Globalisation, Social Issues and Public Policy - Essay Example

Globalization, Social Issues and Public Policy Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction The most recurrent challenge that many countries face today, apart from ensuring stable economic development, is how to achieve a stable financial situation, high economy and also attain a high standard of living. Different strategies are at disposal in realizing these outcomes even though they may vary from one organization to the other and from each country to another. This is because each and every country has got its own style of learning the economy and different political climates. For instance, the factors that might have contributed highly to the growth of the Chinese economy over the past three may be totally different from those that have contributed to high growth in other countries like Thailand, Malaysia, Malta and many more (Went 2000). The same way economic growth factors vary among different countries also do the organizations. While good investment plans, strong institutions, advancement in technology and sound macroeconomic policies have been attributed to the witnessed success, something that cannot be left out, is the element of globalization. This is because globalization presents a market situation where different products and services can be made available and also accessed by the consumers (Tisdell and Seidl 2004). In general, globalization has facilitated the economy of the world allowed for the participation of each actor. This scenario has also been enhanced with the advancement in technology. This exercise is geared towards exploring what globalization entails, benefits and costs associated with globalization, the challenges that globalization has continued to pose to organizations and finally the impact of globalization to an organization (Crafts, 2001). A definition of globalization: Globalization is understood as a process of high level of interconnectedness among different countries of the world notably in different aspects that include economic, political and cultural (Tisdell and Seidl 2004). The concept would be easily understood important characteristics like the improved technology both in transportation and communication, inward and outward flow of labor and capital, diffusion of information, the existence of non-governmental organizations (NGOs) and global corporations. Benefits and costs of globalization In the past four or so decades, the international trend has been noted to be inclining to free trade flow where investments are done across borders irrespective of the country of origin of the investor. It is therefore emerging that more than ever before, each and every country depends on the other in one way or the other and even though this dependency is much witnessed in the case of trading and economic growth (Tisdell and Seidl, 2004). This scenario has led to a highly globalized economy where almost every country is party to. Through globalization, a number of benefits and costs have been presented both to organizations and countries that are involved. Benefits Improved standard of living: It is important to note that no single country irrespective of its economic status is self sufficient. In other words, each country in one way or the other may be in need of a product or service from other countries if not available locally (Fischer, 2003). While some countries of the world like from the West are known to have highly industrialized, some other countries in the developing world especially from Africa may be doing well in Agriculture and therefore producing what might not be available in the industrialized world (Tisdell and Seidl 2004). For instance, while a country like China may be highly industrialized and among the leading in the production of electronic goods, it may not self sustaining in other commodities that are Agricultural and not produced locally. In this kind of scenario, to ensure good balance and that the citizens have access to important products that are not locally produced, globalization comes into rescue. In the process of doing this, the citizens can access decent lives by accessing the products and services they want in terms of quality and the prices of their choice. This goes a long way to accord the consumers more bargaining power and consequently better prices for the consumer can always reach for the wider market (Went 2000). Expansion of business opportunities for different organizations. Each and every market is subject to growth and can reach a point where opportunities for expansion are limited to key players and in particular the organizations that are operating there in (Gilpin, 2000). While saturation in the domestic thing for any investor because of limited growth, expansion into world markets opens up new opportunities for businesses to grow themselves and also increase their market segments and consequently more revenue generation (Tisdell and Seidl 2004). With globalization, investors now have the opportunity to establish their businesses in different parts of the world where they deem productive for the business. This is especially important in a situation where the competition in the domestic market is in advanced stage and yet no room for expansion rather than cross borders and meet the desires of the market that might have not been reached and is wanting (Martin, 2005). Inflation control: Inflation is likely to be a major problem in those markets where monopoly is likely to be witnessed. However, one contributing factor to this kind of situation, is the scarcity of a given product or service. The end result is highly hiked prices whereby the few suppliers in the market determine the price to be charged for the products they have (Went 2000). In such a context, it is expected that with globalization, more traders are likely to come in and not necessarily from the domestic market but from the global market and in the process improve the supply of commodity under question and hence take control of the situation where prices are likely to escalate. This will help maintain the prices at market level. Enhancement in creativity and innovation: Because different companies and organizations are to compete in the global arena, it will be a matter of creativity both in product development