Pros and Cons of Globalization Contents
Pros and Cons of Globalization – Introduction
Globalization can not be seen as a single idea that can be embraced and defined within a time frame. It can not be defined as a process with a start or a definite end. Furthermore, it cannot be applied with certainty to all individuals across all regions. Globalization involves integration of the economy, transfer of various policies and regulations across borders, knowledge transmission, cultural stability, relations, reproductions and power discourse. (Mcausland 5-20). It certainly controls a global process. The concept of globalization is however quiet old. Some connotations refer to it with a revolution, idea, and worldwide market institution free from social and political colonialism, regression, and destabilization, while others refer to stability and growth, collaboration, and inclusion, and advancement. Globalization interpretation is described by the social status, political ideology, and cultural background, local and religious background, and ethnic background of an individual. According to Pugel (104-140), “In order to improve the global economy, globalization is the mechanism of communication between world nations. Globalization interpretation is described by the social status, political ideology, and cultural background, local, religious, and ethnic background of an individual. According to Pugel (104-140), “In order to improve the global economy, globalization is the mechanism of communication between world nations.
Thus it can be understood that no specific definition can define globalization that encompasses all its beneficial and negative characteristics. Many scientists and writers, however, have given descriptions that understand one or more globalization realities. Globalization is a method that reduces the world by reducing distances and bringing stuff closer to each other. It can be compared with the availability and ease with which individuals at one corner of the globe can interact at the other end of the globe, for mutual benefit. Albrow (1990) invented the word “worldwide society.” According to him, globalization can be linked to all those operations and procedures through which people around the world are integrated into a single world of culture, known as worldwide culture.
Globalization is increasingly becoming omnipresent (Friedman 10). It is regarded as one of the most important change in the history of human culture. This can be expressed in different fields, particularly in social constructions, widespread social interactions around the globe. The criticism of globalization has been discovered to be similarly powerful. Recent growth in numerous anti-globalization campaigns and organizations is evidence that individuals are not entirely satisfied with the policies and possibilities that a globalized economy provides. Globalization has caused weaker and smaller nations to lose their culture and traditional characteristics, according to critics. In nations, globalization has developed so many associations and pacts that the economic crisis spreads at a much quicker pace than anticipated from one nation to another. Critics also claim that more strong countries ‘ dictatorship over other nations is becoming clearer. Migration or financial flows can not be controlled by nations. Inequality and unemployment are other variables that have put globalization on the adverse side. The present study aims to analyze globalization pros and cons. Globalization and its different ideas will be discussed in order to gain a better understanding of its current status, history and evolution. In terms of its impact on multifaceted variables, the multiple benefits and disadvantages of globalization will be assessed.
History and Origin of Globalization
Discussing the history and origins of globalization is extremely difficult, as many perspective and theories surround on this issue. In the following section globalization has been described through five different perspectives.
According to this theory, globalization has originated from the basic urge of human beings seeking a more fulfilling and better life. This theory can be traced back to Ice age when primates left Africa in search of better security and food. Thousands of years have passed and the wandering across ocean and regions in still seems to continue. The four aspects of globalization which can be related to the basic urge were concluded to be missionary works such as religion, commerce or trade, conquest such as warfare or politics and adventures.
This perspective of globalization is described as a long term and cyclical process. According to this theory, it is very difficult to find a single origin point for globalization as it consist of a series of long term cycles and the most important of them do not come in any particular point or phase of origin. It suggests that in the past other global ages have occurred and they have been transformed into what is known as the new age of globalization (Baker, Epstein and Pollin 40-50). However, these ages or high points are destined to diminish and disappear in near future. The old era is eventually replaced by a new globalization cycle.
Globalization has occurred in waves of epochs, this is the third perspective for the evolution of this concept. Six great waves or epochs of globalization have been identified and occurred sequentially, each with its own origin point.
- Between fourth and seventh centuries, the world witnesses globalization in terms of religion such as origin or Christianity and Islam.
- Conquests of European colonies dominated the fifteenth century
- Globalization was introduced as a result of various intra-European wars between 18th and 19th centuries
- Occurrence of European imperialism between mid 19th century and 1918.
