Market Failures within Globalization - Essay Example

Sub Department 1A Market Failures A monopoly can be described as a business which is the sole provider of a service or good, in the process giving it remarkable competitive edge over its nearest competitor who attempts to offer the same product. Such monopolistic power is not good for business. Microsoft has been many a times been deemed a monopoly and with such power, the company can easily drive its competitors out of their businesses, in addition to preventing potential entrants which may also result in significant harm especially to the households owning the businesses that are made to close their doors. Microsoft has been known to possess monopolistic power in the manufacture and market for operating systems for most Personal Computers, in addition to being involved in far-ranging attempts to defend its operating system monopoly through using a wide range of exclusionary practices .Finally, Microsoft activities have been harmful to innovation and by extension to consumers (Eisenach & Lenard,2000). 2. Microsoft’s monopolistic practices are harmful to consumers in that the corporation being the sole provider of operating systems can set practically any price that they want, a process known as price-fixing. Price –fixing can be easily done in spite of demand, since the company is aware that consumers have no choice. Secondly Microsoft can even supply products that are inferior a practice that can further injure the consumers. Thirdly Microsoft’s monopoly kills innovation simply because the company lacks the incentive to innovate and thus fails to offer new as well as improved products; something that makes consumers enjoy what they want and how they want it (Gow, 2007). 3. Companies like Microsoft should be regulated because their dominance can hurt consumers by allowing the corporation to overprice its products in addition to suffocating innovation by competitors, keeping them out of the market fearing demolition by the main player. Microsoft therefore should not be permitted to dominate as it had done before for instance through abusing its operating system through incorporating its own Media Player capable of playing films and music, into its Windows operating system. This practice shut out other competitors such as RealPlayer. Microsoft therefore should be regulated so that other companies can grow and innovate especially in this information economy. 1B 1.One of the most profound experiences I have had of globalisation is with Amazon.com.Amazon.com is the biggest internet-based retail store in America which began as a bookstore soon diversifying into selling DVDs, Blu-rays, CDs and Video streaming/downloads. I am a frequent customer of Amazon.com and I usually buy a lot of items from them such as books, movies as well as latest songs. 2. There are numerous contexts where I have encountered the word globalisation. These include such circles as academia world, journalism and publishing. Other encounters include such aspects as trade as well as migration as well as movement of persons, transactions, capital together with other investment as well as knowledge dissemination. Other contexts comprise of cross-boundary air and water pollution together with over-fishing and lastly global warming. 3. Globalisation to me is the process whereby economies of different nations worldwide become increasingly interconnected with each other. In an economy that is globalised, persons from one nation can purchase goods quite readily from other nations. Currently, persons in one nation can easily purchase even services from other nations, for instance, due to internet availability; a company can hire accountants from a country such as India for their tax compilation. Because of globalisation, trade has increased across various national boundaries and one multinational can have numerous subsidiary plants and branches in several nations. In addition, trade barriers have been extremely lowered as well as simplification of export and import procedures. There are numerous advantages associated with globalisation such as more employment prospects for people as well as access to larger markets for businesses (Sparke, 2012). 1C The idea of corporate social responsibility implies that corporations and businesses have ethical, philanthropic and moral responsibilities besides their responsibilities of earning a reasonable income for their investors and being compliant with the governing regulations in their business environment. The traditional perspective for an organization recommends that it’s fundamental, if not only responsibility to its stockholders or owners is profit making. Nevertheless, CSR requires corporations to adopt a wider perspective of its responsibilities comprising not only its owners but also several other community components as well usually made up suppliers, employees, local community, customers ,environmental groups ,the government and other special lobby groups. The following are some examples of social responsibilities that corporations can be involved in; philanthropy which involves donations to local and national charities and comprises giving time or money which highly benefits such charities and other community programs. Secondly businesses can be involved in environmental conservation and since most businesses have carbon footprints they can take bold steps in reducing such footprints. Businesses can also ensure that they are involved in ethical labour practices mainly by treating their employees in a fair and ethical manner (Gossling, 2011). 1D These business havens are good for business in that they offer access to labour that is cheap and affordable enabling businesses to open up factories overseas. Businesses can also effectively outsource and make use of local producers in manufacturing of their products. In addition, these business havens offer increased economies of scale and better possibilities of creating the next “global brand” with the prospect of becoming multi-nationals (Logue, 2010). 1E The makings of a successful entrepreneur include executing one’s vision based on the vision that they have, making effective strategies as well as having the right team to execute the action (Wadhwa & Aggarwal, 2009). The following are some of the common traits found in any entrepreneur; True entrepreneurs are always solution oriented and constantly motivated to make change using limited resources, something which is best achieved by creativity and innovation. Secondly entrepreneurs have a strong belief in themselves and what they are doing. Thirdly entrepreneurs are tenacious and do not give up easily and keep on going in spite of what may come. Entrepreneurs are also innovative and posses the capacity to challenge status quo by coming up with not only new but also better solutions to tackle environmental and social problems (Wadhwa & Aggarwal, 2009). Entrepreneurs are also passionate about their enterprise and are usually self-driven people who not only engage but also motivate those around them. In addition, entrepreneurs are risk takers and successful entrepreneurs normally are good at measuring (formally and intuitively) the balance between reward and risk and usually make their decisions on this basis .Lastly entrepreneurs are also good communicators, impatient, strong leaders, focused and resourceful (Wadhwa & Aggarwal, 2009). List of references Logue,L.2010 Emerging Markets For Dummies. New York: For Dummies. Gow,D. 2007"Microsoft gives up three-year battle to keep Windows closed to rivals." The Guardian: np. Gossling, T.2011 Corporate Social Responsibility and Business Performance: Theories and Evidence about Organizational Responsibility.New York: Edward Edgar Publishing Limited. Eisenach, J,& Lenard,T.2000 "The Microsoft Monopoly:The Facts,the Law and the Remedy." The Progress and Freedom Foundation : np. Sparke, M.2012 Introducing Globalization: Ties, Tensions, and Uneven Integration. New York: John Wiley & Sons Ltd. Wadhwa,V & Aggarwal,R. 2009 "The Anatomy of an Entrepreneur:Making of a Successful Entrepreneur." Kauffman: pg1-24. Read More