Globalization and Its Impact on Sustainability - Coursework Example

Globalization and its impact on sustainability of Introduction The world is increasingly compacting into a boundary less global village with minimum or negligible economic or national barriers in terms of movement of resources, trade and culture. Globalization is considered as one of the major global innovation which involves participation and cooperation from almost all the countries worldwide. Globalization is often considered as interplay of trade, market, technology and resources (Crafts, 2000). Essentially, it is based on the traditional theories related marketing and exchange. The trend of globalization can be recent in nature but authors traced it back to the late Middle Ages in the Europe. It was further gathered that the pre-modern societies significantly incorporated factors such as localization and decentralization in their activities which are also characteristics of globalization (The Economic Times, 2008). In this context, the paper defines globalization and compare and contrast it with sustainable development in terms of growth, consumption and natural environment. Globalization Globalization is often defined as the process through which the global economies are gradually becoming interconnected due to massive increase in cultural assimilation and trade exchange. The phenomenon is also frequently related with increased economic interdependence and growing awareness about political, economic and social issues prevailing in different countries. Globalization incorporates micro as well as macro ingredients of the global environment where the micro factors focus upon cross-border cultural assimilation, exchange of ideas, knowledge transfer and development of global relations. The macro factors comprise cross nation trading and investment, migration of resources and global integration of supply chain. It has been gathered that globalization is widely related with increasing digital revolution, technological development and usage, increasing number of international brands in various business sectors, trade opportunities and economic networking. A number of authors advocated that, globalization inculcate competitive business environment and economic freedom and prosperity (Giddens, 1999; Ndhlovu, 2012). The authors further added that swift adjustments to globalization results in greater economic development, increased consumer choices and raised living standard (Ndhlovu, 2012). Arguments in favor of globalization A number of academic literatures support the fact that, occurrence of industrial revolution during the 19th century was essential for evolution of globalization. Globalization to a great extent induced labor and trade mobility (Crafts, 2000). Alongside, it also supported development of a number of international institutions in various business sectors; for instance, development of organization such as the World Bank, the International Monetary fund, the United Nations and the World Trade Organization came into existence as a result of globalization. It was further observed that during the initial development period, the World Bank and the IMF significantly focused on economic and legislative policies of various nations so as to ensure that they are benefitted by financial globalization (Moshirian, 2008). Masson (2001) reported that, as a result of globalization significant development in technological sector has been observed between 1960 and 2000. In addition to that, Moshirian (2008) observed that countries that participated in the first phase of globalization, enjoyed free trade, increase in openness of economy and significant decline in income gap, while countries that missed this opportunity staggered with relatively low per capita income. Law (2007) further indicated that globalization led to greater recognition of human rights, national sovereignty and harmonious relationship between various global communities and races. On this note, Gupta (2011; 2012) pointed that globalization led to greater choices for consumers from domestic and international competitors resulting to lower product price and better quality. Globalization as a deterrent of sustainable development in terms of growth, consumption and natural environment Globalization has been favorable to a number of countries but as it has already been discussed that its impact is not homogenous, consequently a number of flaws has been recognized by various authors in context of this phenomenon. In this section, consequence of globalization in terms of growth, consumption and natural environment will be discussed elaborately. Regarding growth of global economy, negative impact of globalization can be view in terms of the financial crisis of 2007-08. According to several authors, globalization is heavily responsible for the crisis and global recession as it lead to significant degree of financial deregulation. It has been further gathered that a number of countries who have cost advantage in terms of resources are involved in huge export activities and thereby, creating global trade imbalance. In this regard, the global economy has also become significantly vulnerable as all of them are interlinked and interdependent and if one economy crashes, other will bear the burns too (Wade, 2004). Globalization is a major reason behind growth of various developed economies but it often goes unnoticed that the phenomenon is also responsible for income disparity, increasing gap in living standard between rich and poor and unemployment. Consumption patterns in different countries have also been significantly influenced by globalization. International brands often implement dumping strategy for their personal gain which in turn has