- Period after world war two
- Period after cold war
From the above points it was concluded that in today’s world, globalization cannot be considered unique. However, this view also rejects the cyclic perspective of globalization.
Role of Globalization is Structuring Economy
In order to understand economic structures associated with globalization, it is important to relate them with economic history. During the epoch (1896-1914), global progress was directly related to transportation developments such as steam ships and railroads. Compared to this, airplanes have played influential role in the recent global developments. Economic development of the globe largely depends on large scale capital flows.
It is interesting to note that globalization is mainly studied in terms of its effect of business and economy. However, much of its influences on various other aspects such as culture, habits, preferences and lifestyle often go unnoticed. For example, studies have been conducted on the spread of English as a global language and soccer or football as a globally accepted and favored sport, but most of these researches do not substantiate these influences in further detail (Tomlinson 50-73). For example, they failed to explain the cultural implications of these changes.
One of the important phases for globalization was the development of economy during and after First and Second World Wars. Depression and the two World Wars had left all major economies in a faltering state. However, during that time, globalization was more focused on political aspects rather than economic. As a result of these factors and increasing affinity towards internationalization, United States, United Kingdom and other major economies started major global restructuring. Major focus was given on reduction of trade barriers and free flow of investment and money. (Grossman and Krueger 360-370).
It is a multilateral organization with headquarters in Geneva, Switzerland. They have more than 152 nations as group members with the primary focus on the trade places as the centre of economic globalization. Every member state of this organization possesses equal right to vote. WTO as a trade multinational is expected to decrease various strains and stresses between developing and developed nations. While the organization is focused more on trade barriers which are non-tariff, as well as making sure that nations gain from open and free trade. It has been constantly criticized for providing insufficient help for the management of more complex trade barriers and not eliminating them for a better and free flow of trade (“Trade and Globalization”).
International Monetary Fund (IMF)
Macroeconomic stability is the ultimate goal of IMF, for both general economy as well as member nations. In more specific terms, IMF deals with balance of payments, exchange rates, capital flows in international terms and monitoring of the members states as well as their economic policies. The major criticism surrounding IMF is that it is seen as an organization which supports developed countries and tries to impose their regulations and policies or weaker or less developed economies (Boyer and Drache 50-75). However, supporters of IMF see it as a major key to the development of the economy in global terms. The organization deals with sophisticated factors such as monetary policies, majority of its policies and regulations which keep changing with the changing economy. Here too, the organization has been criticized for endowing the western nations with the powers of dominance.
One of the most critical parts of the World Bank group (WBG), World Bank is a specialized agency of the United Nations. The World Bank was established in the year 1944 and became functional in 1946. Member states of the international Monetary Fund have open memberships and the bank has more than 184 nations as its members. The major activities of World Bank include providing funds to programs sponsored and operated by government to part two countries also described as poorer and middle-income group nations (Benvenisti and Nolte 20-30). The mission is to develop productive resources and facilities in countries that are less developed, funding for productive results in situations when private capital is difficult to obtain on reasonable terms, facilitating international investment with the objective of promoting international trade, equilibrium and development in balance of payments and facilitating member countries with an improved living standard, productivity and labor conditions. Decisions made by the bank are expected to be purely economic and not on a political or any other grounds. However, the current policies and laws are not specific in terms of defining the specificities of the factors and situations in terms of their nature. Over the years, controversies have started surrounding the World Bank. The most popular is that the bank is dominated by developed and rich nations and less developed nations and non-states have a very little say in the decisions taken. The bank has also been criticized for encroaching on other agency’s activities and thus weakening them.
Pros and Cons of Globalization
As a result of various implications, globalization has been referred to as both positive and negative. In the next section, various pros and cons of globalization will be discussed.
Global trade has expanded in a rapid manner in the past two centuries. Since 1986, growth has been consistent and faster than the gross domestic product (GDP) of the world. Under the frame work of General Agreement on Trade and Tariff (GATT), trade liberalization was gradual and modest and the involvement of industrialized and developed countries was much more significant than the developing and poorer ones. However, at the beginning of 1980s, the extent of globalization as well as trade liberalization had begun accelerating, especially in developing and emerging nations (Boris and Haaff 38-40). This particular trade expansion was not uniform across all nations. The industrialized countries as well as a group of twelve emerging nations accounted for highest share in the trade processes. Compared to this, most of the developing nations did not get a chance to experience trade expansion in a significant share. There has been a decline in world trade in the recent past. This can be attributed to the sluggish economies and the continuous downfall of European nations.
