Globalization Role the in the Development of the World Economy - Term Paper Example

Business Executive Summary The assignment highlights the context of globalisation and its effects on economy, society and the business world. It foregrounds important facts about globalisation. The positive effects of globalisation over the decades are explained in details. This helps to provide an insight of the phenomenon. Over the centuries, globalisation has had a prominent existence. It has helped to make organisations more functional. The trade and commerce had a boost over the decades through a transformation from traditional ways of barter system to introduction of more advanced systems for running the business. Opportunities for currency exchange as well as mediums of communication have developed from the introduction of internet. More people can make international visits without any hazards and take advantage of currency exchange. Enterprises can communicate well through the development of systems of communication and office automation. There are more advantages than disadvantages of globalisation. It has shown a positive trend of development till date. Globalisation will most certainly bring in bright changes in the world and make it more powerful in the near future. The assignment here highlights all these points in a comprehensive manner, so that the idea of this business assignment can be translated in a more appropriate way. Table of Contents Executive Summary 2 Introduction 4 Globalisation: Friend or foe 5 Conclusion 8 Reference List 9 Introduction Globalisation has become an inevitable part of the world economy. This can be stated from trades that take place between various countries in different parts of the world. From past evidences, it can be easily understood that global economy was existent from a long period of time. Explorers had to face various risks to conquer new places and resources found there. A new age or era seemed to emerge from imperialism of the 19th century (Gibbert and Durand, 2006). Globalisation contributed in building an era, where different nations directly competed with each other. A lot of changes took place, encompassing development of the underwater cables of telephone, steam ships that are iron hulled and screw driven, radio, satellite technology and the most vital of all is the internet. These technologies have proved to be helpful as the process of communication became easier and faster for the whole world. It was available at any time and from anywhere. In organisations, introduction of the production line and association of the same with scientific management enabled mass production (Hakansson and Waluszewski, 2007). As a result of this, manufacturing levels of the third world companies became cheaper than the first world ones. Ownership and investment became quite a global phenomenon. Knowledge has led to the beginning of several new industries and forced traditional industries to disappear (Chen, 2013). The gradual evolution of the information system has been able to bring in changes in business processes and functions. This has progressed over three vital phases. The most important phase is office automation and its acceptance over the years (Panagiotou, 2003). It was a factor responsible for increase in efficiency of organisations. It was then followed by rationalisation, which helped to streamline procedures and eliminate any bottlenecks that were revealed by automation. Organisations also introduced the concept of TQM. This was an approach adapted by many companies for continuous improvement (Collier and Dollar, 2002). The organisations moved from the approach of TQM to a fresher approach of Business Process Re-engineering (BPR) eventually. This process took into consideration processes, rather than hierarchies and functions (Grey, 2009). The 20th century had witnessed multiple changes in the business environment. The business had become more competitive and was under pressure to cater to customer demands. The 21st century was a turning point for the business world. This century saw many changes in form of increased emphasis on intangible assets, knowledge assets and intellectual capital (Dolfsma, 2008). This led to the rise of fresh organisations, such as, Google and Amazon, which symbolizes a new model of business. There is a shift in both the supply chain and internal values. This is a very important change adapted for long-term survival of companies. At the same time, knowledge pool by organisations has become the new way to grow and survive. Therefore, rapid emergence of an economy with global knowledge, increasingly required organizations and managers that are best fitted to work. So, the business assignment will be a ride through the changes that globalisation entailed and the utility it has provided for decades. Globalisation: Friend or foe The background of the statement is to justify globalisation as a friend or a foe. From trends of the last few decades, it can be easily interpreted that globalisation has more advantages than disadvantages and therefore, it can be considered more of a blessing. It has helped to accelerate the pace of development of economies and the world, to be more precise. It can be referred to as processes of international bonding, which is arising from the interchange of products, ideas, world views and such other aspects of the culture. It is the change that the world is adapting at a rapid pace. Without adaptation of the same, the world as a whole and organisations, more specifically, will lag behind