Globalisation, Social Issues and Public Policy - Toyota Motor Corporation - Case Study Example

Globalisation, Social Issues and Public Policy Name Course Name and Code Institution’s Name Instructor’s Name Date Summary Globalization is a process through which people, companies and governments of different nations interact and are integrated via international trade and investment by the aid of information technology advancement. It is commonly associated with economic globalization, which refers to integration of national economies via trade, capital flows, migration, foreign direct investment, the spread of technology and military presence. Globalization has several benefits and costs. Globalization also presents different governments with special challenges. This papers provides definition for globalization, discusses benefits and costs of globalization, challenges posed by globalization for national governments and the impact of globalization on Toyota Motor Corporation (TMC). Definition Globalization refers to integration of regional economies, cultures and societies via a global network of political ideas, transportation, trade and communication (Gupta, 2008, p. 17). Globalization is commonly associated with economic globalization, which refers to integration of national economies via trade, capital flows, migration, foreign direct investment, the spread of technology and military presence (Rooney, 2003, p. 35). It has been found out that the main driving factors for globalization are economic, socio-cultural, technological, biological and political factors. Globalization can also be defined as a process through which people, companies and governments of different nations interact and are integrated via international trade and investment by the aid of information technology advancement (Leary and Warner, 2006, p. 33). Globalization in recent times has been spurred by opening up of economies on both domestic and international arena (Ritzer, 2007, p. 90). During this period, many states have adopted a free market economic system, which has enabled globalization to thrive. Advances in technology have also been known to drive globalization. Information technology has been instrumental in helping businesses to identify and pursue new economic opportunities (Yeates, 2001, p. 12). Globalization increases connection and interdependence between different world markets and businesses. Critics of globalization see it as the growing dominance of western forms of political, economic and cultural life. To my understanding, globalization is the process of integration and interaction between different economic, political and cultural practices in the global arena (Ritzer, 2007, p. 9). Even though there is interaction and integration of political, economic and cultural practices, I believe that the most stable and well defined practices will become dominant while those that are not well defined will be consumed by the most stable one (Rooney, 2003, p. 76). Consequently, some economic, political and socio-cultural practices may become extinct as a result of continued interaction and integration. This may result in a unified community in which major sources of social conflicts may vanish in the end. The benefits of globalization The benefits of globalization vary dependent on the continent. Thus, we shall outline them separately. a. Benefits if globalization in Asian countries The prevailing economic policies and advancements in information technology has enabled South East Asian countries to prosper which has resulted in increased employment growth rates Globalization has also enabled Asian countries to access foreign capital more easily and to enjoy increased foreign direct investment, which have laid down the foundation for a competitive thriving market (Lawrence and Weber, 2008, p. 87). The increased players in the market as a result of globalization have allowed consumers to get better products at a cheaper price. Thus, globalization has helped to counter inflation in Asian countries (Kennett, 2008, p. 32). Adoption of liberalized economic policies in most Asian countries have helped to reduce poverty in these countries Globalization has allowed other companies from other countries to bring newer technologies in IT and production and research. This has helped to cut down the cost of production and to increase sales at the same time. These technologies have also helped in sharpening the skills of local labour force in Asian countries. b. Benefits of globalization in Africa Most African nations have not embraced globalization (Rooney, 2003, p. 66). However, it is anticipated that when these countries open up their market to globalization, it may be able to tackle most of challenges facing the African continent (Ritzer, 2007, p. 99). Some of the benefits that these countries may reap from globalization include: Many people will have steady income from a stable employment which will work as a respite from the in-fighting Adoption of free market policies could increase enrolment of children in schools and hence enhance education and adoption of technologies, which may spur growth of their economies (Ritzer, 2007, p. 61). The countries will also be able to access more resources and foreign direct investment, which will ensure lower exchange rate of local currency. This will indirectly boost different economies in the continent. Globalization can also create a favourable environment for a fair and stable government and this will bring any African country closer to the rest of the world. This may help in monitoring and curtailing of any wrongdoing on the part of the government or a faction. Globalization also encourage signing of trade treaties and co-dependence in business. If adopted by African countries, this can result in major changes in the political, economical and social set ups in Africa (Kennett, 2008, p. 71). Adoption of policies that enhance globalization may result in more money, resources and people coming to Africa and this may see real and devastating problems of the continent being grabbed in the limelight and provision of relief intervention by the global community (Ritzer, 2007, p. 19). c. Benefits of globalization in American and European countries With globalization, firms are now able to outsource some services and production of some goods. This gives corporate firms to mete out work to its partners or offshore partners. This enables such firms to get work done at a lower cost (Rooney, 2003, p. 41). These rich countries are now able to utilize their capital in the upcoming new markets and new opportunities presented by globalization (Lawrence and Weber, 2008, p. 9). This is expected to generate more wealth and prosperity Intercontinental travel and migration are expected to resolve issues related to ethnic conflicts and diversity (Wijen and Pieters, 2005, p. 21). This is expected to provide an avenue for cultural benefits of globalization