Also Study: Globalization in Trade
Globalization has opened many opportunities and arenas for international trade. Consumers are now able to choose from a broader selection of services and products. In order to manage this ever increasing and ever flowing services, capital and goods, various institutions and government agencies have been introduced. Increase in international trade has led to enormous economic growth around the world such as creation of jobs, reduction in prices, raising incomes and an increase in the earning power of workers. However, this same trade can also bring political, social and economic disruption. As a result of the increasing interconnection in trade and economy, the sufferings and crisis are also being passed on to the developing nations from developed countries (Chintrakarn and Millimet 435-445). Thus, it can be said that international trade is also responsible for the rapid spread of the global economic crisis, which would otherwise remain concentrated in few economies only.
Globalization’s impact on women is more complicated and prevalent. Globalization sees no difference between women and man. However, the large scale deprivation of women from opportunities as well as resources has affected them more. Both positive and negative aspects are visible. With the increase in global networks in communication and exchange of cross-cultural factors, the overall status of women has changed (“Globalization and its impacts on women”). However, this change cannot be categorized as a large extent or high value change. Economists believe that the overall effect of globalization on women differs in different regions. For example, opportunities might be present in both development and developing nations but the resources and path will be different but much difficult in developing nations. Various religious groups which were previously strict with women are giving many opportunities to them (Friedman 55-75). Other opportunities provided by globalization are employment. With the expansion of mass communication and advertising medias, the awareness level of women has increased and they have better chances of proving themselves. Globalization demonstrated internet and created the opportunity for e-commerce. For example, with the help of internet and digital photos, more than 60000 women from the rural areas were able to deliver their services and goods in to the target market. This process has helped them in gaining better profits. With a boost in their income level, women are able to have more access to indicators of human development such as health, training, free access to communication and information, participation in political and social life etc. Apart from that, the participation of women in vital service categories such as banks, insurance companies, products, programming and retail have a profound effect on the overall performance.
However, the negative effects of globalization on women cannot be neglected either. Unfair deals happening in the free market space especially in the developing nations are forcing women to lose out on their jobs. There has been a continuous reduction in social services especially for women which have made them more vulnerable than male in many categories.
Outsourcing and Globalization
The concept of outsourcing was one the biggest discovery of globalization process. Outsourcing helped developing and emerging economies to transfer their talent and skills to other developed nations and got their exposure in the international business and functions. Various reasons can be attributed to the process and culture of outsourcing. The prominent advantage is that it saves capital. Majority of the organizations which provides outsourcing services are able to do so at a considerably less capital. This is more so in cases where they do not required to provide benefits to their employees and overhead expenses are fewer than in a regular on-role job. Outsourcing also helps firms in focusing on various other issues of business as most of the details of the core job are looked after by experts externally. This also means that a large quantity of attention and resources can be used for much broader and important issues within the organization. The specialized firm who handles the outsourced works is generally streamlined with the world-class capabilities and advanced technology which the outsourcing company cannot afford to buy. Apart from this, outsourcing business can also be regarded as a cost-effective method of building foundations in other nations.
There are however, few negative aspects of outsourcing as well. Outsourcing business is often criticized for eliminating direct communication as well as interaction between a firm and its clients. Thus, the firm is not able to build solid and effective relationships with their clients and customers. Many a times, this result in dissatisfaction on the client’s as well as company’s part. Once a project or work is outsourced, the outsourcing organization loses control over the project. This may prove to be dangerous in cases of delayed project implementation and communication. Also, a lot of sensitive and classified information are shared by the outsourced company. This makes the outsourcing firm vulnerable and open to various threats.