and service delivery that will determine one’s success in the market (Broda and Weinstein 2006). What this does to the global economy, is the desire to change the perception of the commonly known products to working on different strategies and methods that will help help not only unique and quality products but deliver them to market in an excellent manner. This will go a long away in inspiring the spirit of creativity and innovation among different companies and also at national level government. The ultimate result in this case is enhanced efficiency in different operations hence declined costs and consequently relatively cheap prices for different products and services that are brought to the market (Broda and Weinstein 2006). Fostering intergovernmental relations: More than ever before, different governments are entering into agreements to allow free flow of goods and services, capital and labor among them. This is aimed at promoting working relationships among the involved countries towards a common goal. This is particularly important in promoting cooperation among different countries of the world alongside ensuring enhanced levels of interaction and coordination as well awareness of existing global issues like environmental management and fight against terror (Broda and Weinstein 2004). Costs of globalization Social and economic costs: With globalization, liberalization of trade, is the order of the day. However, it is now emerging that trade liberalization is most likely to benefit only those industries like technology, communication and industrialization while giving little attention to the rest. This has had an implication for many of the global countries. For instance different economies are now forced to consider restructuring their economies by introducing different reforms (O’Rourke and Jeffrey 2002). While this seems to be a very constructive approach in the long-run, the costs of doing this in the short-term are enormous and have cost the taxpayer a lot. Further, the social costs are high. Lets the example where the economy is restructured and thousands of workers are declared redundant. Many families are likely to suffer because of the sudden cut in the regular income that many people depend on (Tisdell and Seidl, 2004). Inability to take advantage of globalization: globalization is sweeping over, all countries. What this means in the world economy, is that each and every government and industry is affected. While some countries have upper in taking advantage of globalization as a result of their economic state, others have weak economies and therefore denying level ground for all players to participate (O’Rourke 2002). The consequence of this situation, is that different companies and organizations from developed economies, are taking this advantage and are now invading young economies where domestic companies cannot favorably compete. This in return has resulted in a situation where the income gap between developing and developed nations has continued to increase and the consequence has been a drop in the standards of living (Fischer 2003). Increased spread of human and animal as well as plant diseases: While some diseases have started on a small scale in specific locations in the world, their spread to the rest of the world, is one threat mankind and other living organisms are facing. Such diseases as HIV/AIDS, SARS, bird flu and many more are examples of diseases that are highly transmitted through the process of interaction of people from different parts of the world. HIV/AIDS for instance, has reduced the life expectancy of human beings in many parts of the world especially in the developing world like in Africa (Joseph 2003). The problem with addressing these challenges has been attributed to economic challenges that many countries are experiencing. This hindered many programs that are intended at fighting these diseases. Further, while some lifestyles like smoking and increased tobacco use were associated with developed countries, through globalization, this lifestyle is now common virtually in almost every country and the major issue has been related costs that respective governments are facing. The advance effects in particular, are health-related. This is because the excessive use of tobacco can trigger chronic diseases like cancer and tuberculosis which the national governments will have the responsibility to treat and even prevent (Bauman 2000). Brain drain of highly skilled labor: Through globalization, trade has been highly liberalized and there is free flow of labor, capital and different goods and services. While this can be a positive to some countries it is only to a certain level. Because of global competition, labor conditions and acceptable wage rates have been a big issue that determines the free flow of labor (Perraton 2001). This is because highly skilled workforce like engineers and doctors, IT specialists as well as academicians are now moving to those countries where the wage rates and working conditions are generally attractive. This has adversely affected on the developing economies given the fact that they do not have the capacity to pay attractive wage rates. This has caused a great shortage of skilled labor in developing economies (Crafts 2001). Challenges of globalization to national governments Different countries have different institutions that guide them on how they should engage with other countries and to what extent. However, these institutions are not static because of the ever changing trends in the global arena. It is from this perspective that each national government is expected to respond accordingly to existing trends, if it has to remain relevant. The challenges that national governments are facing as a result of globalization, include maintaining of financial stabilities, anticipating for crisis, ensuring balance between payments and lending meant for development and management of national macroeconomic policies (Beck 2000). Maintaining of national financial stability: This has become a very complex issue for many of the national governments. This is because of the fact that capital flows are moving very fast across the national borders as a response to change that is taking place in asset returns and information on the available investment opportunities. As