The Key Challenges Posed by Globalisation for National Governments - Literature review Example

The key challenges posed by globalisation for national governments A major focus of debates about globalisation pertains to the loss of sovereignty of states. According to Lynch (2003, p. 25), there is an emerging global order that supersedes national states and challenges the traditional role of sovereignty. Globalisation can be perceived to be resulting in a declining role for nation states and therefore, challenging the role of national governments as regards the control of these states. It can be argued that with increasing globalisation, national governments are steadily losing a significant degree of control over their national economies as they embrace economic globalisation. For instance, the Internet, which can be used as a good example of the global market, is virtually not under the control of any one national government. Governments may have regulations within their own states, but they may not be able to control what their citizens do with the citizens of other states using the Internet. As a result, the negative side of the Internet can be seen through the increasing number of terrorist groups around the world due to the democratisation of the Internet (Marsden, 2004). Also, there are cyber-terrorists who use viruses to bring down web sites or strike at security loopholes in commercially important software at any computer host. According to Marsden (2004), in the current world without borders, the hyperglobalised individual is as much important as the “hyper-power” the United States. Such Internet empowered citizens raise the greatest global security and developed challenges of the twenty-first century which governments cannot easily contain. Still on the role of states, Lynch (2003, p. 25-26) argues that the national state must decline in a globalised economy. This is because as developments in computing and telecommunications relentlessly advance, time and distance are compressed, national boundaries are eroded, and the domain of the global economy is increased. With such advances, it is argued that national governments are rendered mere servants of international markets and global capitalism. Williams (2003, p. 186) discusses this point by noting that there is no doubt that globalisation will usher in the meteoric rise of the large multinational corporation, and possibly the miniaturisation of the state, especially in the small state. Disadvantaged regions will only be able to flourish by ceding ownership and control to big multinational corporations of by forming alliances with them (Williams, 2003, p. 186). This is true in many African states where major multinational companies in the oil and mining sectors control significant stakes in the economies of these countries. Such governments are compelled to act as subjects of the large multinational companies in order to benefit from their favours. Closely related to the above idea is the point that globalisation leads to a destructive race to the bottom as advanced states are compelled to compromise environmental standards in order to compete with less-regulated producers in developing states. This theory is based on the assumption that lower standards give least developed countries a significant advantage in attracting capital and gaining export markets at the expense of the more developed states. However, according to the OECD, a lack of key labour standards plays no significant role in attracting foreign investment or in improving export performance (Griswold, 2000). Globalisation also creates a mixed blessing for the environment. On one hand, it creates opportunities for correlation but also leads to new tensions. For instance, with liberalised trade, there may be increased pollution, including transboundary spillovers of damage and unsustainable utilisation of natural resources. Economic integration also strengthens competitive pressures across national borders that may aid in lowering prices, improving services, and increasing choice. Nevertheless, these pressures limit government capacities to control and necessitate intergovernmental coordination of domestic policies and cooperation in the management of global commons. Without proper international-level governance, globalisation may increase environmental harms wherever regulatory structures are lacking (Esty & Ivanova, 2003, p. 4). How globalisation has affected Qantas Airways Qantas is a transnational corporation because it is active in more than one country and because it operates on an international scale. The airline operates worldwide and has joined strategic alliances to help in offering 600 destinations worldwide. This enhances globalisation as Qantas is accessing resources from many countries and trading in various currencies across the world. However, this in turn affects strategies adopted by the company to achieve employment relations in Australia. As Qantas operates worldwide, it needs to employ bilingual staff so that they can communicate with the host country and the domestic country that they are servicing. Another driver of globalisation as far as Qantas is concerned is global consumers. Global consumers arise due to companies’ marketing efforts going global and resulting in demand for a business’s product. Along this line, Qantas markets itself predominantly as an ‘Australian’ airline and places emphasis on its safety record. However, safety concerns in recent times have seen the airline lose its popularity and since it is a global company, this has occurred globally. This means that Qantas has lost a large share of its customers globally. There have been concerns that Qantas has not been meeting its own safety standards because it has outsourced aircraft maintenance services to offshore companies in Asia. Of particular note was the fact one of its Boeing 747 had engines that were not correctly mounted (probably because it was not inspected to Australian standards) (Kamenev, 2010). Globalisation has however remained to be a crucial aspect for the survival of Qantas. As noted by the company’s chief executive, Alan Joyce, there is need for further partnerships between Qantas and global airlines and expansion into Asia to overhaul the loss-making international operations of the airline. Joyce also noted that there was need for the company to move more jobs offshore to cut the company’s operating costs in Australia (Kamenev, 2010). The aim of this is probably to benefit from the lower cost of labour in Asian countries where Qantas has many operations. As a result of the impacts of globalisation, Qantas announced a major restructuring plan in 2010 that involved cutting about 1000 jobs, letting go so international routes and launching new operations in Asia, where costs are lower. That however did not save Qantas’ image as in October 2011, the company grounded its operations for some time due to disputes between its and employees globally. As such, more than 600 flights were cancelled, leaving 70000 passengers stranded in many cities including London, Los Angeles and Bangkok (The Economist, 2011); not to mention the losses that the company made as a result of this action. Conclusion This paper has discussed the meaning of globalisation and attempted to address some of the benefits and costs of the phenomenon. The term generally refers to the tendency by countries to come together and view themselves as one whole part economically, culturally and politically through shared activities such as trade, education, technology transfer and way of life. There are many benefits as well as costs of globalisation. The benefits include technology and education transfer, improvements in health programmes, and free trade. However, as a result of globalisation, there is an increase in the gap between developed countries and the least developed ones, and this is a potential source of conflict. Governments also have many issues to deal with as a result of globalisation. For instance, they lose their grip on the economy as the market tends to be a global one. There are also risks such terrorism and hacking as a result of the rise in Internet usage globally. Additionally, since globalisation creates large multinational corporations, governments of tiny states are left at the mercy of such corporations, meaning that they may not be able to control them. There may also be disregard to the domestic environment since governments may not appropriately control activities being conducted between two or more states. 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