Environment and Globalization
Globalization has altered the global environment. The overall ecological impact is termed as both positive and negative. Globalization helps in fostering cooperative institutions and economic growth which is necessary for the long term operations and management of global environment. However, it has also resulted in force sinking of the globe in a hip of ecological decay. This has accelerated the destructive process as too many individuals are consuming too many resources, both natural and manmade. It can be said that its effects are far reaching and much more than planned and expected (Welsch 670-680). Critics have pointed out that globalization has resulted in an increase in food consumption creating an impact on the ecological cycle. As a result of the increased consumption, production of goods has increased and this has created an enormous stress on the environment. Raw material transportation has also increased as a result of globalization and boosted international trade. As a result, fuel consumption has also increased to an enormous quantity, leading to national fuel depletion and increase in fuel prices. In addition to this, increased consumption and transportation have also given rise to noise, water and air pollution. The amount of industrial waste generated is increasingly being dumped into oceans and nearby water sources which has resulted in death of a large number of sea creatures (Becker and Henderson 380-400). Toxins and waste produced dumped on land have affected the overall quality of the soil and as a result, the overall genetic makeup of the plants have been diminished. It is interesting to note that at one side, scientists and researchers are involved in creating genetically hybrid plants with the objective of better quality and nutritional value. On the other side, the same people are responsible for the overall degradation of the quality of food that they daily consume (Shafik 760-770). Dumping of non-biodegradable products into water and earth has made even worse impact and has resulted in the widespread pollution of the environment. Apart from the above factors, globalization has also raised concerns in terms of greenhouse effects and global warming. Global climate changes can be regarded by far the major impact of globalization (Brunnermeier and Levinson 10-20; Neumayer 35-40) High level production and use of products such as nitrous oxide and methane in land and farming practices and production of industrial gases which are unnatural and enhance the overall greenhouse effect are few of the factors responsible for the recent global warming. Also, deforestation and population growth have resulted in people using more natural resources thereby altering the balance of nature (Stern 45-74)
Technology and Globalization
In order to enable and facilitate globalization, technology was necessary and had emerged from more developed nations. The economic relationship between nations changed as knowledge became an increasingly important and critical component in services and goods productions. High technology and knowledge industries have become the fastest growing ones around the globe and for other nations to compete in these industries they require substantial investment in training and education. Thus, technology is easier for some nations than others. Typically, technology has been established in developing nations by large and multinational organizations doing business in these economies. As most of these corporations perform their research and development process in these economies, these nations suddenly become of highest interest in terms of new market development and penetration strategies. However, it has also been argued that this is decreasing the bargaining power of emerging and developing nations as well as increasing the MNCs power in international markets.
Technology has also enabled better and more effective communication between countries. Greater access to communication and information is impacting the world in a much profound manner. Digital technology has created new arenas to global networking system. Here all kind of knowledge and information as well as all ideologies important for the maintenance, realization and system reproduction are shared and enhanced. Since its development, technology has been used in a series of facets. Most important of them include communication and information technology, transport technology, security and maintenance systems as well as business information systems.
Essentially known as a global computer network, the internet has become a critical linkage to communicate the globe. Originally used by individuals from the military and defense regions, it has become more common in recent era. The role of United States can be considered significant in this phenomenon as they have a critical influence in facilitating the whole process.
There have been dramatic and exclusive developments in the field of telecommunications technology. Initially, the days belonged to ‘snail mail’ which takes weeks to arrive in case of overseas communications. Internet plays an important role in connecting individuals from all over the world. With the help of globalization, countries, governments as well as organizations are now able to communicate with each other without meeting personally. Video conferencing, chat programs etc have changes the face of modern business. Thus, business has become faster and more convenient as the individuals are able to instantly communicate with each other without any hinges. It can be rightly said that internet as well as communications technology has revolutionized social as well as business lives.
As a result of the advancements in transport technology, the effects of globalization have become much more prominent. With the invention of combustion and steam engine, the industrial revolution had started, almost hundred years ago. Since then, various technological developments in this industry have influenced transformation in rail, road, air travel and sea.
