Globalization Has Impact on Technological Innovation - Essay Example

Specialization and division of labor due to competition and market expansion is one potential benefit of globalization that bears real implications upon an increase in production.

While such benefits either maintain or heighten the status of globalization, globalized progress occurs at the cost of the distribution of gains. Where considerable gains are obtained by rich nations or individuals, greater inequalities result, further causing potential conflicts within local settings and abroad. Another probable cost is perceived in the control of national economies which could shift from sovereign governments to other entities, typically leading to extreme nationalism or the rise of fundamentalist political movements (Intriligator).

By examining an article about Fiat, written by Jorn Madslien, one may view and better understand a concrete scenario of how costs and benefits work under globalization. According to the article, Fiat’s intention to adapt to flexibility by splitting groups to develop a division on non-car assets and merge economies upon integration with Chrysler and other huge manufacturing firms altogether reflect the author’s agreement to the position that places globalization on the necessity of interdependence.

As a giant on the verge of declining invincibility, it turns out that with such a decision, Fiat would not afford to make up for losses without relying on an approach worth network and connectivity. To the hopeful CEO, this sounds highly attractive to opportunities for potential markets once large automotive groups, inclusive of Fiat, combine to endure unstable circumstances. The author locates much emphasis on the favorable side of globalization notwithstanding how the competition would fare somehow if allies prove to struggle with success.

Implicitly, the idea felt it would bear an adverse impact on the working class as a consequence of the necessity to increase production, with long hours of work and reduced time for breaks hence. Without the guarantee of additional compensation, Fiat may run the risk of losing employees, especially the tenured ones who have lived up to aligning their type of service and principle with the company’s vision and have accomplished goals on every item with unparalleled quality.

Though the article appears enthusiastic with Mr. Marchionne to keep an eye on a 50% rise in sales in four-year time, since shareholders are bound to augment their share from either group or grow in number, Fiat might reach a point of obtaining lesser shares or dissolution of ownership at worst (Madslien, 2010). Read More