Impact of Globalization on Organizational Stakeholders - Coursework Example

Impact of Globalization on organizational stakeholders Name: Tutor: Course: Date: Introduction Cooperation among countries is facilitated by factors such as the need to trade, invest as well as to have general capital flow, improvements in information and technology and also the alignment towards the international standards. Khanna and Palepu (2004) define globalization as the process of dynamic cultural, economic and institutional interaction and assimilation among the countries of the world. It is simply the processes of international interaction. It affects how employees, customers, companies and governments of different nations of the world relate together in trade and investments. Today, globalization is the most common and driving force in the worlds industry today. It has a great influence on several global stakeholders. It is influencing all actors in the world’s economy as well as the social partners. Globalization has been seen to have various influences on different stakeholders (Mathews & Thakkar, 2012). The aim of this essay was to show the positive and negative effects of globalization on some of the stakeholders, specifically workers, business organizations and customers. Impacts of Globalization on workers Globalization means the process of relations and amalgamation among the citizens, companies and governments of diverse nations in the world (Ekins & Voituriez, 2012). Globalization has greatly influenced workers in the world. The trade liberalization, as well as the lowering of the transportation costs, has relatively increased business across the world. It was initially used as a scholarly term in 1967 to explain essential aspects that had happened in the world (Markovic, 2012). This is a development that is driven by global trade and investments, and it is aided by advancements in information technology. Globalization, however, is not a new thing. For the past several years citizens of various nations have been trading goods among each other over great distances (Fraser, 2007). Corporations also have from a long-time engaged in business in other countries outside their borders. Hitt et al. (2016) argues that the knowledge and skills of workers affects globalization of work especially on income sharing is an essential policy aspect in studying the effects of globalization to workers. The process of globalization can determine the workers who occupy the factories and those that dwell in the streets. The effects of free trade and investments on the workers can be very distinct among several groups. Some scholars have developed theoretical structures that can be used to study the diverse effects that come with globalization and realize the fact that not only firms alone but workers are also influenced (Mathews & Thakkar, 2012). Akteruzzaman (2006) observes that a number of researchers have shown that the labor market frictions influences the wages as well as the sharing of workers transversely among firms following the trade liberalization. The impacts on income distribution thus describe the reason why the majority of the groups strongly support or contest the aspect of free trade (Jensen & Sandstrom, 2014). As a result, developing countries will increase their capacity regarding trading and investment opportunities due to the alleviation of the price disparities as a result of both labor and capital markets as contained in (Anderson & Edward, 1998). Globalization also impacts on employment creation in the developed and developing countries (Jensen & Sandstrom, 2014). This, however, will rely on the volume and kind of trade and investment opportunities, the kind of technology used as well as the ability of the local country to employ the new technology in addition to adapting to its needs. Globalization in the other hand has many negative effects on workers both in developed and developing countries (Wetherly & Otter, 2011). For example, large-scale technological advancements that come along with this occurrence results in a reduction in demand for the unskilled labor has evidenced by the fact that foreign direct investment requires skilled labor. Furthermore, the old nature of work might be rendered useless due to the technological advancements (Khanna & Palepu, 2004). Globalization affects negatively mostly workers from developing countries as it increases unemployment because it is difficult for them to adapt to new technology. Globalization Impacts to Business Organizations Globalization has realized both success and drawbacks to the business organization both in developed and developing countries (Jensen & Sandstrom, 2014). For example, in developed countries business organizations have realized global market. Globalization has enabled business organizations to expand and to extend their value chain into an international level (Ekins & Voituriez, 2012). Business organizations are furthering their wide range of business activities in keeping and defending their yields and competitiveness by lowering costs and enjoying economies of scale. Owing to globalization, multinationals according to Mathews and Thakkar (2012) have higher concentration in Europe and United States. Although they lead in trade volume constraints, they face a challenge of moving into new geographical areas to work from, which will result in stiff competition in the market. In fact, Fraser (2007) observes that a lot of the characteristics of modern globalization are the same as that which existed before the break of First World War. The only notable difference is that the modern globalization has been motivated by policies that have helped to enhance and opened economies both locally and globally. However, globalization is a term that is basically on any scholar’s mouth