Globalization and Its Costs and Benefits - Literature review Example

Running head: Globalization and its costs and benefits Student’s name Institution Course Professor Date What do you understand by the term ‘Globalization?’ Held and McGrew (2003) denotes globalization as a shift of transformation in a scale of human social organization that creates linkage between distant communities and expands reach of power relations across the world’s major regions and continents. Globalization entails the expansion flows of materials objects and symbols around the world and the proliferation of institutions and organizations of global reach that will allow such flows (Lechner & Boli, 2008). For instance, these processes embody a transformation in the spatial organization of social relations and transactions that eventually generates transcontinental and interregional flows and networks of activity, interaction and power, (Held, 1999). Globalization encompasses a variety of trends in the economic, social and cultural spheres which can be explained as increasing and intensified flows between countries of ideas, information, people, goods and services that give rise to cross-border integration of social, economic and cultural activities. Among the driving forces of globalization are; trade and investment liberalization, global social networks, entrepreneurship, technological innovation and reduction of communication costs. The rapid expansion of international trade, capital market flows and foreign direct investment have characterized the economic globalization process. It has guarantee spread of communication, transportation and commercial networks all over the word which has later facilitated the globalization of economic, social and political forces (Thomas, 2005). The processes of globalization are deemed to be associated with a boost in density and depth of economic and social interdependencies and international interactions (Dale, 2000). Robinson,(2003) argued that globalization ought to be considered at all levels since it is the underlying structural dynamics that drives political, social, economic and cultural processes around the entire world. What are the benefits and the costs of Globalization? They are several gains that can be derived from the advent to globalization in our society. Process of globalization has affected many perspective of human life around the globe. Some of the benefits include; better allocation of resources, greater access to foreign goods and services and higher output and living standards. Economic, political and cultural forms of globalization have had significant consequences on the society. For instance, with the advances of technology, transport and communication generally entails the integration of capitalist economies, assimilation of social attitudes and incorporation of global regimes (Lechner & Boli, 2008). Advances in information and communication technology and in transportation have contributed to immense movement of people and quick diffusion of information. Consequently it resulted to convergence of cultural, linguistic, ideological paradigms and patterns all over the world. Technology divide has a consequence on how globalization affects the economic well-being of different states. David (2002) defines it as the process of harmonizing the diverse cultures and beliefs in the world. Culture to the local people gives them a sense of dignity, continuity and security. While global culture has products and symbols that are able to penetrate both local and international markets, their ideologies of freedom and consumer choice have allowed the different use and interpretation of standardized consumption patterns (Agrawal & Ebrary, 2008). With globalization the modern world has been greatly transformed especially when vast economies became independent to each other. In other cases several ideas could be flown quickly among varied cultures throughout the world (Boli, 2005). Moreover globalization ensured that individual freedom was enhanced together with revitalization of cultures and other related cultural artifacts especially through foreign markets, influences and technologies (Bhawuk, 2008). It champions for greater integration across the national borders and a powerful force for both growth and development. There is a growth in competition on a global scale due to globalization which has ultimately led to an increase in production and efficiency. The widening of markets and competition has contributed to specialization and division of labour. Rationalization of production on a global basis did expand productivity (Bhawuk, 2008). Improvement in technological spheres did contribute to instantaneous communication that accompanied massive diffusion of information technology that affected styles of politics, culture and social organizations. Technological growth resulted in explosive growth of information exchange through the internet and the expansion of education opportunities and creation of transnational social networks. There has been continual innovation globally due to the spread of technology and competitive pressure. There are huge potential for economic growth due to foreign direct investment, huge economic openness and transfer of technologies across different regions in the world. The free trade guaranteed specialization among the different regions thus able to produce according to their own competitive and sustained advantages (Duru and Ogbonnaya, 2010). The opened economic opportunities by globalization process allowed the free flow of foreign capital, technology and movement especially from the multinational corporations to host corporations and entrepreneurs. Technological innovation together with a decline in transportation costs have expanded the volume of trade and financial flows and also acceleration of economic