Globalization and Its Main Characteristics - Essay Example

Globalization and its main characteristics Introduction Some people argue that globalization is a blessing whereas others argue that it is a curse. In any case, one thing is sure that globalization is one of the most popular topics in this world at present. Nobody, even economists, sociologists or politicians have unique opinion about the definition of globalization. Since globalization has too many dimensions including, economical, political, cultural etc, it is difficult to define it accurately. Globalization and globalism are two different things even though some people by mistake use both of these two terms as one thing. Reich (1998) defined globalization as “a process through which events, decisions and activities in one part of the world can come to have a significant consequence for individuals and communities in quite distant parts of the globe (Reich, 1998, p.5). It is the process through which economies, societies, and cultures are exchanging their resources for mutual benefits. Moreover it is the process which integrate global network of political, technological, economical and cultural ideas through communication, transportation, and trade. In short, globalization is an effort to bring all the people in this world under one umbrella. This paper analyses the different characteristics of globalization. Characteristics of globalization Globalization succeeded in bringing many social, political and economical changes in the world. It is intended for decreasing the gap between; rich and poor, different religious beliefs, different political and social ideologies etc. Poor countries may have many resources, but they may not have the infrastructure or technological expertise to exploit it. Globalization can help such poor countries to mobilize their resources more effectively with the cooperation from rich countries. For example, it is quite possible that oil resources are available in many of the poor countries. However these countries may not have the technological expertise or financial abilities to explore oil in their coastal regions. Rich countries can help such poor countries in exploring oil resources in their territory as a result of globalization. Thus, both the countries will be benefitted from their mutual cooperation. It is illogical for a poor country to keep their valuable natural resources untouched while striving for progress. According to Lauder et al (2006), many people tempted to think globalization as the “process of transportation of jobs, ethnic and cultural composition of nations etc from one country to another” (Lauder et al, 2006, p.32). The above assumption is true up to certain extent. Outsourcing and offshoring like business terms entered this world because of globalization. Cross cultural or international business is growing day by day because of globalization. All the countries have opened their economies more in order to attract foreign direct investments. According to Dharam Ghai (1997), free market and private enterprise were the principal mechanisms for promoting economic activities in the sphere of economic globalization (Ghai 1997, p.1). Before globalization, many countries thought that foreign companies may exploit their resources and hence entries to such companies were restricted. But now most of the countries are thinking deeply to formulate strategies to attract foreign companies and foreign direct investments. They have realized that it is impossible for a country to develop properly with the help of domestic resources alone. Globalization made the countries aware of the fact that it is impossible for them to progress properly without foreign capital. Free markets and Special Economic Zones (SEZ) were thus came into exist in order to attract foreign direct investments. The changes brought by globalization in the internationalization of business can be well understood with the help of China as an example. It was impossible for the foreign companies to operate in China before globalization. The communist China watched the efforts of international companies in establishing their business units in Chinese territory with a suspicious eye. However, globalization succeeded in removing such concerns. Today is China is the number one exploiter of globalization and they have opened their economies more widely to FDI. Holst (2007) has mentioned that economic interpretations of globalization centered around three forms of capital; financial, productive and commercial (Holst, 2007). In fact globalization has succeeded in achieving more economic balances between regions. Earlier, the global wealth was accumulated heavily in the less populated American and European regions. Today, the most populated Asian countries like China and India are progressing rapidly as a result of globalization. BRIC (Brazil, Russia, India, China) countries are believed to be the rapidly developing countries at present. Mexico is another example to learn more about how well a country can exploit the opportunities provided by globalization for economic growth Mexico was a very weak exporter at the beginning of the 1980s. At the present time, Mexico has become the eighth exporting country in the world and the first in Latin America. Exports have grown steadily; in 1981 there were a mere 6.5%, in 1990 they were already 27%, in 1996 they were an impressive 66%. Manufactured goods represented 33.8% and in 1993, they already represented 71.9% in 1993. Productivity has increased very significantly since the opening of the Mexican economy, while at the beginning of the eighties it