currently as alludes but is also very hard to describe it fully since it originates from several contexts such as sociological, economical and political as well as environmental contexts (Markovic, 2012). Fraser (2007) describes it as the growing interconnectedness of all aspects of the society. This will force them to widen their market to enjoy economies of scale. Globalization has led to the establishments of business organizations with an aim of controlling and regulating the trade activities of different countries around the world with an aim of having a fair trade (Markovic, 2012). Despite the numerous advantages globalization offers to business organizations it’s worth noting that it has greatly affected negatively (Khanna & Palepu, 2004). It is evident that the business organization from developed countries is having a monopoly over organizations from the developing Nations. According to Wetherly and Otter (2011) consumers prefer engaging in business with organizations from developed countries rather than those from the local developing countries. This results in unfair completion which might render other organizations ineffective. Another drawback of globalization regarding business organization is that global businesses among these organizations only seek to maximize their profits. They do so without any regard to the development requirements of the local individual nations (Anderson & Edward, 1998). Impacts of Globalization on customers Globalization has greatly impacted on the customers across the world both positively and negatively. It gives consumers a wide variety of sellers to choose from and also a range of products to choose from (Anderson & Edward, 1998). For instance, the internet has offered them the opportunity to search and browse for products from various suppliers that are situated all over the world. This will result into reducing prices of products due to the established competition. For example, a consumer living in Australia can search and choose products from supplies living in the USA, Canada, Europe and all the countries of the world. While this occurrence as helped customers in several ways, it has come along with its demerits. With globalization, competition by global suppliers is always expected to create better and quality products (Jensen & Sandstrom, 2014). As is the case now, it has been realized that not all foreign manufactured goods are always subjected to the same acceptable standards. This will thus lead into situations where customers are duped into buying poor quality products at higher prices. For example, when the product availability is scarce fake supplies will take advantage of the situation and sell such products to consumers from far countries at relatively higher prices. Furthermore, Akteruzzaman (2006) defines globalization as the interconnectedness of nations as well as places in the economic domain, specifically trade financial flows and large corporations. While referring to the world, Markovic (2012) notes that communication advancement and the reduction of trade barriers is needed to expand trade and boundary markets. Furthermore, due to this phenomena local economies have been ruined by the fact that local citizen will buy products from foreign nations which in the long run will lead to local brands being rendered useless. Conclusion The essay has found that globalization has both positive and negative effects on cultures, environment, business, organizations, governments, customers, workers. While workers can exploit their skills and knowledge in the international level, price disparities as a result of both labor and capital market negatively affects workers from developing countries. For business organizations, the rising markets in developed nations are as a result of the aspect of privatization of government-owned firms. Due to globalization, customers have had a greater purchasing selection than ever despite the slow progress that globalization has a vital progress in human development. They have the opportunity to search and browse for products from various suppliers, despite longer time of delivery. The support of the local governments, large organizations, as well as worldwide organizations, consumerist initiatives can take advantage of this phenomenon and financial liberalization, to further their efficiency in the global market and also improved service to the general consumers. Globalization consequently has had both positive and negative effects on lives, businesses as well as citizens across the world. Reference list Akteruzzaman, M. D. (2006) Globalization: issues and challenges for trade union movement. John Wiley and Sons. Anderson, D. & Edward, T. (1998) Globalization and Wage inequalities:1870-1970. OUP. Ekins, P. & Voituriez, T. (2012) Trade, Globalization and Sustainability Impact Assessment: A Critical Look at Methods and Outcomes, Routledge. Fraser, K. (2007) Dictionary of Globalization. UK: Polity Press. Hitt, M. Ireland, D.R. & Hoskisson, R. (2016) Strategic Management: Concepts and Cases: Competitiveness and globalization, Cengage Learning. Jensen, T. & Sandstrom, J. (2014) Stakeholder theory and globalization: The challenges of power and responsibility, Journal of organizational studies, Vol. 4, No. 2, pp. 45-59. Khanna, T. & Palepu, K. (2004) Globalization and convergence in corporate governance: evidence from Infosys and the Indian software industry. Journal of International Business studies, Vol. 34, No. 3, pp. 484-507. Markovic, M. R. (2012) Impact of Globalization on Organizational Culture, Behavior and Gender Role, IAP. Mathews, L.C. & Thakkar, B.S. (2012) The impact of globalization on cross-cultural communication, Walden University. Wetherly, P. & Otter, D. (2011) The Business environment: Themes and Issues, Oxford University Press. Read More