Globalization and Its Impacts, Costs and Benefits - Coursework Example

Running Head: GLOBALIZATION Globalization and It’s Impacts, costs and Benefits. Name Course Instructor Date Globalization Introduction The discussion as to what globalization is unending debate. Several factions concerned with what globalization is have tried to come up with diverse definitions in antempt to unravel the mystery called globalization. According to Frunza et al (2009), globalization is a process which is made up of cross-border and international flows of trade bringing investment, finance, ideas, information and labor markets into one market place. It is a process that links and hence makes the entire world a mutually dependent whole in issues to do with economics, culture and people. In other words, globalization connects diverse economies and the cultural life of people across the globe. In relation to socialization, globalization is defined as the intensification of social relations between individuals through out the world such that distance does not limit the influence happenings miles away affect the local community. For instance, dressing mode in a country miles away is accessible to the local community via the internet or satellite (Cooper et al, 2008). The reverse is also true where local happenings influence what happens else where. In 2000, IMF identified four basic aspects that can be used to describe globalization trade and transactions, capital and investment movement, migration and movement of people and lastly, dissemination of knowledge and technology. According to IMF, change is an integral part of globalization. There has to be a shift in the focus and the thinking process of the global people. Osunyikanmi (2011) on the other hand views globalization as the elimination of communication and technological barriers that results to destruction or a restructuring of economic and social-cultural arrangements. It is a process by which the dominant cultures are strengthened and weak cultures replaced thereby eroding existing local cultures to develop a global culture. Benefits of globalization Globalization has brought substantial benefits to the nation states that have embraced it around the globe. Some of these benefits include increased opportunities due to the interconnectedness of the world economies. New trade partnership between states is being created daily. This has enabled the developing nations to trade at the same scale with the developed nations. Being an extension of regionalism, globalization has led to the diminish of borders between states and in so doing increased the opportunities for free flow of trade. This has been attributed to changes made in policies by government to encourage global trade (Cooper et al, 2008). Globalization has also seen an increase in the efficiency of the agents of production. With the formation of multinational bodies, for instance, the World Trade Organization, a set of rules that govern trade internationally have been formulated. This has simplified the process of fetching raw materials in other countries as well as exporting produced products. Additionally, high-tech production equipment have enhanced production there by increasing the output and reducing wastage of raw materials during the production process. This has seen a drastic improvement in the financial performance of organizations that have taken advantage of every opportunity to reap maximum benefits from increased interconnectedness and existence of common borders (Phene & Almeida, 2008). Globalization has seen to the spread of technological innovations, sound economic policies and the existence of an educated workforce thus leading to a rise in the living standards of the people. The citizens of globalizing nations enjoy better paying jobs, have access to improved healthcare and can access a wider variety of goods and services at affordable prices (Phene & Almeida, 2008). Cheaper imports can also be accessed due to the existence of larger and diversified markets. With the presence of a strengthened communication network, information and knowledge can now be shared without barriers. Globalization has in this regard reduced the sense of isolation that those mostly in developing nations feel through increased ease in accessibility of knowledge. Globalization has also seen an increase in the cooperation and deliberation on issues by countries of the world. Issues about climatic changes and the environment have on several occasions brought together countries that share the same view on the same so as to formulate a workable end to these crises. This has seen an increased efficiency in performance due to shared tactics in problem solving. For instance, the global community has plaid a great role in emergency and rescue processes especially those resulting from natural disasters including floods, land slides, drought and earth quakes. Lastly, Globalization has enabled the division of labour thus enabling individuals and countries take part in what they do best. In this regard, countries can access what they are not in a position to process without any hindrances (Kim et al, 2003). Cost of globalization The application of globalization has had its fair cost on the global community. Let it not pass without saying that anything that man brings into being usually has a price to pay. First, globalization has brought about a social community and thus unifying the cultural beliefs of the entire world. This has led to the spread of common cultural values around the world, and in so doing has led to the erasure of distinctive national cultures that defined specific societies. According