Posted at 10.02.2018
Term Globalization is difficult to describe because it will come with a lot of meaning but according to Griffin Pustay Globalization can be defined as the inexorable integration of market, nation-states and technologies â in a manner that is allowing individuals, businesses and nation-states to reach out the world farther, faster, deeper and cheaper than ever before" (Griffin & Pustay, 2012, p. 32)
In standard, Globalization certainly had many changes in the world we live in; thus, it talks more about the trend towards countries joining together economically through culture, politics and education and they view themselves not only through their national identify but also within the world as a whole. It really is to be said that, Globalization has taken all countries people closer by using a common medium like the current economic climate or internet.
In the bigger picture, Globalization refers to the growing financial interdependencies among different countries and therefore it shows the increment in business of goods and services and capital flows over the countries border. It provides advantage to companies to operate across the globe in various countries and environment.
One silent trend which has helped bring changes in international business is due to transportation & technology. Due to advancement in technology, it`s foreseeable, the quantity of reduction in transport cost in previous two decades and has greatly impacted in declining communication cost as well. Across the globe; various businesses and federal government have followed technology for faster communication and effective management for international business which stimulates fast financial, creation and market globalization, resulting in speedy improvement over travelling and communication made trading easier and moreover cheap to reach new market everywhere throughout the world.
The heavy decrease in travelling cost has made companies to move its resources across globally at much smaller rate. However, it`s easy to anticipate and to say that globalization isn't lacking its supporters such as Basic Arrangement on Trade and Tariff (GATT); who's helping in reducing more and more tariff to bring up more opportunities to upsurge in abroad trade activities and investment and World Trade Organization (WTO); who is the only real global international business dealing with the guidelines of trade between the nations. In a nutshell, technological & travelling changes in past decades has brought not only different countries collectively but also offers given them more opportunities in doing international business.
The obvious benefits of globalization are largely combined with Multi-national Companies (MNC). Globalization has led to an unprecedented expansion of multinational companies. Thus, they have become very large and powerful. For example, some companies are well worth more than the entire Gross Home Product (GDP) of complete country. Mainly Multi-national companies have significant good or unwell effect on country whereby they conduct business. (Teacher2u, 2012)
In today`s time 'Globalization' is trusted to recognize worldwide phenomena. It`s provides positive meanings to the people that can advocate greater financial integration over the national borders; Led to rapidly growing international flows of goods, capital and investments, while it has given threats to. The following discussion is approximately pro and negatives of globalization that has taken into Asia-Pacific region.
Economic Progress: 'Economic globalization' is the procedure of integration of the world`s market. It refers to the lowering and removal of obstacles; such as trade constraints, quotas, tariffs and limitations between national borders to be able to import goods, services and capital from others countries. Hence, it results to experience more opportunities for a country to market investments and brings more investments which brings about more economic expansion and helps in creating more job opportunities for locals.
Employment Opportunities: Globalization led towards expanding countries world-wide, as a great deal of international companies are locating up their factories in expanding countries like ; China, India, Vietnam, Malaysia and Thailand. Thus, it helps in creating more job opportunities for the locals especially for countries like India and China whereby there people across billions, resulting in providing not only skilled employees but also an inexpensive source of labor which captivates certain establishments to create their factories and plant life as it also helps in improving their standard of living.
More Opportunities for Consumers: Developing countries symbol of your open overall economy, which stresses more on international trade and international investments helps in expanding choices for consumers ; As they can have a larger choice of products to acquire than previously and helps in bring more money and technologies from in another country. Thus, with increase in choices and systems helps in raising their quality lifestyle.
Example: Numbers of companies in the us has actually travelled to Japan to take a peek as how 'Toyota' company run its factories. Not only MNC`s but also government businesses from different countries have confirmed some curiosity about knowing their methods and tactics. Whereby, at the first place, Us citizens were the one who introduced constant improvement concept just as today`s time, Toyota is exercising that concept. It`s just not the sole example, as there are a great many other examples; where one country creates idea and gradually it spreads to other part of earth. This is only possible with the concept of globalization as without it; it could have never been possible.
