Globalization: Trends and Perspectives by Houston, Bishop, Reinke, and Adam - Article Example

Globalization: Trends and Perspectives Name Institution Course Date Article Analyais: Globalization: Trends and Perspectives Introduction Globalization has brought about different changes over the last year. Different countries now do trade freely without the restrictions that existed in the past. However, due to the internationalization of economy, governments of participative countries need to increase regulation. Globalization can be defined as the integration of countries that has led to the free flow of trade, people, and ideas from one country to another. Globalization has brought about both positive and negative changes. For instance, globalization has brought about technological innovation in developing countries due to quick and easier movement of ideas. It has led to improved communication which has brought different cultures and businesses together. In addition, globalization has expanded into human rights, environment as well as national security. This has resulted to a shift of policy-making choices that has ensured the coming together and the growth in size and importance of the political institutions of different countries. This paper will review the article, Globalization: trends and perspectives, that is written by Houston S., bishop T., Reinke J., and Adam T. This article was published in 2011 and offers information about the history of globalization, perspectives of globalization, effects of globalization and the recommendations for future improvement. History of Globalization Globalization commenced when the world became interconnected at the start of human history. Trading activities also started when European explorers started trading on their voyages abroad. These trading activities opened up and thus countries traded in various commodities which eventually formed various trading companies within different countries which led to the start of the international trade. After the World War I, the Suez Canal together with a number of railroads was accessible which minimized the travel time of goods between Europe and Asia. These drastically increased the levels of trade taking place thus many countries joined in the competition which promoted international trade. During the end of World War II and the Great Depression, the United States raised their trade with other countries although increased productivity was seen later in the 1970s. During this time, most financial markets became liberalized and thus various nations have become more globalized. All the three channels of capital which are inclusive of sales, finance and production were highly internationalized due to rapid increase in technology as well as the liberalization of governmental trade policies. Trends of Globalization Increase in Technology and Transportation Globalization always does hand in hand with the increase in technology as well as the convenience brought about by improved transportation. Improvement in technology has made it easier for individuals to communicate from one nation to the other and thus reduced the cost of transportation. Transportation is considered a pro-active aspect of globalization and thus continuously gets extra benefits as it improves. Globalized transportation has thus become quite profitable over the years which have led to the initiation of additional research as well as a vast transportation technology. Furthermore, transportation is one of the chief factors that minimizes international trade barriers and thus assists in marketing technology internationally. In addition, digital revolution has significantly increased the rate of globalization through the use of emails, videoconferences and telephones to name a few. This has made it easier for business representatives in different nation conduct business activities at their own convenience. Therefore, Renn (2012) agrees that the introduction of new technology clearly indicated how crippled the financial market regulations were which eventually led to the increase in communication technology leading to a significant decrease in the cost of international trade. Liberalization of Governmental Trade Policies The government has a huge position in internationalization by setting standards for global trade as well as monitoring the arrangement for universal trade and at the same time determining the privatization of various sectors. If the government is capable of facilitating investment, therefore, the nation involved is considered globalized. Kotilainen and Kaitila (2002) strongly disagrees with this point because globalization does not necessary depend on the ability of the nation to facilitate investment but rather depends on whether the nation can incorporate international policies within their borders. In addition, the chief role of the government ought to be developing an effective trading place by offering a superior arrangement of corporate governance, offering a stable economic model as well as offering a supply-side elasticity at a micro level. Furthermore, in order to facilitate a similar trade regulation across participating nations, governments have to converge. These trade liberalization policies are required to open up trade throughout the globe and thus heighten economic growth. Increase in the Inequalities among Nations Globalization has been the main factor of increase inequalities of various nations. The rich nations continue to get rich whereas the poor nations languish in poverty. Gwartner, Holcombe and Lawson (2004) agree that the growth rates of nations have a huge impact on the international commerce which is predicted to grow progressively for those nations. Gwartner, Holcombe and Lawson (2004) also agree that poor nations will also benefit from globalization due to the rise in reduction of trade borders all over the world. These kinds of reforms comprises of developing macroeconomic as well as fiscal stability and making trade regimes easier. Therefore, these reforms assist countries to incorporate into the global community with ease and thus minimize the inequality that exists between the United States and nations already incorporated into the international marketplace. In addition, nations that are willing to incorporate towards globalization ought to develop local conditions which will effectively complement its integration. Some of these conditions include: developing an efficient and constant financial market, creating quality organizations and developing human capital. Although, Renn (2012) disagrees that internationalization has the prospects of benefiting every nation since it has failed to do so. In addition, nations that are at the helm of international politics as well as economics have ensured that their own wealth gets collected and their power is well protected. Income Inequalities between Citizens of a Single Nation Globalization has resulted to an increase in labour inequality among citizens of a one country. Increased globalization may anguish the incomes of both the unskilled workforce as well as the semi-skilled workers. In addition, the gap between the upper and lower class citizens is constantly rising every year. Banerjee, Carter ad Clegg (2009) agrees that other than globalization, technological changes have played a huge role in the high rates of income