to Lull (2000), the growth in information transportation and communication cannot be managed, controlled or predicted. As a result, minority populations are left with no option but conform to the dominant culture for them to co-exist. This sees the most popular organizations and institutions generate powerful values that are based on self-serving agendas. Most of these values are offensive to other cultures but are the most preferred by the youths as they seek to fit in the ‘international society’. Secondly, the interconnectedness of the world economy results to a problem in one country creating problems in the other countries that are part of the said dependent web. The problem spreads to other nations because all of them are dependent on each other and thus a downturn in the economy of one affects the rest. This is also evident in the spread of deadly diseases and conditions such as HIV/AIDS. With the non-existence of economic boundaries between countries, a country and her people are open to exploitation of her resources by other countries. With no single global economy, a restrain on the economic exploitation could be in place. According to Osunyikanmi (2011), the development of the North cannot be explained without considering the exploitation of South by these countries through the process of imperialism, neo-colonization, colonization and neo-imperialism. These processes were in his view aimed at sustaining development in the North at the expense of the South. As a result, the south denigrated with every development that took place in the North. It can thus be said that the North sought for the manipulation of South’s domestic economies by first bringing in the aspect of integration of economies throughout the globe. Beine et al (2010) are of the view that cross border financial contagion risks can be reduced where financial stability exists and the world should pursue this. Another cost of globalization is the increased cost in taming global warming. According to Beine et al (2010), some aspects of such as industrialization, have resulted to increased carbon release in the air thereby destabilizing the eco-system. As a result, mankind has more complications to deal with as compared to the pre-globalization error including new conditions and diseases, diminishing of natural resources and a threat of extinguishing species. Every country is affected since they all share a common ecosystem. Supporters and anti-supporters of globalization face the same problem. With the breaking down of boundaries between countries to allow globalization to take effect, personal security is lost. The opening up of boundaries has made communities lose a sense of identity because it is the said boundaries that defined relationships between people from different communities. The tendency towards formation of a global community has resulted to social and cultural boundaries being broken with no regard to the natural boundaries that existed since earlier times. The diverse social, moral and ethical values that defined a specific cultural boundary have been ignored (Lull, 2000). Challenges posed by globalization for national governments Globalization, like any other development conscious undertaking has its own stumbling blocks. To begin with, globalization has resulted to the economic meltdown that is being experienced across the globe. This is attributed to the unequal growth output experienced in every corner of the world. The worst hit are the poor countries that rely on huge bank loans from the international community and the world bank. As the rate of inflation increase, the interest rates attached to these loans also increase thereby exerting pressure on an already economically challenged society (Frunza et al, 2009). The said financial downturn has led to a drop in the global trade and a reversal in the capital flow. This crisis begun with the mortgage lending that was experienced in the United States in 2007. Later on, several other manufacturing and service providing organizations went under. This has called for redefinition of policies to meet the demands of globalization while protection countries from its negative impacts (Cooper et al, 2008) Even with the advent of globalization, regional disparities between states still persist. The process of globalization that has resulted to technological advancement even in the weapons used for war has worsened the situation. This means that criminals can link with each other and plan attacks against a country regardless of the distance involved. For instance, it is this that made it easier for Osama Bin Laden to execute his criminal plans in different regions and countries including the US. The major challenge for governments in this regard is how to stop the criminal offences (Conley, 2004). Additionally, globalization has contributed to increased political instability in different countries. The ease in communication and increased accessibility of information on what is happening in other countries has seen young people organize riots through social websites such as facebook. Balancing between maintaining political stability or security and national development in terms of technological advancement is thus a challenge that many governments are struggling with. Globalization has increased competition due to the interconnectedness of the world economies. Countries with limited resources cannot compete on the same economic scale with the haves. This has seen international organizations and companies take advantage of the situation and establish their businesses in such countries. Though such actions have increased employment opportunities, most