Roles, Advantages, and Disadvantages of Current Globalization - Example

International Business Name Institution Course Date International Business Introduction From the mid 19th century interaction of people from different continents and regions started improving. The main driving force by then was due to improvement in transport and communication as a result of numerous inventions. Moreover, with the advent of industrialization, colonization and missionary work the interaction of people from different regions increased. The basis of globalization can be seen as being laid by explorers, missionaries, industrialist who left the comfort of their homelands to go and search for new opportunities and challenges. With the emergence of monetized economies that operate like open systems, globalization has been taken a notch higher since no country can claim to be an economic island. Each country needs inputs and outputs that can be sourced or disposed through import and export and thus, the growth of globalization. Not only did the above factors contribute to globalization other factors like reduced trade barriers through legal and political agreements have their roles. Moreover development in telecommunication industry has even redefined globalization and given it a new dimension. This paper examines the concept of globalization in relation to the field of international business by exploring seven major themes. The themes that this paper explores include the start and the end of the firs era of globalization, the second era of globalization, how the first and second world war affected the first and second globalization eras and the influence of technology. The second segment of the theme that the paper explores is the colonialism and tariff and how it decreases importing and exporting between countries. The subsequent include the role of GATT agreement, the World Bank system, World Trade Organisation. The final segment will be advantages and disadvantages of current globalization and the role it plays. Chronological Brief of Globalization The Start and the End of First Era of Globalization In historical perspective the first era of globalization can be traced from 1800 to the end of world war one. During this period most of the historical significance happened in Europe. The first starting point is the scramble and colonization of other parts of the world like Africa which were new resource frontiers. The second is agrarian revolution; the third is the industrial revolution & technological revolution in telecommunication and transport. The fourth is the political revolution by moving away from feudalism, aristocracy and monarchies to democratic governments and the last one is the world war one (Baizol and Kozul-Wright, 1996, p. 4 and 5). One aspect that contributed to opening of the world by people moving from one point to the other is the agrarian revolution that brought to and end feudal system of farming to a more commercialized approach. These reorganization made some landless and thus they had to venture out. The most notable in this case was Britain. Moreover crop failure in Ireland especially Irish potato led to massive emigration to other new countries like United States of America and Australia. This kind of interaction was on hindered by eruption of world war one 1914 that brought about massive depression and fall in international trade (Baizol and Kozul-Wright, 1996, p. 4 and 5). The Second Era of Globalization In the 20th century and with the end of world war two, with the high rate of industrialization, improvement in transport and communication interaction of people irrespective of the geographic location and origin has increased tenfold. The other contributing factor that has led to globalization is traceable after the end of world war and closely related to the above is the ability of countries to formulate policies that have allowed for easier movement of people from one region to the other. The contribution of this is that it has lead to reduction of trade barriers and social barriers and thus, the flow of goods, services, people and technological knowhow is smoothen. It is during this era that League of Nations now renamed UN emerged, various trade blocks and trade agreements emerged, and others are like World Trade Organization and International Monetary Funds among others (Baizol and Kozul-Wright, 1996, p. 8, 9 and 10). The Influence of World War 1 and 2 on First Two Phases of Globalization The first positive effect formation of League of Nations. This provided a global platform that countries could come together interact and provide solutions to numerous challenges affecting the whole world. This realization that gave birth to United Nations has continually snowballed and created a ripple effect so that numerous organizations sanctioned by United Nations have emerged. For most of them the overriding theme is that we have got only one planet and must leave in it through corporation. Apart from the above there are other regional agreements, that are multilateral or bilateral that are aimed at strengthening interaction between different trade blocks or political blocks (Baizol and Kozul-Wright, 1996, p. 12 and 13). In a nutshell, these blocks can be for political, economic, technological, military, social or environmental purposes or even both. The essence is that they are strategic and enhance global interaction at country level and individual level. The other critical impact these war had was on expansion on transport and telecommunication due to massive research and investment, a good example being development of internet by American military. On the other hand, the negative effects that these wars led to polarization of the globe starting from the allied forces, then the countries with Marxist leaning and others with capitalistic views. This normally brings tension as was seen during the arms race of cold war (Baizol and Kozul-Wright, 1996, p. 15). The Influence of Technology on Globalization With the emergence of industrial revolution, technological revolution also emerged to support industrial processes. The technological revolution also happened in numerous spheres of life, these include