The paper "Impact of Globalization on Kenya" is an outstanding example of macro and microeconomics case study. Generally, globalization is seen as the process of transformation of local phenomena into a global one. This is seen when countries start connecting with one another into a global village. As such, globalization brings with itself both positive and negative impacts on the world and to the recipient countries. This paper analyzes the impact that globalization has had on Kenya as well as the challenges that have resulted from globalization. The paper will also analyze the efforts that Kenya is taking to deal with the challenges. Trade and integration Globalization has resulted in the mass production of goods and services.
The average trade between developing countries has risen rapidly over the years. Sellers in Kenya have increased the market for their goods and services while buyers have a wide market of various products to choose from. Companies in Kenya can source cheaper raw materials as well as quality ones from many parts of the world (Judy, 2009). Farmers in Kenya have obtained international markets which attract higher prices for their horticultural products for instance.
Economic integration among the countries as a result of globalization has resulted in increased trade. Removal of trade barriers and other tariffs encourages trade among countries. However, domestic firms may suffer when large organizations dump their goods in their market. For instance, Kenyan cotton making firms declined significantly since the introduction of second-hand clothes into the market from developed countries. Financial globalization has also been enabled by globalization. Companies in Kenya can allot their shares in the international capital markets where their shares trade.
This increases their capital base as well as improving the marketability of their shares. Technology Globalization allows any advancements and improvements to be communicated throughout the word. Improvement in technology has resulted in a significant improvement in employment levels in Kenya. The cost of production in the industries has been reduced due to fewer workers and less redundancy. The quality of output has increased. However, Kenya is still in its early stages of adopting extensive technology especially in the Agricultural sector (James, 2010). Most developed countries have adopted biotechnology as well as bioenergy which has resulted in sharp increases in productivity as well as relatively low prices will compete against those of developing countries. Migration and employment The temporal faction of low skilled personnel has had a positive impact on the Kenyan economy as well as other developing nations.
Such personnel are able to update their skills and this also results in brain circulation. The government benefits from such citizens through the remittances they make. However, a country’ s workers should not result in permanent migration as this slow down development in such countries due to “ brain drain” .
The most crucial sectors such as health and development would be left with inadequate personnel if the government allows the situation to get out of hand (Sarah, 2008). However, those citizens that acquire the skills and return to develop the locals result in economic development. The migration results in the erosion of the indigenous cultural practices as they adopt the foreign culture in order to fit in. domestic companies, on the other hand, are able to obtain highly qualified personnel from other countries. However, they are also at risk of losing their key employees to other international organizations who would be able and willing to reward them quite well as compared to the domestic firms.
Firms have adopted international management practices. Accountants have for instance adopted The Accounting Reporting Standards in order to standardize their operations with other firms all over the world. This has resulted in the easier comparison of operations and profitability of firms in different parts of the world.