transactions because of reduced time and methods of delivery and payment systems of both goods and services (Krugman,1994). Due to greater competition among the firms, many customers have benefitted in terms access of products at lower prices. Sen, (2001) alludes that eradication of poverty has been witnessed due to increased economic integration and the use of technology. There has been positive, innovative and dynamic aspects such as increased markets access, increase access to technology and information and increased access to capital due to globalization with has contributed to more income and employment opportunities. Tomlinson (2003) strongly argued that globalization proliferate identities as oppose to destroying them since identity was not the power that could oppose globalization from taking place. The government polices involved in the regulation of advance of economic globalization; such as movement of people, goods and ideas ensured that cultural freedoms were promoted at all costs (Volkman, 2006). Through commerce, travel and media many people have been exposed to varied foreign cultures. However, globalization of the marketplace did not imply the homogenization of world culture (Hollis, 2010). Instead it led to greater diversity and differentiation of cultures that culminated in greater understanding of diverse cultures, organizations and institutions around the world. Alternatively, media can take a constructive role in the promotion and preservation of local identity (Volkman, 2006). The rise of globalization through internet, mass media, supranational organizations and ease of travel have allowed the even spread of liberal democratic values and human rights and the growth of global civil society is nurtured effectively. Indeed these cultural flows transformed the politics of national identity and the politics of identity more generally (Held &McGrew, 2003).One–on-one and physical interactions has been boasted thus leading to increase opportunity for learning from diverse sources and having diverse content outside the usual traditional education programs (Stromquist & Monkman, 2000).Many workers compete for the limited good jobs that globalization has created; this increased the demand for education expansion. This phenomenon holds that capitalism, trade and technological revolutions can transform the world by doing away with the old obstacles and the mind-sets. It has huge impact on the country’s social reforms, for instance the education sectors that try to adjust to the current global environments that are featured by diversity, flexibility and increased competition. Costs related to globalization There are negative and marginalizing aspects of globalization that has been witnessed during this period of time. For instance, this era of globalization has been comprehended to increase inequality within and among the states, it threaten the employment of unskilled and illiterate workforce and their standards of living thus contributing to poverty increase and also disempowerment of the weak (Hamilton,2008). There is unbalanced distribution of benefits both within and between the states. It has been termed as a threat to social cohesion especially with the advancement of untied capitalism that can undermine the welfare state. Issues of intellectual property rights and use of anti-dumping practices in the era of globalization discriminate producers especially in the developing states. Sulbrandt, (2000), argued that globalization encompasses a complex decision making processes that occurs under varied levels such as sub-national, national and global thus leading to multi-layered system of governance. For instance, national decision making processes are greatly affected by greater independence and social interdependence due to globalization. Furthermore, globalization has been claimed that it disintegrates the national communities because of compromising the ability of the government to control the internal economic, political and social conditions (Bhawuk, 2008). This phenomenon too, has increased the economic inequality both within and between the national communities and also eroded the severity of states and national identities. The process of globalization can disrupt the fragile society and the traditional identities. The newest sinew of globalization; the information and communication technology revolution has created a gap called the “digital divide” (Hamilton, 2008). Also, financial volatility has been identified as one of the negative aspects of globalization. This financial volatility has become a permanent feature in the global integrated markets. For example, the growth in international capital flows has been accompanied by an increased in financial crises such as Asian crisis. The human development has been hampered due to poverty increase, increased social stress and fragmentation, increase in unemployment rate and reduced public services (Bhawuk, 2008). Due to widened and deepen information flows and contacts among the global people have increased the opportunities for crime, disease and loss of cultural identity. The flow of culture and cultural products has contributed to homogenization of world culture. The cultural and religious support of the society such as traditions and way of life has been threatened by globalization process (Hamilton, 2008). The internationalization of cross-borders problems for example terrorism, drug and human trafficking have been witnessed due to advent of globalization. The rapid communication of information and intense movement of population have been responsible for eroding the already established national identities (Agrawal & Ebrary, 2008). For instance, those communities who have been economically disadvantaged felt isolated from their traditional communities due to increased immigration. Generally, it