and lose in the race of the fittest (Inoguchi and Marsh, 2007). Almost all organisations have incorporated the new and advanced technological changes and are making full utilisation of the same. During the year of 2000, the International Monetary Fund (IMF) rightly identified four basic criteria or aspects of globalization (Gannon, 2008). These were capital and investment movements, trade and transactions, dissemination of knowledge as well as migration and movement of people. Furthermore, they added that environmental challenges such as, air pollution, climate changes, cross-boundary water and over-fishing in oceans, are all linked with globalization. “Therefore, globalization processes affected economics, business and work organization, socio-cultural resources, and the natural environment” (Misckin, 2006 ). Globalisation had taken tiny steps from beginning of the existence of the human race. It was a part of the human race in form of trade that took place between countries years back. There were invaders who had conquered new places and found new resources. All these are signs of existence of globalisation for a very long period of time. The 19th century experienced some great innovations like, introduction of the internet, radio and underwater telephone cables. These were vital innovations, which laid down the base for other innovations. The communication process undoubtedly got a boost in the 19th century (Gorelick, Milton and April, 2004). The organisations also saw some great changes in the form of alignment and integration of the product line and scientific management, which helped to enhance the manufacturing process. Knowledge led to beginning of the new industries and end of the old and traditional ones. The next important phase of globalisation was automation. It was followed by rationalisation, which helped to lower problems arising from automation. Then, introduction of TQM was a big change. The last most important adaptation in that century was introduction of BPR, in place of TQM, in big organisations. The 20th and 21st century was a phase of renaissance for the business world. There were introduction of various assets and intellectual capital (Easterby and Lyles, 2005). This helped to introduce new companies with fresh models like, Amazon and Google. There were a shift in both the supply chain and internal values. This is an important change adapted for long-term survival of the companies. At the same time, knowledge pool by organisations seemed to have become the new path for facilitating growth and survival. Therefore, globalization generated a remarkable growth in the trade and exchanges of goods and services as well as in the transfer of technology and currencies, besides better movement of the capital. It helped in the inflow of new and improved ideas as well. A measure that highlights the degree of globalization is the volume of financial and international transactions. Every day in the currency markets of New York, over $1.2 trillion flows in and out and the volume of transactions of international stock markets easily exceeds this amount (Dicken, 2007). Globalisation has created integrated markets worldwide through more openness in the international economic system. Globalization entailed movements that created a world that is borderless and led to huge rise in the global flows. There are a number of sources of globalization responsible for bringing in much-needed changes in the economy of different countries of the world. One such source can be described as the technological advancements that took place and significantly lowered costs of communication and transportation. The technological changes have also helped to radically cut down the costs of processing data as well as information retrieval and storage processes. The other manifestations of this technology are advancements in the World Wide Web, electronic mail and the Internet, in a way that laptops and computers of the new generation are far more powerful than the mainframe computers 24 years back. The IT companies are gaining huge profits due to improvement in the technology. Companies like, Google and Microsoft, also introduced Big Data related software, like, the Hadoop, which increased the storage space of data as well as availability of their information. These were all effects of globalization and helped to bring in a lot of profit for companies who introduced this technology in carrying on their work swiftly. The second source of globalization was liberalization that was brought into the trade. Economic liberalization has helped to make the worlds’ trading system liberal. This process was introduced way back in the last century. As a result, there had been significant reductions in tariffs and other barriers to trade in goods and services (Weinstein, 2013). Other aspects of liberalization can be described as increment in the movement of capital and other factors of production. While similarities can be found in terms of capital movements and between trades of the last century with that of the present, yet what cannot be avoided is the fact that the last decade was not part of the major technological innovations, which led to the present globalized world economy. Thus, there were major qualitative differences in economy of the last century from the present one (Ladi, 2005). It comprised a lot of changes in enterprises with wider reach in terms of technological changes as well as the range of horizons of managers have improved because of advancements in the process of communication. Globalization