Multinational companies in these countries are the greatest winners in the process of globalization. This is because they are able to get new consumers, more profits, more employees and more assets. In addition, these companies are able to curve out a global image for themselves as a result of globalization (Ritzer, 2007, p. 69). The above benefits are peculiar to specific continents. However, there are other benefits, which cut across the global arena. Some of these include: Globalization raises competition (Ritzer, 2007, p. 17). The increased competition from foreign brands and companies compel indigenous companies to improve their quality and standards and consumer satisfaction services. This results in increased customer satisfaction, economic growth and raised standards of living. Globalizations also help in raising technology and know how. The knowledge levels of countries are greatly increased by globalization. This is because newer technologies and cultures are opened up to a certain country hence increasing its knowledge base. This enables a country to handle its primary and secondary industries in a better way, which influences positively on its tertiary sector. Globalization also raises opportunities on global arena (Leary and Warner, 2006, p. 77). Since globalization in increased number of industries and resources, the opportunities for people increases by large amount (Rooney, 2003 p. 80). Globalization increases the number of jobs available to people and more people are able to move abroad. As a result, immigration rates are increased which enables people to grow both economically and socially. Globalization also raises tolerance (Kennett, 2008, p. 93). Globalization has helped in eradication of fear and tension that has engulfed many nations for long and instead sowed seeds of cordiality between trading nations. This has also helped in appreciation of different cultures across the world (Ritzer, 2007, p. 92). Globalization has also raised investment levels. Foreign direct investment allows industries and native cities to grow at unprecedented pace. Costs of globalization Globalization creates capitalism without democracy and equal justice (Lawrence and Weber, 2008, p. 27). This is because research has shown that many multinational companies bully small firms into unfair trade agreements, which often force competitors out of business. Low wage competition in developing countries is increasingly displacing workers in developed countries. This is especially common among unskilled workforce who are unable to make transition to service oriented industries and skilled jobs (Leary and Warner, 2006, p. 31). It is also argued that globalization reduces sovereignty of nations in regard to economic policy due to integration into a global economy. It is being argued that developed nations will have a limited choice in tax and monetary policies because of the rules guiding globalization (Rooney, 2003, p. 92). Globalization is increasing leading to loss of some cultures. It is perceived that nations, which are economically powerful, are dominating the culture of less economically embodied countries (Leary and Warner, 2006, p. 22). This is because most wealthy countries produce many products, which can affect cultures of poor countries. The increase in global community has seen more people become ignorant about social, moral and ethical values, which define various groups (Ritzer, 2007, p. 23). Thus, globalization is putting small cultures at risk of becoming extinct. There is also a widening gap between the rich and the poor due to globalization (Lawrence and Weber, 2008, p. 91). The rich who have enough resources at their disposal, which enable them to be more competitive while the poor continue struggling and even giver up hence living the rich to continue amassing more wealth at the expense of the poor. Globalization has also resulted in exploitation of workers (Farnsworth, 2004, p. 121). Workers from less developed countries are being paid a fraction of what would have been paid in to workers in more developed countries. Due to globalization, the income generated in host country is not always spent there but instead is spent in country of origin of the company. Globalization has led to increased utilization of non-renewable energy, which in turn has increased pollution and global warming. In addition, firms can now outsource production from areas where there is no strict environmental regulations thus enhancing pollution. Globalization is also associated with labour drain. This is because in globalised economy workers move freely to places where their skills are most valued (Rooney, 2003, p. 88). Thus, some countries are not able to hold onto their skilled work force due to lower salaries that are paid by companies operating in such countries. Globalization has furthermore resulted in cultural and economic hegemony hence there is less cultural diversity since less fitted cultural practices are become extinct while the more fitted ones survive and become dominant (Ritzer, 2007, p. 12). Globalization is also decreasing the integrity of the environment whereby polluting multinational corporations take advantage of weak regulatory rules in developing countries to pollute the environment (Leary and Warner, 2006, p. 81). With the interdependence of economies of different nations, there is increased likelihood of economic disruptions in one nation affecting all nations (Lawrence and Weber, 2008, p. 27). There are also increased chances of civil wars arising between different countries as a result of fight for the resources. When compared, the benefits and costs of globalizations are both strong. However, one cannot run away from globalization. Thus, governments need to put into place policies, which allow globalization to take place, but in a regulated manner in order to deal with the shortfalls of globalizations (Rooney, 2003, p. 31). Trade treaties and agreements may help in providing such regulation, which will allow both local companies to thrive as they go global (Leary and Warner, 2006, p. 86). In addition, companies allowed to invest in such countries should be requested to promote local culture rather than imposing their culture on local people. This will help promote diversity rather than killing it (Lawrence and Weber, 2008, p. 131). The impact of globalization on economic, environment, culture and social practice of people they ought to be considered by governments when laying down procedures that guide treaties signed by different governments to ensure that the needs of local communities are considered in the treaties. Key challenges posed by globalization for national governments One of the paradoxes of globalization is that the global inequalities resulting from this engenders terrorism (Ritzer, 2007). By eradicating traditional identities and cultures, globalization encourages religious fundamentalism, which in turn produce