Looking at Globalization from Every Angle - Essay Example

Globalization Introduction This essay will broadly look at globalization from every angle. The essay will begin by analyzing why it is necessary inthis day and age for countries and organizations to think of globalization, to prepare for globalization and why globalization as we know it today is inevitable and we cannot change the tides of time. Then the essay will evaluate the broad short and long term benefits of globalization and also looks at the flip side of the coin, which are the short and long term drawbacks of globalization. This section also looks at how these drawbacks can be avoided by countries and organizations. Next the essay looks at the external forces that have to be encountered by organizations that are preparing to go global or are already global. In the next section the essay then investigates why some organizations choose to stay local or regional while others decide to go global and how the local and regionally focused organizations survive in this day and age. The impact of the internet and other technological innovations on globalization are closely evaluated in the next section. The essay then goes further and looks at the broad gains and losses that have been made from globalization in the last decade or so. Next the essay goes on to look at the main reasons behind international expansion being key to the growth and survival needs of today's multi-national companies. Last but not least the author gives his personal opinion on globalization and concludes by summarizing the main points covered in this essay. Inevitability of Globalization With the advancement of technology and increased pressures on the natural resources and expansion of the business operations globalization has become inevitable in the last decade or so. No country that practices capitalism nor has an open economy have been spared by the effects of globalization - whether the country was ready for it or not globalization has been imposed on all countries and economies - save for those few countries like North Korea. Even China and the countries of the former Soviet Union with their socialist ideals and leanings have been affected by globalization and are today major players in the international arena. Today globalization has become a way of life for most of us and the business world of a few decades ago has drastically changed and become borderless and hardly recognizable. Globalization we can is inevitable in this day and age. Now that it has taken place there is no turning back and no country that has been touched by globalization can reverse the process and survive and prosper. This is because today economies are more complex and complicated than ever and technology has shrunk the world to such an extent that all countries and economies are interdependent and cannot survive individually (Kustin, 1993, pp. 4-8). Long Term Befits of Globalization The benefits of globalization are many and while there are many short term benefits of globalization likewise we can also name many long term benefits of it. Some of the short term benefits of globalization have been the lower cost of goods and services that have been achieved by the use of comparative advantage and also economies of scale. For instance having goods produced in China has lowered the prices of many goods that are currently sold in the United States. Big retailers like Wal-Mart contract manufacturers in China to produce for them due to the cheap labor that is available that will give them a price advantage, which they will not be able to gain if the goods were produced elsewhere - where labor was more expensive. Likewise globalization has helped increase service levels like has been done in the health care industry in North America. The issues related to the acute dearth of radiologists in North America has been addressed by radiologists in India, based in India being hired to fill the vacancies, however unlike in the past they are not physically present North America but carry out their duties virtually with the help of modern day technology. Drawbacks of Globalization The flip side of globalization is that as much as it has benefits it also has many drawbacks. Lower prices in goods and borderless business are all very good things however globalization has also been the root cause of many other issues like the wastage of resources, plundering of resources like the natural resources of some African countries, exploitation of certain segments of society and even poorer nations. Further globalization has also caused immense wealth for some and immense poverty for others thus causing greater disparity in the sharing of wealth throughout the world (Abeles, 2001, pp. 2-4). For example Wal-Mart contracting Chinese manufacturers to produce goods for them, which were previously produced in the United States has caused large numbers of employees in the United States to be unemployed. While the cheaper labor costs in China, may enable Wal-Mart to sell lower priced products it still takes away from the US economy and causes job losses and unemployment. Further in China due to the great demand for cheap labor, a majority of the Chinese employees are exploited and forced to work in appalling conditions to ensure that costs are kept down and the manufacturers can compete for business with big retailers like Wal-Mart. Therefore it can be said that while there maybe many benefits of globalization. The drawbacks can have devastating effects and should be managed adequately if we are to all reap the benefits that can be gained by globalization (Zekos, 2004, pp. 631-647). External Forces encountered by International Companies When international companies have to decide where to expand their business to and which markets and countries to enter there are many different aspects that they need to look at. Likewise there are many different external environmental forces that have to be encountered by these organizations, which are all part and parcel of globalization. Since we have looked at the benefits and drawbacks of globalization we will now look at some of these external forces that organizations will encounter in their endeavors to carry out business globally (Tyebjee, 1993, pp. 58-64). Even though the business world has become borderless - some of the major issues that have to be taken into consideration today when an organization goes global or decides to enter a new country is the political and legislative frame work in the country. This is because, the manner in which, business will be conducted in the country is largely based on these aspects. Next the socio-cultural climate in the country has to be taken into consideration as the demand for the goods and services of the said organization depend largely on the socio-cultural norms prevalent in the said country that the organization is wishing to enter into. Reason some organizations are global while others are not While going global has been the norm in the last decade or so, not all companies and organizations have gone global. Most people consider it strange that some organizations choose to focus solely on local and regional markets instead of reaping the benefits of going global and expanding their client base and the demand for their goods and service. One of the major reasons that some organizations choose to remain local is because they don't have the expertise and know how to enter foreign markets or to cater to the varying needs of the customers outside of their current sphere. Another reason many companies chose to remain local or not expand their regional operations is because they serve a very niche market that is only prevalent in the region that they are operating in and the goods and services that are provided by the organization have no demand outside of the region that they are operating in. Impact of Internet on Globalization One of the biggest drivers of globalization as we know is the