Benefits of Globalization - Assignment Example

Globalization For many centuries now, human societies across the universe have developed more and more close contacts (Scholte, 2000). Presently, the speed states are getting globalized is significantly augmented. Exceptional alterations in transportation, technology as well as communications have presented the process novel impetuses well as made the universe more inter-reliant as compared to before. International corporations deliver products in distinct states as well as sell them to customers all over the world: whilst raw materials, technology and money also move more speedily across national borders. Furthermore, products and finances, ideas as well as cultures also flow more freely and quickly. It is apparent that, social movements, economies as well as laws are forming their basis at the global level. All this has been driven and catalyzed by globalization. Globalization also includes a number of political, economic and social adjustments (Scholte, 2000).Scholars have defined the term as a process of incorporation and interaction amid individuals, governments and corporations all over the universe; a procedure catalyzed by international trade investment, as well assessed by information technology (Scholte, 2000). Globalization significantly affects culture, political systems, economic development, environment, and on prosperity, all of which affects the wellbeing of personalities both positively and negatively in societies all over the universe. This paper aims at discussing the benefits and costs of globalization. Moreover, it will evaluate the key challenges that are being posed to the national governments because of globalization. In conclusion, it will focus on the impact of globalization to an organization. Benefits of globalization It is apparent that globalization has a number of positive effects universally. Globalization leads to the improvement of the International Trade, due to the unification of trade between countries, the number of states where goods as well as services can be purchased or/ and sold has tremendously increased hence creating a ready large market (Pettinger, 2009). This is because of the abolishing of custom duties and protective barriers, which in return make it possible for free, trade within the states. This leads to huge gains to these states as well as increased opportunities as the income generated could be invested to other programs such as education or health and safety with the aim of ensuring a continuous economic growth. Moreover, countries are able to gain access to the market for their technology and exports through the international transfers. The increasing shares of exports and imports in the gross domestic product highlight the growth of the state economies to the universal trade (Pettinger, 2009). Further, continued rationalization of the activities involved in production from the developed to under developed countries gives room for new opportunities to expand trade. This not only applies to trade in goods but also trade in services as it has become the main component to the global trade (Pettinger, 2009). Globalization as defined unifies the markets, systems of finance, communication, technology commerce, the law that bypasses traditional national, social, ethnic and cultural boundaries as well as commerce (Pettinger, 2009). This has had a greater contribution to greater specialization, higher standards of wealth, improved living, and efficiency of division of labor as well as eradication of poverty. Researchers argue that the current economic growth is greatly responsible for the improved living standards, which are enjoyed by those living in the industrialized world. Evidently, globalization has led to the international production and trade of goods accompanied by the various structures in production structures (Pettinger, 2009). This trade is characteristically defined by intra product specializations, which are the universal disintegration of a good to its sub- component parts as well as the distribution of the assembled product across the states. The technology changes in the contemporary world affect the strictures of technology as well as product flows across these states (Pettinger, 2009). The improvements of technology as well as transportation networks greatly contribute to the reduction of the costs of transportation. Further, information technology avails information worldwide at close to no costs. Consequently, lower communication and transportation costs have significant contributions to production activities nature, the market it relies on as well as the flow of information. The reduction of these costs also intensifies the competition and stimulates the determination of the economic sites available for the manufacturing as well as marketing the products (Pettinger, 2009). In addition, new technologies have led to a new aspect of globalization, which is the introduction of dynamic production forms (Scholte, 2000). Most nations have been able to turn from the vertically integrated means of production, which were previously operated from one location to specialized production forms, which are easy to spread across various countries. As a result, global production has been able to attain network extensions and as a result, most industries have become independent leading to intensification of competition of business development (Scholte, 2000). The competitiveness as well as the dynamic production forms leads to the concentration by firms to their main competencies. With the dynamism to quickly respond to the market signals, companies and nations at large are able to enjoy the advantage of being specific within the rapidly growing market and trade (Scholte, 2000). The high mobility of human resources across various states is linked to globalization. According to studies, globalization makes it possible for different states to source for manpower in the countries, which have available cheap labor (Pettinger, 2009). For example, the shortages of manpower in countries such as Malaysia and Taiwan provides countries which export labor such as the Philippines an opportunity to bring in human resources form their country to these states for employment. This will be an advantage to the exporting country, as it will receive income as well as the importing country as its production will improve from the increased input of manpower. In