impacts the negatively, for instance it undermine the democratic process and the power of state while over-burdening the ability of the state to handle efficiently both international and computer-based crimes and effectively regulate and protect the environment (Hamilton, 2008). Improved global economic competition made nation state to focus on economic policies that heightened global competitiveness at the expense of national policies that could stabilized domestic political economy and social cohesion. Indeed, it forced the government to focus in economic growth promotion rather than engage itself in protection of national identity (Agrawal & Ebrary, 2008). What are the key challenges posed by Globalization for National Governments? The process of globalization and its related market forces have been designed properly so that it can be an inclusive force for both human-oriented and sustainable development. The national governments, the private sector and the international financial organizations play a crucial role in a cooperative manner such that globalization work can benefit the poor and less disadvantaged people in the society in a spirit of partnership (Pizzuti &Franzini, 2001). The national government is task with upholding the free trade and supports the reduction of trade barriers which could eventually lead to liberalization of services and capital flows. In order to take advantages of globalization, the national governments must provide to its citizen with quality education, infrastructure, information and communication technologies and health care (Pizzuti &Franzini, 2001). However the government is faced with great challenges in securing these services for its citizens. For instance, a national government with weak State institutions and insufficient social policies may have difficulties in this globalizing world. Problems that are transnational in nature such as environmental pollution, organized crime, terrorism, poverty and economic crises posed a challenge to the national government during this era of globalization. The state is required to improve its capacity so that it can deal with greater openness in the face of globalization (Agrawal & Ebrary, 2008). There is a need to improve the well-being of its citizens and proper management of both social and economic development in the country. The national government is task to come up with appropriates social and economic policies with a view to capture the global opportunities trade, migration and capital flows and able to protect its citizen against the vulnerabilities that comes with globalization process (Pizzuti &Franzini, 2001). According to Strange (1997) noted that with globalization, the national government are able to lose their control of national economic policies and their economic future to multi-national corporations. Since, it is no longer in control of the spread of capital, technology, labour, trade, ideas and ownership of the economic assets. Consequently, the national government need to be involved in the following areas; funds national welfare systems, provides structures for popular representation, institute public accountability and also ensure both internal and external security (Agrawal & Ebrary, 2008). Furthermore, the state is faced with the problem of coordinating its policies and responses to the impacts of globalization so that it can effectively ensure economic growth, stability and security within its borders. The process of globalization does influence the entire world in varied ways, for example it can increase inequality and incidences of chaos and disorder. How has Globalization impacted on the organization in which you work or are most familiar? Both the banking and financial sectors of the economy have taken advantage of the opportunities that comes with the globalization. They have been able to operate in an efficient, effective and transparent way, thus able to keep inflation down and facilitate investments due to a sound monetary policy. In the face of globalization, the financial markets have been made open, more liquid and more integrated that before. The global financial crisis made the national financial systems to be vulnerable to its effects (Pizzuti &Franzini, 2001). Stronger standards of accounting together with prudential regulation and disclosure could save the day. In this globalized age, the financial institutions in order to survive and succeed in their activities then they have to cultivate strategic partnerships with a view to become competitive to their diverse customers. These sectors have had diverse privileges of expanding their business to global markets due to globalization. Conclusion The national government has a crucial role to strengthen the state institutions and the social welfare in this era of globalization. In instances where the state is exposed to external risks, it may require a higher level of social protection. A nation is deemed to benefit from globalization and greater openness to the global economy with the availability of firm democratic institutions that can benefit its citizen through fair redistribution of gains from investment, open trade and technological transfers. The state need to be involved effectively in facilitating the labour mobility, bridging out the socio-economic inequalities while at the same time curtail international crime and terrorism. The national policies should strive to reconcile human resource development and globalization process to achieve sufficient impact on development since the openness of trade will expand the returns and new opportunities References Agrawal, U., & Ebrary, I. (2008). Globalization poverty and culture. New Delhi: Global media Anheier, P. H. K., Isar, P. Y. R., & EBL Ebook Library. (2010). Cultures and globalization. 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