Internet. We all know that with the onset of the information age the world has become a smaller place and the businesses have found very sophisticated and complicated ways to operate in. Likewise businesses have found markets and resources that were never available to them before. Today a home business owner based in Japan is able to sell her products to someone in Europe thanks to the Internet. Tutors in India are able to coach students in the United States. A seller in Argentina is able to sell his products on the Internet to an individual in Alaska. A student in China is able to follow a degree program that is conducted by an online university based in the United States. All of this is possible only for one reason and that is the availability of Internet. Two decades ago such scenarios were unimaginable. However today we can't imagine anything different and can hardly remember a time when we didn't have the Internet or how we managed to live before the onset of the Internet. The basic premise of globalization is that we have no boundaries and products and services produced in one part of the world is available to anyone who wants it in any other part of the world. And today unlike at any other time years ago this is possible only because of the Internet. Therefore it can be said that the Internet has had a huge impact on the onset of globalization. Even without the Internet globalization would have taken hold of the business world - however the onset of the information age and the Internet has helped it grow by leaps and bounds that would not have been possible without the Internet. Gains and losses from Globalization As stated previously there have been many benefits of globalization both long and short term and likewise there have been many drawbacks of globalization too. Like long term and short term benefits the drawbacks too can be categorized as long or short term. In this section we will look closely at the gains and losses that have been caused by globalization. We will first look at the losses that have been caused by globalization and then move on to look at the gains that have been made. With the onset of globalization the world has become a smaller place and individuals today are more mobile than they were at any time in the history of mankind. This is because of the growth of economic regions like the European Union and the expansion in businesses and the increased demand for knowledge workers. While this is all good the flip side of this is that lots of developing countries have experienced immense brain drain because of professional individuals in poorer and backward countries find it easier to move for economic reasons thus causing a huge brain drain in these lesser developed countries. Globalization has caused a lot of multi-culturalism around the world that is one of the biggest gains that has been made by it. This is again because of the mobility of individuals, previously homogeneous populations are more diverse and have gained immensely through such diversity - not only from a cultural perspective but from an economic perspective as well. Again we can say that while there have been losses that have been made by globalization likewise there have been much gains that have been made as well. International growth key to expansion of Multi national Companies Multi national companies are exactly what their name says about them. They are Multi national and operate in many different countries or in many countries in a chosen region like the European Union region. Today, more than ever before international growth is key to the expansion of multi national companies. This is because previously local and regional only companies have moved to become global companies. And that has caused the multi national companies to lose their market share to these smaller companies that were operating only locally or regionally. Therefore it has to be said that if multi national companies decided to take a laid back attitude and not expand aggressively they will stand to lose their edge and will not be able to survive or grow in today's business environment (Brinkman and Brinkman, 2002, pp. 730-752). Personal thoughts about Globalization Looking at everything that has been said and evaluated above it is the author's opinion that globalization is essential. However there are many losses that have been made due to globalization. Therefore it is the opinion of the author that while globalization is a necessary evil, with the proper management the losses that have been caused by globalization can be reduced and the gains made increased. In order to do so it is essential for everyone involved to understand that the gains can be made without exploitation of people and resources if the correct guidelines, controls and monitoring mechanisms are put in place (Geyer, 2003, pp. 1235-1252). Conclusion In conclusion it can be said that globalization today is inevitable and no country nor economy that has been touched by globalization can turn back the clock and survive without globalization because all economies and countries are interdependent on each other for their survival and globalization is the thread that keeps them all connected. There have been many short and long term benefits of globalization such as lower priced goods being manufactured and individuals having access to products and services that they never had before. Likewise though, there have been many long and short term drawbacks due to globalization. Some of these drawbacks have been exploitation of workers, plundering of resources and greater disparity in the distribution of wealth. Some of the greatest gains that have been made with the onset of the globalization are the diversity of societies and work forces in most of the developed countries. However the downside of that fact is that, it has caused a huge brain drain from developing countries to the more developed world. From everything that has been said above it is also very clear that the Internet has been the biggest driver of globalization as it has increased the speed of globalization. While globalization may seem to be the biggest buzz word around today not all organizations have gone global or want to go global. This is because they either don't have the expertise, knowledge and resources necessary to do so and in most cases because they serve very niche markets and their goods and services don't have global demand only local or regional demand. Further when an organization decides to go global they have to consider the political, legal, socio-cultural and economic framework in the country that they hope to enter. However multi national companies should remember that since there are more companies than ever before, that are now operating in the global arena it is essential for multi national organizations to continue to be aggressive in their endeavors to expand internationally if they are to protect their market share. Last but not least it is the opinion of the author that while globalization may have an ugly side to it. It doesn't need to be so if the different stakeholders will take necessary steps to minimize the damage and maximize the benefits of it. References Abeles, T. P. (2001) "The Impact of Globalization," On the Horizon, vol: 9, iss: 2, pp. 2-4 Brinkman, R. L. and Brinkman, J. E. (2002) "Corporate power and the globalization process," International Journal of Social Economics, vol: 29, iss: 9, pp. 730-752 Geyer, F. (2003) "Globalization and sustainability: the cynics, the romantics and the realists," Kybernetes, vol: 32, iss: 9/10, pp. 1235-1252 Kustin, R. (1993) "A Philosophy for Globalization," Marketing Intelligence & Planning, vol: 11, iss: 2, pp. 4-8 Tyebjee, T. (1993) "Globalization Challenges Facing Fast-growth Companies," Journal of Business & Industrial Marketing, vol: 8, iss: 2, pp. 58-64 Zekos, G. I. (2004) "Ethics versus corruption in globalization," Journal of Management Development, vol: 23, iss: 7, pp. 631-647 Read More