a negative impact on the target economy and its local brands (Alber & Standing, 2000; Field, 1995). Besides growth and consumption, the major consequence of globalization can be observed on natural environment. Globalization has led to rapid increase in consumption of finite resources such as wood, coal and oil. Consequently, this has resulted in increase in pollution level, ice cap melting, global warming, destruction of marine life and ozone layer depletion; furthermore, rising level of construction and growth of personal vehicle usage as lifestyle factor have caused tremendous increase in release carbon dioxide in the atmosphere. Overall, it can be suggested that cost of globalization outweighs its benefits (Dreher, Gaston & Martens, 2008; Leichenko & OBrien, 2008). Conclusion The paper focuses on one of ongoing debatable subjects that have significantly influenced the world economy, namely, globalization. The paper critically evaluated benefits as well as drawbacks associated with both the issue. It was gathered that while globalization introduced greater economic freedom for various nations, it also resulted in increased economic interdependence. Favorable arguments suggest that globalization has lead to development of various international governing bodies that support economic development. However, it has negative impact on climate, income gap and consumption pattern and is treated as a significant deterrent of sustainable development. References Alber, J. & Standing, G. (2000). Social dumping, catch-up or convergence? Europe in a comparative global context. Journal of European Social Policy, 10(2), 99-119. Crafts, N. F. (2000). Globalization and growth in the twentieth century. Washington: International Monetary Fund. Dreher, A., Gaston, N. & Martens, P. (2008). Measuring globalization: Gauging its consequences. London: Springer. Field, J. (1995). Globalization, consumption and the learning business. Distance Education, 16(2), 270-283. Giddens, A. (1999). Runaway World: How Globalization is reshaping Our Lives. London: Profile Books. Gupta, N. (2011). Globalization does lead to change in consumer behavior: an empirical evidence of impact of globalization on changing materialistic values in Indian consumers and its after-effects. Asia Pacific Journal of Marketing and Logistics, 23(3), 251-269. Gupta, N. (2012). The impact of globalization on consumer acculturation. Asia Pacific Journal of Marketing and Logistics, 24(1), 41-58. Law, W. W. (2007). Globalization, city development and citizenship education in Chinas Shanghai. International Journal of Educational Development, 27(1), 18-38. Leichenko, R. & OBrien, K. (2008). Environmental change and globalization: Double exposures. Oxford: Oxford University Press. Masson, P. (2001). Globalization: Facts and Figures. Washington: IMF Working Paper. Moshirian, F. (2008). Globalization, growth and institutions. Journal of Banking & Finance, 32(4), 472-479. Ndhlovu, T. P. (2012). Globalization: a theoretical reflection. World Journal of Entrepreneurship, Management and Sustainable Development, 8(2/3), 95-112. The Economic Times. (2008). A brief history of globalization. Retrieved from http://economictimes.indiatimes.com/opinion/guest-writer/a-brief-history-of-globalisation/articleshow/3276531.cms Wade, R. H. (2004). Is globalization reducing poverty and inequality? World Development, 32(4), 567-589. Business Case for Corporate Social Responsibility Name of student: Name of university: Date: Introduction According to Marquis, Glynn and Davis (2007), organizations are increasingly becoming engaged in social activities primarily because they consider it healthy for the financial performance of the company. Corporate social responsibility is defined as the practice of extending an organization’s goals beyond profit maximization and delivering social benefits for communities external to a firm. The paper emphasizes on corporate social responsibility which as a result of globalization is gaining significant importance. The subject in this part mainly focuses on business case for corporate social responsibility as it plays an important role in raising the competitive level and corporate citizenship of an organization. Business case for corporate social responsibility A business case is referred to various underlying arguments or related rationales that supports various facts related to need of adopting and advancing corporate social responsibility (CSR) causes by business communities. A CSR business case is primarily concerned with one main factor, that is, the reason for undertaking CSR by business community and corporations. In other words, a business case helps in determining the benefits that an organization earns by engaging in CSR activities, practices and policies. In other words, a CSR business case analyzes in a detailed manner various financial and other reasons that justify a venture’s CSR initiatives (Carroll & Shabana, 2010). It was ascertained that the historical roots of CSR go back to the era of World War II but it gained importance in the late 40s. Abrams (1951), in this context, presented his argument suggesting that no company should care only about their personal gain; instead, they must think about their consumers, employees and the general public at large. Contemporary contributor such as Frederick (2006) further added that managers should be treated as public trustee, who would be responsible for maintaining balance between growing demand of business resources and corporate citizenship. Critical analysis of CSR related literature suggests that even corporate social responsibility is not devoid of criticism. CSR has mostly been viewed in the positive light but a number of authors have criticized the