Effects or Impacts of Globalization - Coursework Example

Business Name: Course: Tutor: Date: Globalization Globalization means the relationships between people, culture and economic activity that are increasing globally. In general, it refers to global circulation of the production of services and products through the reduction of such barriers as export fees, tariffs and import quotas. Globalization contributes to the economy of any country. It also means circulation of culture, ideas and languages across the globe. Globalization has manifold dimensions such as health, security, economic, cultural, environmental, political, and social. A combination of globalization with change usually affects development of economies in a country. Globalization is the rapid growth and ever-increasing interdependencies and interconnections of networks that often characterize the way of life in the modern day. It has seen the increase in exchanges and trade all over the world, resulting in an international integrated, open, and borderless economy. Growth has been evident in many countries through exchanges of capital, people, currencies and technology. Globalization has several features, but the most common ones are widening and deepening of capital flows in an international perspective, internationalization of production and international trade expansion. Technological advances have seen a decrease in the costs of communication and transportation. It has also seen the decline of information processing costs, and data storage and retrieval (Intriligator, 2003, p. 2). Global village This is where everyone around the world experiences the same events in a simultaneous way, resulting in the shrinking of all societies so that they appear like one tribe or village (Van Der Bly, 2005, p. 14). Process of globalization A ………....………………………….B Peoples Single World Society There are different kinds of people around the world who undergo a transformation and eventually become a single world community. Economic and trade liberalizations are other sources of globalization. The liberalizations have liberalized the world’s trading system leading to the reduction in trade protection (Intriligator, 2003, p. 3). The process of liberalizations began a long time ago, but the Great depression interrupted it (World War 1 and World War 11). Liberalization has also increased capital movement and production factors that have enabled nations to carry out healthy business. A change in institutions is another source of globalization. Organizations empowerment is due to advanced communications and hence they have had a wider reach due to the changes brought about by technology (Intriligator, 2003, p. 4). The organizations that focused on local markets have extended their focus to international, national and multinational markets. The organizational changes realized have led to an increase in productivity, power and profits. The organizations that are more receptive to change are the main beneficiaries of the benefits. Another source of globalization is the developments in culture. There has been a need to popularize and globalize culture, arts and media. As a result, English language was chosen as a global means of communication. It is always up to an individual to decide whether globalization has had positive or negative effects, but one thing that stands out is the fact that it has brought changes in the world system. It also possesses both challenges and opportunities. Another clear fact is that the institutional, policy, cultural, technological and ideological that led to the emergence of globalization is still highly active today (Intriligator, 2003, p. 6). It is also evident that globalization will be greater in the future due to emerging trends. One outstanding trend that is showing so much growth is the international trade in services. It has shown growth in the financial and telecommunication services. Effects or impacts of globalization Globalization has significantly impacted the world’s economy. It affects the production of both services and goods; it affects employment of human resource, and it affects technology, as well as, investment, which is both human capital and physical capital (Intriligator, 2003, p. 7). The major effects of globalization have been on competition, efficiency and productivity. Economic effects: The level of manufactured goods has increased tremendously since the conception of globalization. For companies to survive in the global business market, they have to keep on upgrading their products and services through the use of technology. This is done with the aim of keeping up with the competition. Globalization is viewed as a positive force that has enabled countries to reduce their poverty line equations. The benefits as well as costs of globalization have had an equal distribution across nations and regions. There has also been a growth in trade services, which include legal, financial, and managerial and information services (Intriligator, 2003, p. 7). Income equality: The number of people living below the poverty has dropped since the inception of globalization; this is according to World Bank figures. Introduction of globalization has seen an increase in income equality within and between nations and regions. Working conditions: Since the inception of globalization, labor policies have been revised in developing countries. This is so because it became an international concern that all human resource should be provided proper working conditions. The policies require that all companies should respect worker and human rights. It also saw a stop to forced labor, child labor and provided a chance for freedom of association. Brain drain: Brain drain has resulted from the fact that