The Globalization Case

What is Globalization?

One of the key issues facing business people today is globalization, the process by which the world economy is fast becoming a single interdependent system. Today, one's competitors, customers, and employees may come from anywhere in the world.

Whether one sees globalization as a negative or as a positive development, it must be understood that it has clearly changed the world system and that it poses both opportunities and challenges. It is also clear that the technological, policy, institutional, ideological, and cultural developments that have led to globalization are still very active. Thus, barring a radical move in a different direction, these trends toward greater globalization will likely continue or even accelerate in the future.

The History and Debate of Globalization

Globalization is the idea that people are now more connected across the globe than ever before. Goods and services are traded worldwide. Items from one part of the world are available in a large number of other nations. Travel between nations is also very frequent, leading to an increase in exchange of ideas and ideologies. Thus, ideas and culture are much more uniform worldwide than ever before, and many cultures have melded and meshed. The internet has contributed largely to globalization, as instant communication with anyone in the world is now possible. Whether or not globalization is good for the world economy is debatable, however.

Globalization Debate Pros

There is certainly a positive side to globalization. Those who support it say that it creates jobs by making companies more competitive. This results in lower prices for consumers. Others support globalization because it brings capital and technologies to impoverished nations and brings international products back to their countries, in return. Globalization increases the number of decisions that are made on a worldwide level, resulting in a merging of politics and decisions that are made for the good of people all over the world. The cultural intermingling that occurs also promotes greater equality and acceptance of others, especially since different people can share the same financial interests. Speedy travel and worldwide communication has resulted in a more educated, more cultured public.

Two major advantages of Globalization are the globalization of markets and products. For instance, the EU, having a lot of countries under it, becomes a large market for a company to venture into. Companies can also look for places of raw materials to produce. i.e. Companies can outsource supplies to cheaper areas.

Globalization Debate Cons

Those who are against globalization often cite the fact that American manufacturing has lost 6 million jobs since 1980. Most of these jobs go to people in other nations where the costs of labor and manufacturing are lower. Another criticism is that this process tends to make the rich richer and the poor poorer. It benefits investors and business owners, but results in a loss of jobs for those lower on the pay scale.

The critics have cited among many others, the following points against globalization: (1) the loss of national sovereignty; (2) that unskilled labour will suffer in the developed nations because labour is more expensive there; (3) the negative influence from foreign presence in the country; (4) They quote the saying that "think globally and act nationally"; (5) Location of businesses in nations with less rules, which often leads to pollution in the local nations, negative economic growth and depletion of the environment. They also argue that there is the need to be careful in assuming that because there is one large market, the conditions will be the same all round.

Other criticisms of globalization are associated with social issues. Some believe that it makes it easier for companies to bend rules and act with less accountability, since they can choose to do business in nations with fewer regulations. Sometimes, prisoners and children are exploited and made to work in inhumane conditions, as safety standards are nonexistent in certain nations. Additionally, some experts believe that globalization has led to the spreading of infectious diseases, such as AIDS, since travelers can bring disease with them when they go from nation to nation.

The Impact of the Internet and Communications Technology

We can connect to a business around the world via the Internet as easily as dealing with a local store or office. These changes in travel and communication have truly made the world today "a global village", forever changing the way business is conducted. Even those that may seem to be small, local businesses are operating in a global environment. Today, you can order a new jacket from abroad as easily as you can from around the corner. Due to communications technology workers no longer have to be close to their managers and workers may well come from around the world. What happens in the economy in one part of the world has an impact felt, literally, around the world. When the financial news is a reported we get quotes from the New York Stock Exchange or the NASDAQ, from Hong Kong, Tokyo, London, and so on. The opening price in a country is often determined by what has already happened overseas overnight. Money, securities, goods and services, and workers flow from country to the next.

What Does Globalization Mean to the Consumer?

Globalization gives the consumer many more choices of goods and services, may lower prices, exposes us to a variety of cultures and experiences. Businesses, both large and small, develop new markets for their products, have access to a global workforce, and can tap into international raw materials and financial resources.

However, while there are many good points to globalization there are also concerns. For example, consumers may be exposed to unsafe products, have difficulty with unfamiliar unscrupulous or financially unsound businesses, could inadvertently run afoul of international law, or indirectly support activities that they would knowingly oppose.

What Does Globalization Mean to a Business?

Businesses may encounter similar problems to consumers. In addition they have to deal with fierce competition. No longer are their competitors those in their local neighborhood or country but may come from all over the world. All of the issues with which a business must deal - capital, human resources, marketing, entrepreneurship, business practices, laws, taxation, and so on - are exponentially complicated by globalization.