There have been dramatic improvements in personal transport too. Vehicles are now manufactured with better safety, fuel efficiency and faster, thus making them cheaper and more affordable. As a result, more people are able to buy cars now which have helped in increasing the overall living standard of individuals across the globe. Manufacturers are also concentrating on rendering these personal vehicles more environmental friendly so that minimum damage is done to the nature. Trade as well as tourism is now more convenient and affordable as a result of cheap and efficient airline transport facilities. Although the era of passenger planes started off vary late, there have been dramatic improvements in overall quality since then. These changes have been facilitated through the use of latest technological advancements, high-tech equipments for manufacturing and production. Researchers are constantly searching for newer and faster ways of technology which is continuously contributing to the overall living conditions of human beings all over the world.
Social and Culture Implications of Globalization
Globalization has impacted the culture in a diverse and immense manner. The overall affect on individuals across the globe is profound and visible. For example, Coca-cola advertisements are available all across the world crossing boundaries of cities, towns and even that of far reaching remote villages where even drinking water is not available. Globalization and culture can be explained through various factors.
- Globalization is rendering the culture heterogeneous. The diversity and variety of cultural products is increasing constantly and core cultural elements are getting mixed with each other (De Mooij 123-170).
- Globalization has also resulted in homogenization of the culture. Local cultures, particularly of the less developed as well as emerging nations are quickly losing their traditional values and aura and are getting highly influenced by American and western models. For example, Mc Donald’s and KFC, basically American food giants have spread across the globe in such a manner that it has become a staple outside food in every country where it has been established. However, this phenomenon has resulted in loss of sales and growth and ultimately shutdown of various local and regional food joints across the globe (Cojocaru 995-998).
- Another negative aspect of globalization is deterritorialization. It has been criticized for fracturing the splitting loyalties of the practices that are responsible for knowledge and understand within the social and family unit. As discussed above, globalization has lead to intermingling and mixing of cultures from different regions and nations. Previously stable relationships, social structures, cultural representations and social structures are being fractured as a result of this phenomenon. The cultural and human symbols have been disembodied from their original place. Thus globalization has indirectly resulted in detachment of cultural and social practices and blurred the natural relationship between geographic territories and culture (Hall 19-40).
However, globalization has also provided means to share traditions, cultures and experiences between various nations. This has improved the overall way of living of families and individuals. One of the most influential global phenomenons is the evolution of online communities. Last decade has seen an enormous rise in the popularity of online communities ranging from politics, business, culture, music to science, technology etc. Irrespective of the nationality, religion, culture and communities, people are involved in various discussions, debates as a team. This has given rise to a new acculturation phase. New identities of individuals have been created as a result of this. New methods, ideas of work as well as good governance and life are increasingly being shared even in the remotest corner of the globe.
Currents and ideas are being carried across continents through the global proliferation and it is resulting in sensitization of people in the remote areas to various global agendas and promotion of mutual agendas. A very good example of this kind of global phenomenon is global campaigning against organizations and brand names which are criticized for exploiting child labor. Such movements towards a bigger social justice and fundamental equality are taking place as a direct result of the growing awareness among citizens of different nations. These have been all possible because of globalization.
As a result of globalization and internationalization, increasing number of multinational enterprises (MNE) are participating in emerging and new markets primarily because of the worldwide integration of economic and financial system, lowering of entry barriers resulting in trade liberalization and deregulation as well as emergence of economic homogeneity and a global culture.
Globalization has resulted in increased competition. This occurs in terms of service and product costing, pricing strategies, technological adaptation, target markets, quick production, quick response etc. When an organization is involved in production of services and goods which costs less, the market share is automatically increased. The most important influence of globalization is that it provides opportunities and efficiencies created by open markets. Businesses are able to communicate in an effective and efficient manner with their suppliers, partners and customers. They are also able to manage their inventories, supplies and distribution network in a much effective manner. Thus the overall sales and profits of these organizations have increased manifolds (“The Good, the Bad, and the Ugly Side of Globalization”). Local producers are now able to sell their services and products into distant and far reaching markets with the same speed and ease as in their native place. Another positive aspect of globalization is the rising leverage and easy credit facilities. Easy flow of money across national and local boundaries has boosted the aggregate demand. Leverage and credit fuels the financial bubble and the global economy enters into a virtuous cycle of employment and income (Baker 150-170).