addition, globalization allows for the greater mobility of human resources to other states. The developed states such as Europe and US always take an advantage of the cheap and skilled labor offered mostly by the developing countries such as India and Philippines (Pettinger, 2009). This way they are able to manage their productivity and economic development while ensuring a stable market for their produce In addition, globalization has an effect on capital flows and finance (Pettinger, 2009). The increase in the technical capabilities for engaging imprecision finance for unbundling, re-packaging, pricing, and redistributing financial risks. The integration of national markets to expand the market of the products, investors to bring in new developments to the country in which they invest, bases and borrowers into a global financial market place. The blurring of distinctions between financial institutions and the activities and markets in which they are engaged; and the emergence of globally oriented banks and international financial corporations that secure development of most economies are all linked to globalization(Pettinger, 2009). Since globalization begun, states have experienced a tremendous growth in their economies. Furthermore, the increasing numbers of growing international trade as well as international capital transactions has led to a great increase in the everyday foreign exchange rates turnover. In addition, through the abolishing of restrictions imposed on the universe portfolio divergence in many developed countries, has largely attracted investors such as insurance companies to invest in other countries (Pettinger, 2009). Consequently, these investors were able to control a large pool of capital, which contributed to economic growth of these states. Costs of globalization The rules that govern the economic globalization are created through international law, trade agreements as well as the institutions that dominated the developed countries (Ikerd, 2012). These rules always favor those with an access to capital by abolishing the tariffs, implementing intellectual property rights, eliminating capital controls, privatizing public services as well as weakening the regulations, which protect the health and, labor as well as the environment (Ikerd, 2012). According to scholars, globalization is usually termed as American Economic Imperialism. The Americans used to competitive and individualistic culture tend to be insensitive of the rest of the world who face realities of culture erosion, abject poverty as well as environmental degradation (Pettinger, 2009). Consequently, exploitation of environment as well as labor goes unmentioned and so is the coercive pricing of services and goods, widening economic disparities, criminals evading legal controls, threat of traditional cultures, and tremendous growing debt among industrialized states (Ikerd, 2012). Of concern is the high concentration of wealth and power in the hands of the corporate elite in the developing world who set the terms of operation of many social as well as economic parameters in the contemporary world. All these factors create great despair and profound anger, which catalyze religious and international fundamentalism that results to an increase in international terror and violence (Pettinger, 2009). Similarly, inter country trade is far much exceeded by the intra states trade between regions even in instances where the geographical distance between the two nations is much smaller than the distance between the two regions within the same state(Barro, 2000). A good example is that trade within the US states is more than the trade between a US state and a Canadian province or any other country. Scholars report that the likelihood of a country such as US to buy goods and services from it is higher even with controlled factors of relative size and geographical distance and this poses a threat to attempts of further globalization (Barro, 2000). It is evident that though improved international trade which is as a result of abolished custom duties as well as a readily available foreign market, different studies conclude that this has led to inequalities within the developed and developing nations ((Barro, 2000)).There has been a huge inequality in the income distribution of these states (Agenor, 2003). According to researchers, globalization is said to have weakened manufacturing employment of developed countries in indiscriminate “giant sucking sound” of the jobs lost to the under developed world. Consequently, the new jobs in the developing world pay their workers much less as compared to the pay of similar work in developed states and as a result the workers around the universe are losing as a result of globalization and this remains a challenge to further developments. Furthermore, through the abolishing of restrictions imposed on the universe portfolio divergence in many developed countries, globalization has largely attracted investors such as insurance companies to invest in other countries (Agenor, 2003). Consequently, these investors were able to control a large pool of capital. Though this can mean additional of the wealth that is flowing in this countries, the form of globalization brings about inequality (Barro, 2000). Further, it leads to large-scale unemployment to the countries that these investors are located. In addition, the investors through multinational companies have such a huge influence on the national governments as well as transnational bodies, which include the World Bank and European Union, regarding policy formulation for instance provision of basic facilities. They influence them to meet the needs of the corporate leaving the rest of the citizens suffering (Barro, 2000). Challenges of globalization to national governments Over numerous centuries, globalization has changed the way and the context in which the national governments operate. Even, in the traditional context, domestic aspects are rapidly being influenced by the international effects as well as actors in a way that is beyond the ability of the national governments to control either collectively or personally. As a result of this, fears have evoked that the national sovereignty and policy autonomy is being undermined. In addition, the governments feel that they have lost control over their national policy agenda (Barro, 2000). Studies have continued to reveal that the global news