this is the case, national economic policies to monitor and flow of capital is very critical even though a complex process for many of the governments (Gilpin 2000). This has resulted in a great imbalance between financing the outstanding financial liabilities and also the subscriptions to the IMF as well as lending to multinational organizations a process that has to be completed within a very short while. Anticipation of the crisis: It is important to recognize that different international financial institutions (IFIs) like the IMF and other markets, are faced with serious problems in anticipating on what is likely to happen in the global market. This is at national level is a serious challenge when it comes into a situation where certain national governments have serious financial and macro problems that activated by governance issues (Broda and Weinstein 2006). When a crisis takes place, and IFIs takes initiatives by introducing different rescue packages, a moral hazard is caused by giving with an intention incentive to a market participant to encourage excessive risk-taking in the future as a result of anticipated pilots. But more important to note is that even the market participants and other private risk-taking agencies also fail in anticipating for any crisis leaving many national governments in very big dilemma (Tisdell and Hartley 2008). Balancing between payments and lending for development: In the current world of business, what has become less and less clear is the distinction line between financing payments and lending multinational development banks (Rupert, 2000). This case was witnessed in the 1980s when Bretton institutions were lending in tandem as such to ensure balance of payments while private financing got into a serious problem as a result of the then debt crisis. This problem can be replicated in many other national governments as the IMF remains at the realm managing crisis by applying different approaches to balance of payments that may not be favorable to all nations (Gilpin 2000). Impact of globalization on an organization As mentioned earlier, because of the liberalization of trade where capital, labor and services can freely move across borders, different companies and in particular Xerox Inc. Xerox is a company Headquartered in Norwalk and with over 140,000 employees working in different 160 countries (Perraton, 2001). The company is specialized in processing and managing business documents as one way of ensuring that businesses are able to manage their information in a more effective manner. Since the business is a global a global company operating in over 160 countries, diversity management has become a very important strategy (Broda and Weinstein 2006). The company for instance is committed to practices of providing equal employment opportunities and also value diversity at the workplace. Xerox for this reason, consistently working towards creating an environment where each and every employee is expected to contribute positively to the organization at all levels. To achieve this outcome, the company is reaching for diverse labor markets to search for highly qualified and talented employees despite their country of origin. Conclusion This essay has extensively discussed the concept of globalization, by discussing the benefits and costs of globalization, the challenges of globalization for national governments and the impact of globalization to an organization. The benefits of globalization include: improved standard of living, expansion of business opportunities for different organizations, inflation control, enhancement in creativity and innovation and fostering intergovernmental relations. On the other hand, the discussed costs of globalization include: social and economic costs, inability to take advantage of globalization, increased spread of human and animal as well as plant diseases and brain drain of highly skilled labor (Broda and Weinstein 2006). This discussion has found out that globalization is also posing some serious challenges to different national governments like maintaining of national financial stability, anticipation of the crisis and balancing between payments and lending for development. In general, globalization both presents positive and negative effects to different governments and multinational companies and therefore the success of each is depended on the established policies and strategies. References Bauman, Z. (2000). Globalization. New York: Columbia University Press. Beck, U. (2000). What is Globalization? Cambridge: Polity Press. Broda, C. and Weinstein, D.E. (2004). Variety growth and world welfare. American Economic Review, (AIA Papers and Proceedings), 94(2), p. 139-144. Broda, C. and Weinstein, D.E. (2006). Globalization and the gains from variety. Quarterly Journal of Economics, 121, p. 541-576. Crafts, Nicholas (2001). Globalization and Growth in the Twentieth Century. World Economic Outlook Supporting Studies. Washington, DC: IMF. Fischer, S. (2003). Globalization and Its Challenges. American Economic Review, 93(2), pp. 1- 30. Gilpin, R. (2000). The Challenge of Global Capitalism: The World Economy in the 21stCentury. Princeton: PUP. Joseph, S. (2003). Globalization and Its Discontents. New York: W.W. Norton & Company. Linda, L. (2001). The Globalization Debate: Issues and Challenges. Geneva: International Labor Organization. Martin, W. (2005). Why Globalization Works. New Haven and London: Yale University Press. Perraton, J. (2001). “The Global Economy–Myths and Realities”. Cambridge Journal of economics, 25, pp. 669-6 Rupert, M. (2000). Ideologies of Globalization: Contending Visions of a New World Order. London: Routledge. Tisdell, C.A. and Hartley, K. (2008). Macroeconomic Policy: A New Perspective. Edward Elgar: Cheltenham and Northampton. Tisdell, C.A. and Seidl, I. (2004). Niches and economic competition: implications for economic efficiency, growth and diversity, Structural Change and Economic Dynamics, 15, p. 119- 135. O’Rourke, K and Jeffrey W. (2002). “When Did Globalisation Begin?”. European Review of Economic History, 6(1), pp. 23-50. O’Rourke, K. (2002). “Globalization and Inequality: Historical Trends”, Aussenwirtschaft; 57(1), pp. 65-101. Went, R. (2000). Globalization: Neoliberal Challenge, Radical Response. London: Pluto Press. Read More