workers from poor countries are attracted by opportunities in rich countries. Technological innovation: A major factor in globalization is the new technologies. Competition has seen advancement in the technology sector, and it has penetrated into the nations rapidly through foreign direct investment. The benefits and the costs of globalization Globalization has both negative as well as positive impacts. The positive effects include: Globalization has resulted in the ever growing competition on the basis of the global market. Most companies fear competition but the fact is, it has beneficial effects that could result in increased efficiency or production (Intriligator, 2003, p. 8). Competition enables companies to specialize and also divide labor which leads to increased profits. Competition ensures continued economic growth resulting from reduced prices and costs which make markets conducive for everyone. As for trade, parties involved in the trade benefit from the mutual exchange that takes place between them. The parties could include firms, individuals, nations, trading blocs or continents. If one nation has an opportunity to produce certain goods at a lower cost than another, then it has the possibility of getting all the benefits of trade. If all countries strive to obtain a competitive edge in the market, then it means that all nations can gain from trade. Globalization has continued to assist countries to expand and also achieve higher GDP or high incomes. Those nations that are poor but are more globalized have recorded a high increase in income. This is compared to the poor countries, but less globalized. Globalization has enabled families to make incomes that are high. This means that they are now able to provide proper health care and education for their children. Workers are willing to work so that they obtain the standards of living. Costs of globalization Despite containing several benefits globalization also incurs some costs. The emerging costs could result in several types of conflicts. The conflicts could stem from who should gain from the potential benefits. Equality problems in the distribution of benefits could emerge from nations, individuals, regions or organizations (Intriligator, 2003, p. 9). The benefits realized always spill over to developed nations, individuals or regions which create great inequalities. This could lead to international or national conflicts. The rich nations continue to grow rich while the poor nations slip even further behind. The result will be growing disaffection between nations since the poor will always in a struggle to join the rich nations. Another cost emerging from globalization is that of potential global and national instabilities. The instability could result from interdependencies of the world economies. If one nation has local economic crisis or fluctuations, it could end up being a regional or global impact (Intriligator, 2003, p. 10). Depression or recession in the world could force nations to break the interdependencies realized through the process of globalization. Another cost of globalization is the control of economy on a nationwide basis. Today, some countries feel that their economy is controlled by the powerful multinationals, global firms, nation states or organizations (Intriligator, 2003, p. 11). Some nations could feel that the powerful entities are undermining their national sovereignty. Globalization could make some leaders feel that they are helpless and that they are overpowered by the global grips. A minor cost is the unemployment caused by globalization. The introduction of machines performing the same work as humans has led to loss of jobs for people (Intriligator, 2003, p. 11). The implications are, however, minor compared to the benefits achieved fro globalization. A non economic effect of globalization is that of security. Globalization has got negative effects that could result in conflicts. The conflicts can be on an international basis, and the issue of security can be jeopardized. The key challenges posed by globalization for national governments The challenge of governments lies substantially in the global governance reforms. This should be done so that free market approaches and global competition are harmonized both with human rights and human development in nations (Monsod, 2000, p.8). If a country does not have excellent local governance, then it may not benefit from globalization no matter how reliable global governance it possesses. Appropriate social and economic policies are necessary at a national level. The policies aim at capturing capital flows and migration, protecting people from vulnerabilities created by globalization and capturing global trade opportunities. National governments should be able to manage capital flows as well trade very carefully. The governments should also foster small enterprises, manage new technology and invest in human capital (Monsod, 2000, p. 8). All the above requirements are already a tall order for governments. This is so because governments face resource shortages. The governments realize reduced revenues due to low import duties, low tariffs, growth of informal economies and globalization of the tax base. This is a considerable challenge to the governments as it also faces demands on public resources that are great. At the global and national level, the challenge faced by governments lies in the reduction of threats of financial volatility (Monsod, 2000, p. 8). The result of governance failures usually results in substantial losses. Human costs include unemployment, more crime, erosion of the social fabric, more violence in households, and decline in school turn out and civil conflict. At the international level, the challenge will be to