The Challenge of Globalization - Essay Example

Abstract

As an established part of the contemporary world, globalization allows the redefining of the new society through its economy, social, political, and cultural dynamics. Through globalization, the world has achieved a more globally connected economy. Despite these benefits, this paper discusses some of the challenges that globalization has subjected the globe to experience. The challenges discussed include unknowns for the human resource teams globally because of the international recruiting where companies have to recruit across the borders and international recruiting issue where companies need to make arrangements on how to interview potential candidates to ensure they qualify for the job even if they are many miles away. Human cost is associated with the process of globalization, especially when a company is looking forward to global expansion or competes with others globally and it impacts developing countries that want to expand globally, infant industries and companies, workers, and the users of the products.

Key words: Globalization, economy, expansion, and businesses

Globalization

Globalization is an established part of the modern world ongoing to redefine contemporary society in terms of economy, social, political, and cultural dynamics. Through globalization, the world has achieved a more globally connected economy. Despite these benefits, globalization has subjected the globe to experience multiple challenges. Some of these challenges include unknowns for the human resource teams globally because of the international recruiting where companies have to recruit across the borders (Amin, 2006). International recruiting is a challenge because companies need to make arrangements on how to interview potential candidates to ensure they qualify for the job even if they are many miles away. Globalization causes the problem related to the management of employee immigration because the laws of immigration keep on changing more often, making it difficult to secure visas for employees (Amin, 2006). Another challenge is associated with difficulties in global expansion since businesses want to go global, which requires them to set up a compliant overseas presence.

More global challenges attributed to globalization include energy and environmental security, as it emerged in 2007 on the global agenda. This is because there has never been a consensus on the best action for the supply of insecure energy and the catastrophes associated with the environment. Top on the issues that have posed a challenge is the impact of high pricing for oil products and global warming. Another global challenge is conflict and poverty since the fight towards these aspects has been hindered by the distant threats because boundaries and borders have blurred (Friedman, 2007). Others include the global imbalances where some countries have more power and achieving more economic prosperity than others as well as the economic exclusion

The human cost is associated with the process of globalization, especially when a company is looking forward to global expansion or competes with others globally. Therefore, those impacted by the human cost of globalization include the developing countries that want to expand globally, infant industries and companies, workers, and the users of the products from various companies that compete globally (Amin, 2006). Human cost occurs whenever a country struggles to compete with other developed ones globally. The developing countries will have to incur much higher costs to get along with others in the global surface of production and service provision. In developing countries, industries are still at the infant level, and when subjected to free trade at the global level, they intend to incur higher costs than the returns out of the global business engagement (Friedman, 2007). The human cost is also associated with the environmental costs in which the globalization means that more non-renewable resources would be used. The increased pollution and global warming caused by the use of non-renewable resources lead to many problems for the people such as health issues. As a result, people will develop various health issues that will incur a lot of costs while seeing treatment.

The human cost is also attributable to the labor drain in which the free movement of workers causes a lot of challenges to some companies, countries, especially the developing ones, as well as workers. For developing countries, they find it difficult to hold on to the best-skilled workers who want to earn good wages. The same applies to infant companies that may not get the best-skilled workers because they demand huge wages. Workers with the best skills but are unable to get visas to go to work in the best companies may not be lack with the increased globalization.

Various factors cause the issue of human costs associated with globalization. One of the factors includes scarce resources that are faced by many developing countries and infant industries. Globalization brings about the competition of the countries with others regardless of the size and the economic performance of the country (Friedman, 2007). It means that regardless of the economic performance of the country, all of them will be subjected to the same competing environment. However, developing countries and infant industries have scarce resources, which will not facilitate them to compete in the market as the rest (Amin, 2006). For them to stay in the global market, they have to strain with the little they have while making limited profits. Similarly, there is a lot of inequality in the global market associated with large and well-developed economies and companies going for best-skilled workers and having more influence on pricing in the market-leading to small and unstable economies being unable to make a profit in the same market.

It also happens that in developing countries, there is a high rate of poverty; hence companies that operate in such countries will not have enough market. It happens that well-established companies want to dominate in large economies, causing the competition that does not favor small companies. Thus, the issue of poverty leads to infant industries unable to make a profit in developing countries to compete with others. Wars in developing countries and unstable states make the process of globalization a challenge to foreign companies looking for entries into the global market (Amin, 2006). Competition is one of the major causes of the human cost in the process of globalization because businesses spend more on ensuring that they are suitable to compete in the global market. Strict business regulations in different countries cause businesses to incur a lot of cost on meeting them in order to operate in the worldwide market.

Diplomacy is important in the phase of globalization. The process of globalization involves countries making sovereign decisions on matters of economies. The decisions touch on the opening of the borders to allow the flow of capital, people, technological changes, goods, and ideas. In order to achieve this, diplomacy is needed so that countries can have the interconnections of their people and businesses through new global communication technologies. Countries that engage in the exchange of goods and services through globalization need to form a common organization. The organization links these countries together to help offer the solution to most problems that members face while engaging in global business (Friedman, 2007). The common united organization helps to address issues related to poverty, inequality, and competition that member countries face, especially those in the developing stage.

Before a company goes global, a preliminary budget is needed in which the approximations are provided of how much is needed to successful operate in the global market. The budget is as provided below:

Budget

Infrastructure and Innovativeness- $1.4 million

Products and Services- $4.2 million

Marketing- $0.5 million

Corporate tax- $0.8 million

Research and development- $0.5 million

Wages and Salaries- $2 million

Recruitment and training- $0.4 million

Price of Inaction-  $0.6 million

Total- $10 million

For a typical country that wants to join the global market, they must consider the corporate tax, which is often lower because more companies join hands together to push through the global agenda as a united family. A significant amount also goes to the measures to prove the attractiveness of the business in foreign countries. This is part of the amount that goes to the marketing of the business in foreign countries. A significant amount should be available to lease or purchase infrastructure, such as the premises for business. There are also commercial openings that the company has to invest in research and development. This involves areas that have the potential of doing well, depending on the countries of existence. Enough capital should be allocated in the areas of employment through training of the employees. Operating in the new market means that employees should be skilled and trained to adapt to the new changes in the foreign land. This means that money should be allocated for the payment of new wages to the workers. There will also be the cost of inaction amounting to $0.6 million.