inequalities. The working conditions for both the unskilled as well as the skilled workforce are increasingly varying with technology. Therefore, income inequalities arise since the unskilled workforce has not sufficient knowledge of technology resulting in less pay. This increases the rate of income inequalities within a nation. Perspectives of Globalization The Hyper-globalist Perspective This perspective highlights that economics have come together to build a new relationship where different countries are economically and politically united. In order to form a globalized world, countries should join together in both these aspects. Nations that are not joining together are left behind and do not enjoy the benefits of globalization. According to this perspective, the world economy is controlled by the industry, trading and financial market place rather than the government. What globalization has done is to weaken the ability of the governments to control the economy since they are forced to come together and obey rules that they may not agree with. Some scholars argue that it will be very difficult for governments to come together due to their difference in how they view laws and regulation. Renn (2012) agrees with the article that although globalization has taken over almost all aspects of countries, it is impossible for governments to come together and form a global governance system. The Sceptical Perspective This perspective argues that globalization process is more separated and does not bring about a truly global world. Sceptical perspective does not agree with the fact that there is the development of global culture as a result of globalization. Although the world is globalizing at a faster rate, different regions are globalizing together. The world is not necessarily forming a single market but rather, globalization only brings about the expansion of regional economic sectors as well as cooperation of global trade. This perspective supports the notion that strong country is required in order regulate the operation of global economy and facilitate trade. These strong nations often regulate global economy and trade between developing countries with poor government system. Generally, sceptical perspective supports the notion of a globalized world but argues that globalization starts on a regional basis before mitigating to a globalized economy. The Transformationalist Perspective This perspective is totally different from the other two since it argues that there is no market or economic sense behind globalization. It is believed that globalization is just a concept that has slowly progressed over the years. In addition, transformationalists argue that the outcome of the development of globalization is not determined. According to this perspective, globalization is unknown concept and the changes brought about by it cannot by quantified. The factors influencing globalization are greater and bring about uncertain results. Other Perspectives In addition to the three perspectives of globalization, there are other scholars who believe that globalization is not occurring. They argue that, there is no globalization taking place, instead, the world is experiencing increased in growth of international economy. Banerjee, Cater and Clegg (2009) concurs with this concept arguing that there is no strong support system that can back up this kind of global movement. Theories of Globalization Three theories of globalization include the neoclassical growth theory, endogenous growth theory and dependency approach theory. According to neoclassical growth theory, countries have joined together due in part to the increased flow of assets and capital around the world. On the other hand, the endogenous growth theory highlights that globalization causes a small amount of convergence or divergence due to the availability of a larger return on advancement of technology in globalized countries. The dependency approach theory highlights that there is an occurrence of divergence as a result of the different levels of benefits enjoyed by each country due to different distribution of wealth. Is globalization Reversible? Scholars argues that if globalization is allowed to go the way it is going, there will be adverse outcomes that may damage nations especially those with poor governance system. Although globalization brings about many benefits, there is a still problem of poverty and inequality. It is clear that globalization is both advantageous and disadvantageous. African countries are suffering because of globalization as it has damaged export and farming. In order to reverse the adverse effects of globalization there is need to focus on gender equality, community empowerment, increasing employment and enhancing cultural identity. In addition, governmental and non-governmental bodies should form a deeper partnership in order to build and implement an effective system of governance. There is also a need for sustainable developing and fair rules in all levels of social, political, economic and environmental application. In addition, Renn (2012) offers additional recommendations to reduce the negative effects of globalization. Non-governmental bodies should provide a large range of expertise aimed at providing aid to globalization in the developing countries. Their contribution should greatly involve lending. This can help in distribution of funds to the developing countries which will give small business enterprises the opportunity to kick-start encouraging globalization. Conclusion To sum up the article analysis, it has been found that globalization has entirely changed over the past three decades and has thus transformed hoe countries conduct their business activities globally. Globalization has since skyrocketed due to the rise in technological advancement and liberalization of governmental policies. The extreme rise in internationalization has resulted in a rise in inequality among nations and also a drastic rise in inequalities among citizens within a certain nation. There are three fundamental perspectives on internationalization within literature nowadays. Every perspective bears its own vantage points on the reasons behind globalization, how globalization affects nations and also the future of globalization. In addition, there are various concepts of globalization that ought to be realized that it is vital to bear a clear understanding of both the trends as well as the perspectives of globalization in order to understand its impacts on the business world as well as the society. References Banerjee, S.B., Carter, C. and Clegg, S 2009, ‘Managing Globalization’, in M. Alvesson, T. Bridgman and H. Willmott (eds.) The Oxford Handbook of Critical Management Studies. Oxford: Oxford University Press. Bishop T., Houston S., Reinke, J and Adams, T 2011, Globalization: Trends and Perspectives, Journal of International Business Research, Vol. 10. p. 117-130 Gwartney, J. D., R. G. Holcombe, & R. A. Lawson 2004, Economic Freedom, Institutional Quality and Cross-Country Differences In Income and Growth. Cato Journal, v. 24: p. 205-233. Kotilainen, M & Kaitila, V 2002, Economic Globalization in Developing Countries, The journal of Economic in Developing Countries, pp 70. Renn, J 2012, The globalization of knowledge in history : based on the 97th Dahlem Workshop. Berlin: Ed. Open Access. Read More