forms a vital part for smooth movement of trade and commerce, without which the whole process of information dissemination would have been futile or delayed (Mott, 2004). Organizations for decades have enjoyed immense benefits because of the entire process of globalization and its advancement. It has led to their increased profitability and smooth workflow, where everybody can link with each other at any point in time through availability and usage of different forms of communication. Outsourcing has also become easier for various countries (International Labour Organisation, 2004). There are more job opportunities than in the last few decades, where organizations were small in their capacity to hire enough number of people. This decade saw changes in the form of more job availability and openings for new and fresh talents owing to the rapid expansion of organizations (Cameron and Palan, 2004). Nonetheless, there are few disadvantages that can be harmful to the economy. The disadvantages of globalization can be harmful emissions of gases from industries and wastages that are disposed off in water bodies. These inflict damages to the health of people living in the society. All these effects can be curbed and eradicated in order to make the world a better place to live in. In totality, globalization has rightly got more benefits than disadvantages (Armstrong, 2006.). Conclusion Globalization is a blessing and not a curse as it has a huge role to play in development of the world economy. It has always formed a part of the process of gradual development of economy and trade. From excavations made by conquerors, introduction of barter system, office automation to the present world, where internet has become pivotal for change and advancement that has helped economies to be more functional and organized (Desouza and Awazu, 2005). The organizations benefitted in form of increased trade and swift communication channels. The introduction of currency exchange was all a part of globalization, which made migration of people easier and functions of business smoother. The effects of globalization are too vast to be counted. The growth of countries had a boost because of these effects. It has made remarkable contribution throughout the 19th, 20th and 21st century (Ladi, 2005). The introduction of software like, Hadoop by Google has made collection, storage and distribution of data easier. Globalization will lead to further advancements in the future and help in accelerating the growth of organizations as well as standards of living of people. It will make higher contribution for advancement in the technology and make the world a better place to breed future generations (Gray, 2009). Globalization might lead to certain environmental problems, which can be curbed. Therefore, it can never be avoided and will forever form a vital part of the society owing to the numerous contributions. Reference List Armstrong, M., 2006. Excellence & improved decision making. London: Kogan Page Publishers. Cameron, A. and Palan, R., 2004. The imagined economies of globalization. California: Sage Publications. Chen, J., 2013. The role of international institutions in globalisation: The challenges of reform. Massachusetts: Edward Elgar Publishing. Collier, P. and Dollar, D., 2002. Globalization, growth, and poverty: Building an inclusive world economy. Geneva: World Bank Publications. Desouza, K.C. and Awazu, Y., 2005. Engaged knowledge management: The re-alignment imperative. Basingstoke: Palgrave Macmillan Dicken, P., 2007. Global shift: Mapping the changing contours of the world economy (5th ed.). California: Sage Publications. Dolfsma, W., 2008. Knowledge economies: Innovation, organization and location. London: Routledge. Easterby.S, M. and Lyles, M.A., 2005. The handbook of organizational learning and knowledge management. New Jersey: Blackwell. Gannon, M.J., 2008. Paradoxes of culture and globalization. California: Sage. Gibbert, M. and Durand, T., 2006. Strategic networks: Learning to compete. New Jersey: Blackwell Gorelick C., Milton, N. and April, K., 2004. Performance through learning: Knowledge management in practice. Massachusetts: Elsevier Butterworth-Heinemann. Gray, D.E., 2009. Doing research in the real world. London: Sage Publications. Grey, C., 2009. A very short, fairly interesting and reasonably cheap book about studying organizations (2nd ed.). California: Sage Publications. Hakansson, H. and Waluszewski, A., 2007. Knowledge and innovation in business and industry: The importance of using others. London: Routledge. Inoguchi, T. and Marsh, I., 2007. Globalisation, public opinion and the state: Western Europe and East and Southeast Asia. London: Routledge. International Labour Organisation, 2004. A fair globalization: Creating opportunities for all. Geneva: International Labour Organization. Ladi, S., 2005. Globalisation, policy transfer and policy research institutes. Massachusetts: Edward Elgar Publishing. Misckin, S. F., 2006. The next great globalization: How disadvantaged nations can harness their financial systems to get rich. New Jersey: Princeton University Press. Mott, W.H., 2004. Globalization: People, perspectives, and progress. Connecticut: Greenwood Publishing Group. Panagiotou, G., 2003. Bringing SWOT into focus. Business Strategy Review, 24(2), pp. 8-16. Weinstein, M.M., 2013. Globalization: Whats new? New York: Columbia University Press. Yueh, L.Y., 2009. The Law and Economics of Globalisation: New Challenges for a World in Flux. Camberley: Edward Elgar Publishing Read More