strengthen international action that will be able to regulate as well as supervise the banking system, develop systems useful in the management of crisis and establish systems that will a last resort of anything else fails. Globalization has had an impact on women. When economic inflation occurs, women are always the first to lose their jobs. Informal subcontracting has risen significantly since globalization came to being, and women predominate in this (Monsod, 2000, p. 5). The conditions of working in such situations are poor and the pay is low. The challenge is, therefore, on the side of the government to create equal employment opportunities for both men and women so that there is no gender parity. Another key challenge is to obtain a sustainable economy with the ability to grow. The sustainable economy will enable the market economies established, to function more efficiently and effectively (Mrak, 2000, p. 35). The national governments should be able to address such issues as investing in both infrastructure and education, redesigning of the state’s role, and improvement in the governance of both financial sectors and enterprises. The governments will have to come up with rules which include credibility, openness and transparency and eliminate such issues as corruption and bureaucracy. The interference will be reduced when such issues are avoided. The rules formulated will provide a conducive environment that will enable efficient functioning of the market forces (Mrak, 2000, p. 36). Perceptions of risks should be reduced to encourage investment opportunities. A sound investment climate will result in appreciable economic performance leading to increased productivity and profits. How globalization has, impacted on the organization in which I work in or are most familiar. Globalization has impacted or affected all organizations from agriculture, tourism to health care. Inclusion of technology in organizations has brought about permanent change in the structures of the organization in the field of human resource (Fisher, 2009, p.4). Technology has enabled the integration of payroll and human resource which often offers administration benefits to any given organization. Before the inception of globalization, organizations always considered their market and customer base to be their country or nation of origin (Ganly, 2010). Through globalization, an organization through its management now has the whole world as their market and customers. Globalization has enabled organizations to expand across the world which also leads to increased production. Globalization has also had an impact in the management of companies since most of its employees transfer to international countries (Ganly, 2010). Because of this, the organizations have had a need to improve their forms of communication and management. The organizations should also consider the needs of those employees in other countries and also offer them relocation compensation. Globalization has helped organizations where competition is concerned. Competition enables the world to open too many opportunities. This will eventually increase the ability of organizations to compete with other businesses all over the world. Before organizations introduced the concept of globalization, they did not encompass a wide range of customers to purchase goods and services produced (Ganly, 2010). The lack of a defined customer base decreased their value. A large customer base enables organizations to achieve their targets. Globalization has also made organizations to be more complex and profitable. Through globalization, leaders are able to obtain skills to make successful globally. Such skills include integrity, commitment, courage, strong business knowledge, sensitivity and awareness (Ganly, 2010). A leader who possesses such skills can be a leader in any country provided a common ground of objectives is formed. Conclusion Globalization is a significant factor in the organization just like change is. There should be global cooperation between nations. This will ensure that global problems are treated well, especially those stemming from globalization. Global partnership will ensure stability and equity in the global world. Equity and stability will lead to increased economic growth for all the rich nations and an economic improvement in the poorer countries. Globalization comes with many challenges, and through the cooperation of nations and countries, ways can be formulated on how mitigate the challenges. Ways to respond to the challenges include: existing international institutions should be strengthened, new institutions should be established and also establishment of entities that are large. References: Branson, M. (1999). Globalization and Its Implications for Civic Education. A paper delivered to the Democracy and the Globalization of Politics and the Economy, International Conference. Germany Fisher, D. 2009. Human Resources in the New World. Globalization, Technology and Outsourcing, Vol. 4, Issue 8. Ganly, S. (2010). The effects of globalization on management and leadership. Intriligator, M. 2003. Globalization of the world economy: potential costs and benefits and a net Assessment. Retrieved 23 March 2012 from Monsod, S. (2000). Globalization: Challenges and Opportunities. Retrieved 23 March 2012 From Mrak, M. 2000. Globalization: Trends, Challenges and Opportunities for Countries in Transition. United Nations, Industrial Development Organization. Retrieved 23 March 2012 From Vaira, M. (2004). Globalization and Higher Education Organizational Change: A Framework for Analysis. Netherlands: Kluwer Academic Publishers. Van Der Bly, M. (2005). Globalization: A Triumph of Ambiguity. Current Sociology, vol. 53, no. 875. Read More