transport, telecommunication, human health and medicine, manufacturing, engineering, construction, space exploration, maritime affairs, warfare and military science. However, the most notable is the revolution in transport and communication. In earlier years with development of steam engines and ships transportation was eased at internal and external level. Presently, we have multi international companies that operate in numerous countries outside their home area due to these factors (James, 2002, p. 11, 12, 13 and 14). More recently is the strengthening of communication and precisely the internet and mobile communication. It is said to have reduced the earth into one small village due to what is called ubiquity or universalness of the internet. Currently people can trade online, interact in social media platforms and access and conduction other functions through real time platform. In addition accessing market information, country’s profile and socio-cultural factors is easier as compared to earlier centuries. In addition, improved transport both at regional levels and at international levels through road linkages, rail linkages and air travel has open more economic, social and political space while also increasing interaction and widening market base, access to different products and lastly increased competition. Colonialism In a critical view, colonialism had negative effects at the global scale and local scale such as portioning of new boundaries irrespective of social and ethical grouping, slavery and net transfer of resources to the colonial masters. However, it has to be appreciated that it also played a crucial role in enhancing global interaction in terms of education, trade cultural exchange among others. It is out of these that one can find huge number of Africans in Europe and America. On the other hand, since at this time European countries were the leading super powers in terms of military, maritime technology, agriculture, manufacturing and telecommunications, they were able to impart these skills onto other parts of the world. Moreover, with their policy of teaching natives their languages global interaction was made easier as we now have roughly five to six global languages. The next important aspects related to opening of remote interiors for exploitation through rail networks that have come define the present countries. These activities led to enhanced interaction in terms of trade, cultural exchange and education. This is true because it is these routes established by the earlier colonial masters that are still being used with some modification (Baizol and Kozul-Wright, 1996, p. 2 and 3). The role of GATT agreement World Bank and World Trade Organisation The big role of these organisations is to break or reduce trade barriers that exist among and between nations. For instance, the biggest contribution of Bretton wood institution is the adoption of US$ as the gold exchange standard. This has made valuing of money and exchange in foreign currency easier. On the other hand, General Agreement on Tariffs and Trade has contributed towards reduction of trade barriers with most of its hallmark being the creation of world trade organisation. World trade organisation has been able to rope in more than 150 state members. The body has been critical in smoothening trade flow, integral in negotiating the opening of markets and trade dispute settlements (Michalopoulos, 2000, p. 4, 5, 26 and 27). Roles, advantages and disadvantages of Current globalization The greatest advantage of this concept is the opening up of a huge market base for any company to utilize. This has led to emergence of multi international firms. In addition, this has contributed to fair competition where the best who are able to produce at low cost with high quality survive. Moreover, it has allowed for multilateral exchange in different fields by numerous countries hence, allowing for information flow. The last is the development of oversee business process outsourcing that leads to job creation and reduction in operation and production costs. The big disadvantage of globalization is that it has resulted into domination of young nations which are economically, politically and military weak. In the end result they act as recipient and non players in global arena. This has led to emergence of product dumping, brainwashing, net wealth transfer to the dominant countries and imbalance of trade. This means that these countries can not catch up with the already most developed seven nations (G7) and the developing ones that are in the bracket of G 20 (Bozyk, 2006, p. 3, 4, 5 and 6). Conclusion While globalization has two way effect of being positive and negative, most of its fruits are positive. The advent of globalization from 1800 to present can be seen to be a productive happening since the emergence of the world. It reduced numerous barriers that would otherwise hinder the interaction of people who would have remained as an island. One contribution that globalization has contributed to is the opening of international arena for businesses to sell, buy and compete. This has eased the lives of most who would not afford to produce or access those products. Moreover, the process has helped in reduction of social barriers and discrimination thus, making the world friendlier. The last is the ability of it to bring the globe at one table so that they can provide measures to common global problems like global warming. References Baizol, P. and Kozul-Wright, R. (1996). Globalization myths: some historical reflections on integration, industrialization, and growth in the world economy. UNCTAD/OSG/DP/113. Retrieved from: http://unctad.org/en/docs/dp_113.en.pdf Bozyk, P. (2006). Globalisation and the transformation of foreign economic policy. Aldershot, Hampshire: Ashgate publishers. James, J. (2002). Technology, globalization and poverty. Cheltenham: Edward Elgar Publishing Michalopoulos, C. (2000). Trade and development in the GATT and WTO: The role of special and differential treatment for developing countries. Retrieved from http://siteresources.worldbank.org/INTARD/825826- 1111405593654/20432097/TradeanddevelopmentintheGATTandWTO.pdf Read More