organizations have taken advantage of the high unemployment rates in developing countries to make low payments to their outsourced employees. UN’s Development Report stipulates that approximately one billion people around the world live below a dollar every day. People living in developing nations need more access to globalization in order to become part of the fast growing world economy (Stubbs, 2000). The challenge posed to governments in this regard is how to protect its citizens from exploitation yet remain receptive to globalization and national development. Since Poverty and poverty reduction is a major challenge facing governments in developing countries, they need to come up with a viable plan that will aid in poverty reduction by job creation while at the same time protecting the interests of its citizens. The impact of globalization on the organization in Virgin blue. Virgin Blue a major Australian Airline company on which globalization has had both positive and negative impacts. The company begun its operations in the year 2000 having been founded by Richard Branson’s. one of the positive impacts globalization has had on this company is increased output resulting from opening of borders. This factor has enabled the company to explore international markets and as a result, the company has eight international destinations using internationals carriers such as Pacific Blue and Polynesian Blue. Virginia Blue has taken advantage in technological advancement resulting from globalization resulting to increased out put. For instance, the company introduced e-ticketing making it easier for customers to book flights at the comfort of their home. In addition, the company introduced animated advertisement which results to attraction of more customers. These factors place the company on a competitive edge as customer loyalty increases. In addition, increased demands and need to save time make it one of the most preferred service provider due to the ease in accessibility of offered services (Hardt & Antonio, 2000). Adopted technological advancement have also benefited the company as the need for manual workers reduce. As a result, the company relies on a few experts to control the automated systems thereby saving on service production cost. The company can also buy goods online and in so doing saving on money and time. Ordering goods and having them delivered at their doorstep has really helped this company meet its customer deadlines and saving on hordes of cash that could have been spent ferrying the goods to their location. Globalization has also had negative impacts such as increase competition from new entrants in the business. For Virginia Blue, new competitors has forced the Airline company to drop its prices in order to attract more customers. Bearing in mind the increased cost of production resulting from an economic crisis throughout the globe, this strategy is not sustainable and the company is seeking for better measures of addressing it (Capling, 2001). However, increased operation cost also acts in the favour of Virginia Blue as new entrants are constrained. Conclusion As explained above, globalization has greatly reduced the aspect of ‘distance’ thus making the world a global village. This has brought with it huge benefits and every company, nation and individual has no option but to embrace globalization. While huge benefits have been reaped, the aspect of globalization leaves governments with more challenges to tackle that it has ever experienced before. This calls for keenness in development of new policies to ensure prevention of the diverse effects of globalization while at the same time maximizing on its benefits. Companies such as Virgin Blue must work hard to maximize on the benefits while taming the risks posed by globalization. References Beine, M., Cosma, A., & Vermeulen, R.,(2010).“The dark side of global integration: increasing tail dependence“, Journal of Banking and Finance, 34, pp. 184-192. Capling, A. (2001). Australia and the Global Trade System: From Havana to Seattle. Cambridge: Cambridge University Press. Conley, T. (2004). Globalization and the Politics of Persuation and Coercion . Australian Journal of Social Issues, 39(2), 2004: 183-200. Cooper, A., Hughes, C. & Lombaerde, P. (Eds). (2008). Regionalization and Global Governance: The taming of globalization. New York: Routledge. Frunza, R., Maha, L. & Mursa, C. (2009). Globalization and Regionalization in International Trade. Centre for European Studies, 1(2), 2009: 5-19. Hardt, M. & Antonio, N. (2000) Empire. Cambridge, Mass.: Harvard University Press. Kim, K. Park, J. & Prescott, J. (2003). The global integration of business functions: A study of multinational businesses in integrated global industries, Journal of International Business Studies, 34(4): 327–34. Kuttner, R. (2001). The Role of Governments in the Global Economy: In On the edge: living with global capitalism , by Giddens Anthony and Hutton Will, 147-163. Jonathan Cape: London, 2001. Lull, J. (2000). Media, communication, culture: a global approach. Cambridge: Polity. Osunyikanmi, A. (December 2011). Globalization and the deepening of gender imbalance in Nigeria. International Journal of humanities and social science, Vol.1 No.20. Phene, A. & Almeida, P. (2008). Innovation in multinational subsidiaries:The role of knowledge assimilation and subsidiary capabilities. Journal of International Business Studies, 39 , 901-919. Stubbs, R. (2000). Regionalization and globalization in political economy and the changing global Order (2nd Ed), by Stubbs, R and Underhill, G (eds), 231-234. New York: St Martin's Press. Read More