As much as globalization is credited for the booming of economy, it is also blamed for creating various factors. Globalization is criticized for increasing the gap between rich and poor. The opportunities provided by globalization are wonderful for investors and managers, but it has little or no gain for workers and lower level employees. Unlike higher level employees and management staff, these people do not even receive basic amenities such as leave, health insurance etc. As a direct result of this, the number of various lockouts, strikes and hate campaigns has been constantly increasing among members of various trade and labor unions (Agénor 2-10). Multinational organizations are also accused of unfair conditions during work, social injustice including poor working and living conditions, meager wages, mismanagement of resources, lack of environmental concern as well as ecological damage. During the early days of globalization, organizations were involved in commercial activities only. However, in the last decade, increasing number of multinationals are involved in political issues which influences their decisions. Critics fear that this might be a threat to the world as these corporations are quickly gaining power over the governments. Opponents have also criticized that globalization is responsible for giving way to rich organizations to act with less credit and accountability. Anti-globalists have also claimed that globalization has not worked for majority of the globe. Rapid growth in investment and global trade took place from 1960 to 1988. During this period, inequality got worse in both local and international terms. According to the development program of United Nations, out of the total world’s population, the rich accounts for 20 percent and they consume around 80 percent of total resources in the world. On the other hand, 14 percent of these resources are consumed by almost 80 percent of world’s poor (Davis and Thomas and Amponsah 45-50; Adams and Page 5-20). Globalization is then blamed for incursion of deadly and communicable diseases such as AIDS/HIV which spread through travelers even in the remotest corner of the earth.
Consumer Perception and Brand Recognition
This era of globalization is highly characterized by commoditization, competition and rapid obsolesce of technology. Brand managers and marketers are under new kind of pressure. Unlike previous marketing strategies which were concentrated on production and sales concept, now they have to focus on new and innovative conceptual bases in terms of designing and augmentation and continue their branding programs. Traditional marketing has lost its charm and effectiveness and strategic managers are now looking at integrated marketing communication as even mass advertising campaigns are not working enough (Medabesh and Mohiuddin 683-687). Sales promotion and discounts campaigning has been increasingly proved to be largely unbeneficial. Managers are also realizing that short term profit strategies will not be helpful for long term and sustainable growth of their organization. New services and products are also fading at a much faster rate.
There are two major challenges which the brand and marketing managers are facing as a direct impact of globalization and industrialization. The first one is customer and their perception. In today’s world, it is becoming extremely difficult to understand consumer and their changing minds (Kale and De 288-290). The other major problem is brand differentiation. Brand managers are finding it really hard to differentiate their services and products from other competitors (Wang, Solan and Xu 94-98). The objective of current marketing and branding strategies of organizations is creating a service or product which is significant, superior in terms of value for money and targets the exact market. However, with the proliferation of a large number of brands with similar offerings, it is very difficult to develop creative strategies for them. Few brands have however, learned the tactics at an early age and have made a permanent place in consumer’s hearts and minds (Keller 35-75). Brands such as Nokia, Coca-Cola, Mc Donald’s, Gillette and Emirates have learned and experienced in a simultaneous manner and have become the ultimate examples of rulers in the branding world.
Globalization has transformed markets and products into over-supplied and mature and this type of saturation have resulted in various implications. Now, managers cannot rely on classic marketing strategies and they are increasingly becoming less lucrative and obsolete (Agnes and Dubitsky 23-27). For example, banking sector and financial industry have seen enormous change in their business as well as marketing operations, as a result of technological revolution (Domzal and Kemsin 5-15). However, as a direct result of this the relationship between customers and companies is becoming more indirect and virtual which again is a concern for the customer relationship management strategies.
Brand managers and marketers are also facing a tough time understanding the unpredictable choices and actions of consumers (Loudon and Della Bitta 35-50). Loss of brand loyalty and commitment as well as freedom of choosing their own products has made it extremely difficult to judge the customers. Managers have now realized the increasing importance of offering a service or product which is of great quality so that the risk of switching decreases.