was decreasing at a rate of 0.7% and 0.8%, in 1982 and 1983 respectively, in 1987, 88, 89 it started growing at rates of 2.5, 3.2 and 4.1%, and at the end of the nineties it was reaching rates of 9.0, 2.7, 8.7% in 1994, 1995 and 1997 respectively (Bizberg, p.16-17) According to Robinson (2003), one of the distinctive features of globalization is the rise of transnational capital (Robinson, 2003, p.12). Many of the organizations in America and Britain like countries were experiencing saturation in their countries before globalization. For example, Starbucks was facing severe problems in America as far as expansion was concerned. In almost every corner, Starbucks had coffee shops. Globalization helped Starbucks to explore their expansion possibilities outside United Sates. Coke and PepsiCo like American companies also had similar problems before globalization. Globalization helped all these companies to expand their wings beyond the American territories. On the other hand, China and India like developing countries were waiting for opportunities and they welcomed the international companies wholeheartedly. Perrons (2004) has argued that because of globalization, people and place are increasingly interlinked through the organization of work, the flow of goods and services and the exchange of ideas (Perrons, 2004, p.1). The exchange of workforce is smoother at present between countries. It is possible for Indians or Pakistanis to get work permits in America or UK easily. Most of the global organizations have diverse workforce at present. It is difficult for Microsoft or PepsiCo to recruit only Americans in their units in India or in China. These companies are keeping a diverse workforce in their units including the locals and the foreigners. America and Britain like capitalist countries are facing severe skilled manpower shortages at present. On the other hand, India and China like countries have immense skilled manpower, but they are facing shortage of opportunities. Providing employment opportunities to Indians and Chinese in America or Britain will be mutually beneficial. Outsourcing is another business term entered the world as a result of globalization. It is the process of getting the work done in another country. As mentioned earlier, Americans and Europeans are facing severe manpower shortages in clerical, administrative and IT sectors. They can get their work done from India or China because of the developments in communication technologies and internet. The labor markets in India or China are cheaper compared to that in America or Europe. A task worth $5000 in America can be completed in India for around $ 3000. Thus outsourcing helps the organizations to save huge money which was made possible by Globalization. So far we have discussed the positive changes brought in this world by globalization. However, there are some drawbacks also. The underdeveloped countries failed to progress properly even though globalization opportunities are there. Some people argue that globalization is a concept which was intended for looting the resources of the poor countries. They are substantiating their arguments with the help of examples of poor developments in some African countries. However, it is difficult for a country to develop with the help of globalization alone. Visionary administration and political stability are necessary for the exploitation of globalization. Most of the African countries do not have these things and they failed to exploit globalization properly. According to Dreher (2003), those countries with the lowest growth rates are those who did not globalize. Countries like Rwanda or Zimbabwe insulated themselves from the world economy. They have poor institutions which repress growth and promote poverty (Dreher, 2003, p.15). Globalization succeeded in rewriting some of the established economic principles. Earlier many of the prominent economists argued that huge population is the major reasons for the underdevelopment in countries like India and China. However, today the same economists argue that India and China developed a lot because of their immense manpower. At the same time lowly populated countries like America and Europe are currently struggling. Conclusions Globalization is a revolutionary concept which brought many economical, cultural and political changes in the world. It helped countries to increase their mutual cooperation. It promoted the slogan of global culture. It helped some of the heavily populated countries to exploit their manpower resources for their economic progress. It also helped the shifting of global wealth from less populated areas to heavily populated areas. References 1. Bizberg, I. Globalization and Democracy in Mexico. [Online], Available at: http://docs.google.com/viewer?a=v&q=cache:s6ZTjAwvMK0J:www.colmex.mx/centros/cei/Paginas%2520profesores/Articulos/Bizberg/Globalization%2520and%2520Democracy%2520in%2520Mexic1.doc+Globalization+and+Democracy+in+Mexico&hl=en&gl=in&pid=bl&srcid=ADGEEShzJ-r3z7VDSMq9M2hQp4Juz2nac5UGIwNutFus4zXuyWBXUqhLAgZ-EeAWgQ6p5tLZ9jl7HLRwRsrHc6jKH2of_ZIdVh7voLsYACXUSNjEOmMvUjCn8iZK6p-Sa1LLWjxbJmtl&sig=AHIEtbQF9vnLEyPg-e8DPBPB60-C0Hp2mQ [Accessed on 4 March 2011] 2. Lauder, Hugh B., Phillip, D., JoA. & Halsey A. H. (2006). Education, Globalization and Social Change. Publisher: Oxford University Press, USA (September 7, 2006) 3. Reich S. (1998). What is Globalization?. [Online], Available at: http://nd.edu/~kellogg/publications/workingpapers/WPS/261.pdf [Accessed on 4 March 2011] 4. Robinson, W. I. (2003). Transnational Conflicts. Publisher: Verso, Meard Street. London Read More