Reduction in Economic Development: Where Globalization has given a whole lot of opportunities throughout the world in same way it has generated some negative influences over job ratio and economic development to such countries where ratio of importing is more than exporting. It`s important for countries across the globe to maintain balance of trade, whereby when import by one country is equal to export by the other country in economic terms - if the payments is in excess (Negative Balance) is named 'Trade Deficits' or ;'Trade Surplus' ; where there`s a good balance. When any industry gets didn't survive in virtually any country under intense international competition, then that country begins relying more on imports which led to imbalance of trade, resulting in world wide web exports will decrease as well as GDP and economic progress. (Libraryofeconomicsandliberty, 2012)
Adverse Effect on Environment: Although globalization has only turn into a widely recognized phenomena within the last few decades but its influence on environment is visible. Many looked at global actions as threating not and then environment but also to culture and traditions too. Example; Proposition is rather simple, the reason why economic growth is at upstretched is because of natural resources such as olive oil, timber, metal, silver etc. But it`s possible these natural resources are finite amount of designed for human consumption. More importantly, these resources are heavenly used as if n for gigantic economic extension of large growing countries such as India and china. All these facts mutually makes us recognize that eventually it would result to degradation of ecological system and possibly become the sole most critical danger for carrying on of current globalization. (Bernhardsdottir E. , 2010)
In Relating, High tech industries; computers and gadgets have expanded internationally, which is adding to heavy environmental cost due to making of semiconductors which contains several chemicals that harms human being health.
Widening Income Space: The upsurge in trade and capital moves influenced by globalization resulted in increase demand of employees and force up their wages for several skilled labors in a variety of business which do offers competitive benefits but on other hand, demand of unskilled workers declines, so their income. This widens the income distance in the country.
Countries like India, China, Russia and Eastern Europe have dense workforce available, hence forcing down the income everywhere you go. In today`s time, companies tend to invest and finding their flower where they can acquire minimum paid workers. At exactly the same time, due to improvement in technology in every single sector; demand of skilled staff are increasing as well and on other hand, technology is making a whole lot of personnel jobless.
The consequence is widening income distance is stretching around the world between highly skilled personnel and unskilled individuals, top one increasing rapidly, the center one increasing slower and bottom level one ceased or even declining. (Channelnewsasia, 2012)
Technology advancement acquired a great impact in the workplace in past few years.
Expanded Marketing: If we look from business point of view, one positive aftereffect of globalization over companies is that of 'extended markets' which contributes that if a business was offering its product and service locally only, can start reselling its product and services overseas as a result enlargement in market for taking advantage of opportunity and gain a competitive gain. Globalization has altered the business enterprise environment into a more competitive one and has given a great deal of new opportunities for extension of firm.
E-commerce mainly comprising distributing, buying, selling, marketing and servicing of product and service over electronic communication; internet has given a lot of boost to companies to expand their service or product across the worldwide.
Example: In today`s time, several companies doing e-commerce by using distribution route like e-bay, amazon etc. are widening up their market across the world in a faster way. One reason marketers favor e-commerce is because of few involvement of intermediaries in syndication channel, the good thing about this is the fact that fewer intermediaries means fewer middleman involved which eventually allows easy transaction between produces and consumers.
Another example, by which companies have the ability to capture their market is through the use of internet sites such as Facebook, Twitter, Myspace and the list goes on. Today, companies are taking good thing about social multimedia sites by creating their profile and publishing regular updated advert to capture global market.
Gains to Owners: 'Globalization' permits free movements of new communication systems such as - Usage of internet, E-mail, Cell phones and dish broadcasting offer to the people and providing them more chance to communicate in categories and gets access to information from both close and distant source quickly from around the world. Having information on fingertips, Multinational companies are tend to reply faster to the changing factor of income and enables those to shift their products from high-wage country to low-wage country, which eventually bring advantage to the dog owner and gain a competitive edge over others. (Internationaleconomics, 2012)
Managing Competition: It`s possible to say that international business encounters more competition than other businesses, as a company on other part of the world may be producing same level of product, it provides company acceleration of communication which permits them to stay ahead of their competition. (Ehow, 2012)
Example: Software like Skype, Words over instant process; allows workers to execute their job from any location via these software which can be access with web connection. Hence, it removes the barrier and permits companies to talk all over the world and in addition in today`s time it`s one of the cheapest medium or we can its cost efficient.
Dependency: Today`s population are more complex and depends more on technology, this means more companies are depending on technology like personal computers and other form of technology for achieving their day-to-day activity. So anyhow if any of their machines breaks or computer gets accidents, their work halts for the time until the condition is fixed. Hence, this kind of dependency put people at different disadvantage.