Another controversial aspect arising out of globalization is the country of origin, products and services (Suh and Smith 130-135). The world has changed into one single market where customers and companies from any region or nation are able to exchange products and services. However, a product or service made by US company might not be able to attract Japanese customers. In such cases, it is very difficult to construct a global strategy which will fit in every target nation or region (Machida 440-450). Age old rivalries and wars are another reason why particular brands and products which are loved in one country might be hated in others.
Terrorism and Globalization
There are a number of variables through which terrorism can be linked to globalization. Terrorism can be described as a weapon used by the weak against strong (Clark 15). According to critics, a major potential link between terrorism and globalization is the dominance of developed countries over emerging and various nations. Terrorism has been in the world for a long time. However, with the recent overpowering of America and other European nations over these nations, many new and unknown groups have started to take shape (Patman 170-175). Internet and readily available technology is another force facilitating terrorism. Financial and cyber crime have increased at an alarming rate. Google is a readily available source and anyone can gain information on things such as soaps as well as bombs. Poverty and unemployment in under-developed countries has also been blamed for the rise in different terrorist groups.
Terrorism has both direct and indirect impact on business. The situation has drastically changed after the attack on World Trade Centre (Pilat 172). Business relations with the eastern economies have become more fragile and complicated. Security levels have been increased at an alarming rate. It can also be seen that business relations are getting hampered as a result of terrorist attacks on different nations. For example-the recent Chinese insurgency have hampered the business relations between India and China. Import-export businesses have also declined temporarily as many business houses are afraid of doing business now.
The civilization today can be regarded as the post modern era. It is supposed to affect the perception and behavior of consumers across the globe. And if this is indeed happening, organizations must be able to accept and accustom to this trend. Another wide change which is visible is the booming of service sector both in good terms and bad terms. It has been seen earlier that many new forms of services are emerging and gaining popularity. However, it is also becoming increasingly over-supplied and mature. Further, innovations in technology have increased the chances of providing services through communication channels which are highly impersonal. All this has increased the overall competition within industry and companies are taking a more aggressive approach in order to create substantial brands with a volatile environmental dynamics.
The purpose of the study was to evaluate the various pros and cons of globalization. The objective was to understand the various benefits and negative effects of globalization on overall business functions. In terms of a broader perspective, the study also identified why it is important for brands and organizations to create sustainable brands in the current markets. Globalization has made way for free business and trade. It has also facilitated better communication around the world. With the evolution of technology, business operations have become much faster and efficient and the gains as well as profits are incredible. It can be rightly said that globalization has helped the world in becoming a better place for living. Other benefits of globalization can be summarized in terms of women empowerment, improvement in general health facilities across the world, intermingling of various cultures and societies as well as their issues. However, globalization is the reason for the generation of many negative issues too. As discussed earlier, environmental factors such as pollution, global warming have come to an alarming stage and even increasing industrialization is majorly responsible for this. Diseases which were not even known to exist are spreading to the remotest corners of the world due to easy and cheap transportation facilities. Decline of traditional culture and language is another disadvantage of globalization. For example, in most of the Asian continents, the idea of “Brand” is catching up. This implies that people are increasingly becoming brand and standard conscious and tends to buy international brands (Malota 95-100). Asian continent is known for its rich culture and tradition which is increasingly running towards extinction. Another major con of globalization is capitalization. Globalization has increased the gap between rich and poor to many folds. Political scenarios are getting worse and corporations are increasingly influencing the regional as well as national government. Deep rooted problems like poverty, unemployment etc are highly overlooked, especially in developing and under-developed nations. Apart from that, globalization can also be responsible for terrorism. With the help of technology and easy access to transport, various terrorist groups are able to reach places which are highly secure and unbreakable. Access to communication has also made it possible for them to plan from any place. The attack on World Trade center on 9/11 is a perfect example explaining how terrorism can greatly impact business and economy.
Thus it can be concluded that globalization has both advantages and disadvantages. It is up to the nations and business to devise and plan strategies which will help in minimizing the overall negative effect of globalization. It can also be concluded that globalization cannot be slowed down or stopped. However, the outcomes and spread can be checked. Business need to understand the relationship between globalization and changing consumption perceptions. It is only through continuous market research and observing consumer trend, that the brands will be able to attract and retain customers.
Impact of Globalization with Example
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