Impact of Globalisation on India and the United States - Essay Example

? Discussion of the positive and negative impacts of globalisation in India and the United s BY YOU YOUR SCHOOL INFO HERE HERE Discussion of the positive and negative impact of globalisation in India and the United States Introduction Globalisation is best defined as: “a set of economic, social, technological, political and cultural structures and processes arising from the changing character of the production, consumption and trade of goods and assets that comprise the base of the international political economy” (unesco.org, 2011, p.1). The impact of globalisation within different nations varies depending on their gross domestic product, level of industrialisation and their focus on building more skilled talent, infrastructure improvements, along with many other internal and external scenarios (Bamber, Lansbury & Wailes, 2007). This essay identifies the positive and negative impacts of globalisation as they pertain to India and the United States. India India is considered a developing economy that has recently experienced explosive gains in relation to skilled labour provision and development along with a boastful technological prowess (samachartoday.com, 2011). Much of this positive growth in technological know-how seems to stems from market opportunities that provide the country with increased foreign direct investment as it has been identified as a need to sustain growth in India (business.rediff.com, 2010). According to Yusuf, Altaf & Nabeshima (2004), foreign firms have been looking for new market potential in this developing nation and have been willing to invest considerable capital into assisting the country in further technological developments. These interested firms in areas of sales and marketing and finance have assisted in raising capital for domestic Indian firms and provided considerable labour-related expertise in multiple industries (Yusuf, et al). Globalisation is the catalyst for these improvements as foreign firms look for developing marketplaces to distribute their products. Higher demand in global automotive consumption has also improved the infrastructure of Indian business, thus giving the country more opportunities to improve their own transportation network. Since many of these demanding consumers hail from geographically-close regions, such as China, India now has opportunities to expand their port system to improve the delivery efficiency and supply chain capabilities for automotive companies and related industries. India, in order to meet this demand and earn higher profit through the transportation system, has created a dedicated port terminal that increases the speed by which automotive products are off-loaded, thus making India an ideal location for supply chain-related distribution (portstrategy.com, 2008). Globalisation in relation to global consumer sales has given India considerable advantages and better relationships with automotive manufacturers worldwide. Meanwhile, India has improved its educational infrastructure as well, thus providing its labour pool with more talent as it is related to technology and software development (Commander, Chanda, Kangasniemi & Winters, 2008). Much of these improvements were built on the foundation of American and European outsourcing efforts in relation to call centre development that evolved over time (Warne, 2011). As the government witnessed better increases in job opportunities, thus creating more disposable consumer income, more funds from political forces have been invested into improving educational capacity within the country. However, despite all of these improvements, India has some drawbacks in relation to the impact of globalisation. The foreign funds flooding the country from interested direct investors has made the government somewhat lax in identifying new opportunities and remained dedicated to capital gains. What this has created is a drop in stock value for companies not related to finance and capital growth, thus weakening the financial position of certain industries (Merchant, 2006). India is not well-diversified even though globalisation has provided considerable foreign direct investment in technology and industrial development. Additionally, this lack of focus on other industries other than finance has provided limited mobile phone services as cellular networks are not well-developed or funded in this country. In fact, there are only 100 million phones for its one billion population ratio, thus not enough volume to meet consumer demand (Kanellos, 2005). Again, this is a lack of focus as the government focused too strongly on foreign direct investment in capital growth and financial markets. The United States Globalisation has created many opportunities in the U.S., including a powerful dedication to improving the human resources functions within businesses. “Globalisation exerts pressure on the HR function to adapt to changing organisational needs and add greater value” (Friedman, 2007, p.158). Over time, businesses that operate and distribute products globally have been forced to meet employee demands related to motivation, cultural sensitivity, innovation and changing employment practices (Friedman). As business evolved and growth was experienced in the U.S. financial and business-related, more competition for recruitment at the employee level has given them more control over their job role functions, thus requiring new human resources practices and processes. It has also lead to decentralisation of business that gives employees more job role autonomy and decision-making authority (Carpenter, Bauer & Erdogan, 2010). This focus creates better human capital development, however it limits the scope of control regarding employee relations for the business. Growth in the availability of wireless and Internet networks in the U.S. as a means to reach broader global markets is yet another example of positive gains attributed to globalisation. “The nature of today’s marketplace demands that firms interact with customers and business