media, the whims of globalized financial markets as well as the multinational enterprises greatly impact the demands of national governments as well as the policy accessible options to them (Keohane, 2001). Globalization allows the participation in the international organizations as well as the adoption of the universal agreements. This as a result leads to the pooling of the sovereignty and this reduces the room of the policy makers to maneuver (Keohane, 2001). Moreover, globalization also affects the internal balance of the power in a government. Economically, globalization is known to have presented a race for the bottom amid the national governments as they try to attract more ventures by cutting down the competitive rivalry by providing regimes of a less taxation as well as labor conditions (Cable, 1999). With the liberalization of the global trade, the race for the bottom is designated as leading to the attenuation of public revenue which restriction the capability of national governments to offer services that are publicly funded to their disadvantaged citizens(Cable, 1999; Keohane, 2001). Socially, the heightened populace migration as well as the rapid movement of communication movement is solely accountable for the erosion of the national identities of most states. The studies, which feel both disenfranchised and disadvantaged by globalization economically as well as politically, feel secluded from the traditional communities since they increase the movement of people as well as the migration of products and images of the transnational corporations (Cable, 1999). In the political perspective, the change of the international agreements has been a catalyst for changing the traditional differences between the international as well as the domestic affairs. Impacts of globalization to an organization From past researches, organizations have been seen to be exposed to the high forces of the global market, demand, competition, supply, their importance to the universal matters, political developments as well as the demographic changes rather than remaining under the protection of the local environment (Donald, 2000). Consequently, the interests of the stakeholders also get impacted by the net effects of similar set of factors rather than remaining as mere aspects to the local trends as well as situations (Donald, 2000). Experts have clearly indicated that the effects are common to all the stakeholders who include; civic authorities, investors, business managers, government, labour, suppliers, servants, scientific volumes, business firms, trade associations, civil societies, multilateral organizations, religious establishments, the young, the old, men and women as well as political parties. Apparently, the organizations, which have no capability to withstand the global forces, tend to lose their relevance as well as the struggle to survive. On the other hand, the organizations that are able to withstand the forces as well as the adjustments brought about by globalization are able to convert the opportunities brought about by globalization in to strategies that make them strong and relevant(Donald, 2000). Moreover, they are able to deal with global threats more effectively. This section will discuss the impacts of globalization on the organization of Turkish public administration. It is evident that Turkey is one of the States in the world that have been hugely impacted by the policies of globalization (Donald, 2000). The new right policies available were primarily demonstrated by the policies that were shaped by Mrs. Thatcher and Mr. Reagan. According to studies, these policies led to the procedure of reorganization of the nation since the early 1980s to the present years. A major indicator of the readjustments of the state is the establishment of the new sort public organizations commonly referred to as the administrative authorities or the independent regulatory agencies (Donald, 2000). With the deregulation and privatization of the policies, the role of the nation on production, accumulation as well as the distribution was made so weak. In addition, the role of the regulatory of the state came to the lime light. Evidently, the adjustments designated a transformation from the interventionist state to the arbitrator state. In conclusion, globalization brought about the creation of new legal practices and regimes as well as the expansion of some old forms, which are beyond national legal systems (Donald, 2000). Conclusion In conclusion, economic globalization is a very powerful force operating towards shaping the present world. As discussed in the essay, in significant ways, globalization is responsible for Improvement of the International Trade, international production and trade of goods accompanied. The various structures in production structures, globalization led to the integration of the three multilateral financial institutions as well as empowering and strengthening them, creation of peace among the various countries, as well as the influence of multinational industries and capital flows as well as finance. Besides, globalization causes inequalities between states. In addition, the relative size and geographical distance between nations poses a threat to attempts of further globalization. Encompassed in the essay also is the challenges that national governments face because of globalization and the impacts of globalization to organizations. References Agenor, P. (2003). Does Globalization Hurt the Poor? Manuscript. Washington, DC: World Bank Barro, R. (2000). Inequality and Growth in a Panel of Countries. Journal of Economic Growth, 5(1): 87-120. Cable, V. (1999). Globalization and Global Governance. London: Chatham House Papers, pp. 39 Donald, K. F. (2000). The Transformation of Governance: Globalization, Devolution, and the Role of Government. Public Administrative Review, 60(6): 488-497 Ikerd, J., (2012). The Real Costs of Globalization To Farmers, Consumers, and Our Food System. Accessed on March 21, 2012, http://web.missouri.edu/~ikerdj/papers/Globalization.html Keohane, R. O. (2001). Governance in a Partially Globalized World, American Political Science Review, 95 (1), pp. 1-13. Pettinger, T. (2009). Costs and Benefits of Globalisation. Accessed on March 21, 2012, http://www.economicshelp.org/blog/81/trade/costs-and-benefits-of-globalisation/ Scholte, J. A. (2000). Globalization: A critical introduction. London: Palgrave. Read More