same as well (Drucker, 1984). Friedman presented his argument against CSR and suggested that management or a business is responsible for generation and maximization of profit for benefit of owner (s) and shareholders. Social issues are not subject of concern for any organization (cited in Carroll & Shabana, 2010). Similar views were presented by Davis as well, who argued that managers should focus upon finance and operation instead of social problems. The author further advocated that undertaking CSR practices has negative impact on a firm’s global competitiveness. The other reasons that work against corporate citizenship include significant cost involvement and negligible return from social causes, lack of perception and social skill among manager and businessmen, negative impact on international balance of payment and dilution of primary purpose of the business (Darvis, 1973). However, favorable arguments suggest that the industrial environment for a business should be favorable and conductive and for this purpose, societal development is essential. Therefore, business development and societal development are interdependent and run parallel (Carroll & Shabana, 2010). It has already been discussed that long term self interest is one of the essential purpose of undertaking corporate social responsibility as it enhance long term goodwill (intangible asset) of the firm. It was also gathered CSR helps in improving the public image of a firm as well. Consequently, firms find it easy to gain greater consumer base and workforce with high market reputation. It was further observed that undertaking CSR activity result in optimum usage of business resources as a firm can use its spare resources for societal development. Furthermore, some authors recognized that often societal problems can lead to new opportunities. Hence, a firm should invest in CSR activities (Darvis, 1973). Tonello (2011) appended that establishment of positive relationship between corporate social performance and financial performance of a business is a long standing pursuit for most academicians and researchers. He further added that, no single business case or rationalization can justify the importance of CSR with respect to improvement in business bottom-line. CSR is considered as a business choice because it enables a firm to minimize its risk and related cost, helps in developing competitive advantage, enhances corporate reputation and increases business sustainability (Darvis, 1973). There are three models based on which the rationales for CSR are developed. The Social value led model focuses on CSR initiatives related to various non-economic issues which the business case model focuses on all economic factors and tries to establish link between the firm’s financial performance and CSR framework. Lastly, the syncretic stewardship model presents a holistic view of CSR by combining the previous two models (Tonello, 2011). It was gathered that business case for CSR is of great importance to a number of people. These groups of individuals include corporate board members, CFOs, business executives of upper echelon and CEOs. Business case for CSR is important for these people because these members are concerned about financial well-being of the company as well as are responsible for impact of its corporate citizenship on the bottom-line. Business case is important for various executives because it helps them reason that the CSR framework of the company is consistent with the objectives and strategies of the firm at different managerial level. Additionally, external stakeholders such as shareholders, social activists, government bodies and consumers are also interest in a firm’s CSR case so that they are well informed about the firm’s ongoing activities. Some of the examples of business case of CSR are companies such as General Mills Inc donated $1.5 million to breast cancer cause through its initiative; McKinsey & Co. Offers free consultation services to various non-profit organizations; Home Depot Inc shared its rebuilding know-how with various victims of Hurricane Katrina (Tonello, 2011; Carroll & Shabana, 2010). Conclusion Corporate citizenship is gaining importance among various public as well as private organizations and it was gather that different organizations have different purpose of undertaking CSR. In the paper, the need of business case for CSR has been discussed where pros and cons of corporate citizenship have been evaluated in a detailed manner. The paper highlights viewpoint of various authors regarding CSR so that a clear perspective is developed. Alongside, importance of CSR business case and users of the same have been discussed in a specific manner. References Abrams, F.K. (1951). Management’s responsibilities in a complex world. Harvard Business Review, 29, 29–34. Carroll, A. B. & Shabana, K. M. (2010). The business case for corporate social responsibility: a review of concepts, research and practice. International Journal of Management Reviews, 12(1), 85-105. Davis, K. (1973). The case for and against business assumption of social responsibilities. Academy of Management journal, 16(2), 312-322. Drucker, P.F. (1984). The new meaning of corporate social responsibility. California Management Review, 26, 53–63. Frederick, W.C. (2006). Corporation, Be Good! The Story of Corporate Social Responsibility. Indianapolis, IN: Dogear Publishing. Marquis, C., Glynn, M. A., & Davis, G. F. (2007). Community isomorphism and corporate social action. Academy of Management Review, 32(3), 925-945. Tonello, M. (2011). The business case for corporate social responsibility. Retrieved from http://blogs.law.harvard.edu/corpgov/2011/06/26/the-business-case-for-corporate-social-responsibility/. Read More