new networks centred terrorist organizations that function through state less networks (Wijen and Pieters, 2005, p. 118). The development in technologies facilitates international crime and assists terrorism. Another challenge facing national governments is the loss of control over their national policy agenda (Rooney, 2003, p. 44). Due to globalization demands on governments and the policy options available to them are influenced by many groups including national and international interest groups, multimedia enterprises, the global news media and the globalized financial markets (Leary and Warner, 2006, p. 43). Thus, the room left for policy makers to manoeuvre is reduced due to globalization. The interdependence that is created by globalization has also narrowed the degree of domestic policy independence. Another challenge of globalization to national governments is that it compromises national economic interests. In global world, national governments are not able to represent the economic interests of the national community. This is because trade is liberalized and the financial strength of transnational corporations and the international mobility of capital overshadow national economic interest (Ritzer, 2007, p. 83). The sovereignty of the country is also compromised by globalization. This is compromised by the emergence of global crime and the changing character of international law and instruments such as treaties and the increasing importance of non-government and multi state organizations in the scrutiny of the domestic policies of national governments (Rooney, 2003, p. 72). Most countries have laws, which are viewed to be supreme to any other law and this aid in watering down the effect of international law in global arena. National governments are also being faced by the challenge of erosion of national identity. The social cohesion, which is vital for the maintenance of national communities, is being eroded by global forces driven by globalization (Lawrence and Weber, 2008, p. 61). It is argued that national identity is being eroded via increased mobility of populations across the world and advances in communication networks globally. Strategies/policies to mitigate the challenges Policy makers should use pre-emptive action such as instruments of economic and financial integration including possibilities of fighting money laundering and terror financing internationally to address global security risks (Leary and Warner, 2006, p. 95). This will not negate further integration but will promote integration for security purposes. National governments should integrate multiple interests into policy to help them to improve democracy at the international level (Rooney, 2003, p. 69). When entering into treaties governments should ensure that, the arrangements for consultation with labour and business should be augmented by procedures, which allow consultations with other interest groups (Ferguson, Lavalette, and Whitmore, 2005, p. 54). Governments should also ensure that these procedures are well managed to ensure that policy formulations do not face many challenges. Most governments enact laws, which require that foreign investors and companies appreciate and promote local cultural and social practices and that they are not involved in practices, which are seen to undermine the norms, and cultural practices of the local communities (Lawrence and Weber, 2008, p. 88). Governments are involved in controlling the firms that operate within their jurisdiction by laying down regulations and procedures, which foreign investors and companies have to adhere to, or else they loose their license of carrying out business. This aids in ensuring that national economic interests are taken into account. Impact of globalization on Toyota Motor Corporation (TMC) TMC has been able to exploit extensively cheap labour, both onshore and offshore, and it has been able to substantially reduced operation costs through state and local subsidies and tax abatements, which have boosted the revenues of the company (Lawrence and Weber, 2008, p. 91). Thus, TMC has greatly benefited from globalization. The success of globalization of TMC has been at the expense of working people in North America and around the world. The imperative globalization of TMC to exploit cheap labour markets has resulted in creation of conditions, which undermine labour on two distinct levels (Rooney, 2003, p. 51). First is creation of competition for work between the workers and different regional labour markets. Second is the stratification of workers within regional labour markets (Leary and Warner, 2006, p. 54). The competition and stratification has led to different wages paid to workers in different regions. The relocation of TMC manufacturing plants in North America has been enabled by various globalization schemes and agreements like the North America Free Trade Agreement (NAFTA), which has offered TMC and other multinational corporations virtually unrestricted access to national and regional labour markets. TMC has effectively used surwages strategy to increase profitability of the firm. The economic impact of TMC on the community parallels the impact on labour (Leary and Warner, 2006, p. 93). Even though few individuals and groups benefit from the presence of the plant in their locality, the community is loosing at large (Ritzer, 2007, p. 103). Because of tax abatements on the firm, local community educational funds has been lost. The influx of new employees in the region where the plant is established imposes increased demands on the local schools. Conclusion TMC is an illustration of how globalization affects negatively on the environment. Even though in Texas TMC plant has been recognized as environmentally responsible manufacturing plant, in other jurisdiction Toyota worldwide operations contribute significantly to two environmentally ruinous trends. First, globalization has allowed TMC to externalize industrial pollution by locating dirty manufacturing processes in nations without environmental restriction. Thus, most of parts of Toyota are outsourced from unregulated regions. The second is pollution caused by shipping industry, which transports Toyota cars. This is causing dangerous atmospheric contaminations. Reference Farnsworth, K. 2004. Corporate power and social policy in a global economy: British welfare under the influence. London: The Policy Press. Ferguson, I., Lavalette, M., and Whitmore, E. 2005. Globalisation, global justice and social work. London: Routledge Gupta, E. 2008. Liberalisation and globalisation of Indian economy. London: Atlantic Publishers & Dist. Kennett, P. 2008. Governance, globalization and public policy. London: Edward Elgar Publishing. Lawrence, A., and Weber, J. 2008. Business and society: stakeholders, ethics, public policy, 12th Ed. London: McGraw-Hill Irwin Leary, V., and Warner, D. 2006. 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