Benefits Improved standard of living: It is important to note that no single country irrespective of its economic status is self sufficient. In other words, each country in one way or the other may be in need of a product or service from other countries if not available locally (Fischer, 2003). While some countries of the world like from the West are known to have highly industrialized, some other countries in the developing world especially from Africa may be doing well in Agriculture and therefore producing what might not be available in the industrialized world (Tisdell and Seidl 2004).

For instance, while a country like China may be highly industrialized and among the leading in the production of electronic goods, it may not self sustaining in other commodities that are Agricultural and not produced locally. In this kind of scenario, to ensure good balance and that the citizens have access to important products that are not locally produced, globalization comes into rescue. In the process of doing this, the citizens can access decent lives by accessing the products and services they want in terms of quality and the prices of their choice.

This goes a long way to accord the consumers more bargaining power and consequently better prices for the consumer can always reach for the wider market (Went 2000). Expansion of business opportunities for different organizations. Each and every market is subject to growth and can reach a point where opportunities for expansion are limited to key players and in particular the organizations that are operating there in (Gilpin, 2000). While saturation in the domestic thing for any investor because of limited growth, expansion into world markets opens up new opportunities for businesses to grow themselves and also increase their market segments and consequently more revenue generation (Tisdell and Seidl 2004).

With globalization, investors now have the opportunity to establish their businesses in different parts of the world where they deem productive for the business. This is especially important in a situation where the competition in the domestic market is in advanced stage and yet no room for expansion rather than cross borders and meet the desires of the market that might have not been reached and is wanting (Martin, 2005). Inflation control: Inflation is likely to be a major problem in those markets where monopoly is likely to be witnessed.

However, one contributing factor to this kind of situation, is the scarcity of a given product or service. The end result is highly hiked prices whereby the few suppliers in the market determine the price to be charged for the products they have (Went 2000). In such a context, it is expected that with globalization, more traders are likely to come in and not necessarily from the domestic market but from the global market and in the process improve the supply of commodity under question and hence take control of the situation where prices are likely to escalate.

This will help maintain the prices at market level. Enhancement in creativity and innovation: Because different companies and organizations are to compete in the global arena, it will be a matter of creativity both in product development and service delivery that will determine one’s success in the market (Broda and Weinstein 2006). What this does to the global economy, is the desire to change the perception of the commonly known products to working on different strategies and methods that will help help not only unique and quality products but deliver them to market in an excellent manner.

This will go a long away in inspiring the spirit of creativity and innovation among different companies and also at national level government. The ultimate result in this case is enhanced efficiency in different operations hence declined costs and consequently relatively cheap prices for different products and services that are brought to the market (Broda and Weinstein 2006).

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