of authority delegation resulting from globalization: delegation at the national level and international level. While the judiciary, political, and economical authorities of the states are delegated to transnational powers, the concerned state is forced to share the existing authorities with other parties. Therefore, the impact of globalization is not only the loss of state corporation power, but also the change in methods and ways of utilizing the remainder of the authority. This transformation is evident in the aspects of new public management and governance. Governance redefines the use of public competence and promotes the use of such authority by both official and unofficial actors, thus giving importance to non-governmental organization roles (Morrissey and Igor, 2010). The new public management perceives delivery of public services as a technical issue rather than integrating concepts like conformity to law, and public interest. It advocates for management related concepts such as customer preference, productivity, and profitability. In this sense, both the new public management and governance lead to elimination of the political element in public services and their subsequent reduction to technical activities. The changes in the role of the state lie beneath the transformation effect of the globalization process. As sovereignty erosion occurs, the state becomes the major player that materializes the transformations appropriate to the demand of globalization (Jones, 2009). In the global era, the primary function of the state is to secure the function of market mechanisms. Indeed, the state ensures that the legal and structural mechanisms based on the conceptualization of the welfare and social state adapt to the new function. The emergences of new institution that provide the functionality of the market mechanism reflect the transformation of the administrative structure of the states. This explains why in most states in European countries, especially Turkey, are under pressure from the reducing market benefits, but continue to expand their institutional structure in efforts to promote a healthy and secure competition environment (Clark and Lynette, 2008). Subsequently, the regulatory agencies are taking over as the model organization in the global era. The pioneer of these model agencies is Interstate Commerce Commission, which is an independent establishment from the executive body, formed in late nineteenth century. When analyzing their organization, functioning, and vis-à-vis status of their executive body, these regulatory agencies perfectly fit the requirement of globalization. Their variance anatomy from executive body, independence from strict rules, staff capability and outstanding budgetary, and the regular representation of interest groups makes them compatible for new public management and governance approach. Another alternative approach to assess the effects of globalization on states and associated corporation is to analyze the regionalization impact of the process. As organizations go global, contemporary economically significant regions will emerge. This process of regionalization will progressively decrease the significance of nation states. In other words, their traditional prospects will weaken and become irrelevant to the objective reality of future global economy (Chen and Tain-Jy, 2008). The fact that states can establish trading blocs and influence the economic development of a country now than in the future means that the role of regions may outweigh the significance of states and trading blocs. In reality, development of protectionist policies between states will be irrelevant as the world currently enjoys from the non-existence of fiscal barriers between countries. In cases when national economies are open and lack any form of fiscal policy protection, it will be logical to conclude that such regions are economically developed or that they have a larger economic potential to develop faster than other depreciating regions. Many other factors may influence the economic development of trading blocs and regions, including educational and intellectual potential, cost, and qualification of the local labor force, and natural costs (Clougherty, 2007). Nonetheless, globalization has a significant effect on the private and public sector, though the former seems to experience the greater disadvantage. Due to the natural shift on corporate level affects the role of states, which changes significantly. In essence, globalization creates a new style of organization, which affects both profit and non-profit organization. References Chen, H. and Tain-Jy, C. (2008) ‘Governance Structures in Strategic Alliances: Transaction Cost versus Resource-Based Perspective’, Journal of World Business, 38 (1): 1-14. Clark, T. and Lynette L. (2008) ‘Global Myopia: Globalization Theory in International Business’, Journal of International Management, 9: 361-72. Clougherty, A. (2007) ‘Globalization and the Autonomy of Domestic Competition Policy: An Empirical Test on the World Airline Industry’, Journal of International Business Studies, 32 (3): 459-78. Jones, T. (2009) ‘Globalization and Organizational Restructuring: A Strategic Perspective’, Thunderbird International Business Review, 44 (3): 325-51. Morrissey, O. and Igor F. (2010) ‘Globalisation and Trade: The Implications for Exports from Marginalized Economies’, Journal of Development Studies, 7 (2): 1-12. Read More