partners using technology to instantaneously service across international borders” (Aziz & Yasin, 2004, p.3). Internet marketing and customer relationship management has been enhanced through globalisation. There are downsides, however, experienced in the U.S. First, the United States government continues to impose tariffs on many steel products imported from foreign nations to avoid their market being flooded with lower-cost, foreign-produced products (Blecker, 2002). This creates less competitive edge for domestic companies when high tariffs cause foreign manufacturers to seek out less costly market potentials elsewhere. Secondly, the U.S. is being outperformed in retail by companies like Zara, a major international clothing retailer, who has built a better supply chain network outside of the U.S. Zara has managed to develop a twice weekly replenishment system that outperforms the U.S. retail system (Gentry, 2007). Globalisation and higher demand in Asian clothing retail provides better distribution opportunities than those currently existing in America, a benchmark recognised by firms such as Zara that have expanded into Asia and abroad, thus potentially losing their own retail business competitive edge (boozallen.com, 2010). Further, the U.S. now supports many foreign expatriate workers who require health-care benefits and other workforce perks as part of their working contracts (Hain-Cole, 2009). This has raised health care costs for many industries that removes some of their profitability and often leads to early buyouts or temporary layoffs until higher profit objectives are met. Further, lack of competitive cost structures in health care provided by more developed and innovative foreign health care systems, as a product of globalisation, causes profit and competitive edge problems with U.S. health care companies and providers. Summary of findings Both the U.S. and India have many benefits related to globalisation and, it seems, just as many drawbacks that evolve over time. Both countries have had a short-term thinking methodology related to global initiatives that have created short-sighted problems with business profitability and growth. The immediate gains incurred from globalisation efforts, such as foreign direct investment and better internal political structures guiding business, provided rewards that did not remain sustained over the long-term. It has created new problems with diversification and maintaining control over the employment relationship as the two most fundamental problems of globalisation. References Aziz, N. & Yasin, N. (2004). The influence of market orientation on marketing competency and the effect of Internet-marketing integration, Asia Pacific Journal of Marketing and Logistics. 16(2), p.3. Bamber, G., Lansbury, R. & Wailes, N. (2007). International and comparative employment relations: Globalisation and the developed market economies. 4th ed. Southwind Production, p.23. Blecker, R. (2002). [internet] Let it fall: the effects of the overvalued dollar on U.S. manufacturing and the steel industry, American University, p.27. [accessed 9.3.2011 from http://www.1.american.edu/cas/econ/faculty/blecker/dollarpaper.pdf] Business.rediff.com. (2010). [internet] India wants more foreign capital: PM. [accessed 3.11.2011 at http://business.rediff.com/report/2010/sep/13/india-wants-more-foreign-capital-pm.htm] Boozallen.com. (2010). [internet] Merchandise strategies to improve apparel margins [accessed 10.3.2011 at http://www.boozallen.com/media/file/Off_the_Discount_Rack.pdf] Carpenter, M., Bauer, T. & Erdogan, B. (2010). Principles of management. [accessed 10.3.2011 from http://www.flatworldknowledge.com/pub/1.0/principles-management/29065] Commander, S., Chanda, R., Kangasniemi, M. & Winters, L. (2008). The consequences of globalisation: India’s software industry and cross-border labour mobility, The World Economy. 31(2), p.187. Friedman, B.A. (2007). Globalization implications for human resource management roles, Employee Responsibilities and Rights Journal. 19(3), pp.157-174. Gentry, C.R. (2007). European fashion stores edge past U.S. counterparts, Chain Store Age. 83(12), p.100. Hain-Cole, A. (2009). Employers choosing to reform their benefit programmes from within: USA, Benefits & Compensation International. 39(2), p.30. Kanellos, M. (2005). [internet] India’s tech renaissance: move over, China – A new powerhouse is emerging. [accessed 10.3.2011 from http://news.cnet.com/Indias-renaissance-Move-over%2C-China/2009-1041_3-5751994.html?] Portstrategy.com. (2008). [internet] The ro-ro run. [accessed 10.3.2011 from http://www.portstrategy.com/features101/area-survey/asia/south-asia/roro_terminals_spread_across_India] Merchant, K. (2006). Collapse underscores downside of integration markets: In the past month, India’s relationship with the outside world sent shares into a tailspin, Financial Times, London. Jun 28, p.2. Samachartoday.com. (2011). [internet] India’s technological prowess put on display at Pride of India Expo. [http://www.samachartoday.com/india%E2%80%99s-technological-prowess-put-on-display-at-pride-of-india-expo/14579] Unesco.org. (2011). [internet] Globalisation, United Nations Educational, Scientific and Cultural Organization. [accessed 3.8.2011 at http://www.unesco.org/most/globalisation/Introduction.htm] Warne, M. (2011). [internet] Call centre India: Advantages of outsourcing in India. [accessed 10.3.2011 at http://www.ideamarketers.com/?articleid=1316508] Yusuf, S., Altaf, A. & Nabeshima, K. (2004). Global Change and East Asian Policy Initiatives, World Bank Publications, p.386 Bibliography Dahlen, M. & Lange, F. (2006). A disaster is contagious: how a brand in crisis affects other brands, Journal of Advertising Research. 46(4), p.388. Haribhakti, S. (2008). Financial accounting standards: convergence of Indian standards with the global standards, International Journal of Disclosure and Governance. 5(3), pp.272-284. Schulaka, C. (2009). Marketing to consumers: effectively reaching high net worth women, Journal of Financial Planning. 22(9), p.S6. Read More