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2012
Globalization-Good or Bad
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Table of Contents

1. Introduction to Globalization................................................................................................... 3

2. Theoretical Perspectives of Globalization ............................................................................... 3

3. Drivers of globalization ........................................................................................................... 4

4. Implications in International Business .................................................................................... 6

5. Benefits and challenges of globalization to the international society ..................................... 7

6. Conclusion ............................................................................................................................. 10

References ..................................................................................................................................... 11
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1. Introduction to Globalization

Globalization is a different concept and its meaning can be implicit through different conditions

or trends. This paper includes the many reasons of globalization and the necessary discussion on

the foreign trade and its growth. In simple terms, globalization is good as it makes countries

dependent for the benefits and growth of national and international markets.This dependency of

countries make them competent and every country try and produce quality content in order to

boast their economy, this will increase the mutual dependency of countries on each other which

will lead to the boast of international market and hence opening job opportunities in the

countries, not just that, but the finance of the country would get an immense boast due to the

revolutionize modification in international market. This paper addressed the main issues related

with the concept that globalization is good or bad in international business, its implications and

challenges in international society.

2. Theoretical Perspectives of Globalization

The concept of globalization is widespread; one can get better understanding of this concept with

the example of Mann's (2001), globalization is an ongoing process in the overall world.

According to Held and McGrew's (2002), globalization help making good relations with other

countries and it is a broad term, and one needs to understand its core idea before stepping into it.
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Globalization help making good and lasting relations with other countries and give boast to the

international foreign trade and hence boasting the economy.

According to Schirato and Webb (2003) globalization is not just a simple term but it has affected

every one's lives, the concept of globalization is not just related to exchange of products but it

works in different forms like, placement, wordings, ideas, execution. Globalization is considered

as an authentic yardstick to measure and evaluate the positives and negatives of an individual.

According to many researchers and authors, globalization gives benefits in monetary terms only.

Kuper and Kuper, (1996) in their book, ‘The Social Sciences Encyclopedia’ asserted that

globalization gives strength to the economy and benefits the economy in monetary terms. World

economy and growth has a phenomenal history which has started from sixteenthh century.

Globalization is a complex concept to understand and it has relative advantages to country's

economy. Langhorne (2001: 2) is of the view that globalization is highly linked with the

technological developments going on in the world, technological development has provided an

immense opportunity to the people world wide to launch their creativity in terms of business

without any obstacles of government and other rules and regulations, lack of government

obstacles has made the process of globalization easy and convenient and countries these days, try

to go global and boast the economic growth rate in their country which will prove to be

beneficial for the government and the people of that country.

3. Drivers of globalization

The major drivers of globalization for international companies are cost, market, governments,

and competition. These international companies or MNCs drive process of globalization to

achieve maximum reach and sales of their products in every corner of the world. The political
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scenarios and consumer behavior are basic factors that impact the progress of these global

operations. According to Levitt (1983), success of international marketing strategies and

acceptance of local population drives the global operations of these MNCs.

The market drivers for globalization are included convergence of per capita income and

consumers life styles of industrialized countries. Increased travel and fast telecommunication

have created global markets of mobile consumers. In these global markets, promotions and

consumer behavior is treated as of global nature. On the other hand, the cost drivers of

globalization comprised of economies of scale, technological innovation, telecommunication

channels integration, fast transportation, and increase in production and consumption capabilities

of industrialized societies. Furthermore, governments also play an important role in driving

globalization by reducing trade barriers, trade blocs’ creation, supporting privatization, and

allowing the operation of deregulated economies. The examples are the supportive role of

Chinese and Indian government in recent years in attracting multinationals operations in their

countries. According to Gilpin (2009), the final globalization driver is taken as the competition in

the markets. The increase in world trade volume every year has increased the wealth and market

coverage of corporations and an increasing trend of more global competitors’ entry in foreign

markets are observed. Competition increased as more companies become global centered and

increasing make strategic alliances around the world.

The last driver of globalization is termed as global consumers and changes in their lifestyles. The

consumers are sovereign in deciding about the acceptance of global brands. The success of

brands like Coca Cola, McDonald, and Pepsi has proved that the actual drivers behind the

process of globalization are people. These people can be the citizens of state, decision makers of

governments, makers of global products, or critics of media.

4. Implications in International Business

corporations to adopt the positive elements of success in a worldwide market and in global

business. The second matter of concern about different organizations from the government point

of view is, the organizations might go towards the beneficial areas which are least expensive and

highly economical, totally going in the favor of organizations. However, one should not forget

that it would increase the rate of employment and hence will increase the productivity. The term

off shoring is related to the business concern where, organizations tend to find economical ways

to produce the products. For instance, it can be explained by saying that an industry is moving

from developed country to a non developed country (Dollar 2004).

Likewise, we can have another example of USA call centre conducting its task from India or

from USA to some other under developed country. This would remain a fact that due to the

transmission of the business centre there would increase the rate of unemployment in the country

from where the business is getting transferred, and would create new job opportunities in the

country where the business is being transferred at a low cost (Bremmer 2010).

Also, globalization may lead the countries to the lower social standards in order to meet the

completion internationally. The badly affected lower class citizens in developing countries can

face lack of necessary facilities due to resource mobilization to developed countries, non uniform

income distribution and jobs insecurity in these countries. International business scenarios are

affected by the change in wage rates in developing countries like that of China and Far East

countries that had attracted world leading companies for productions. Also, exploitation of

employees including children, tariff rates, lower taxes benefits, and evasion of environmental

safety in underdeveloped countries created opportunities for international business organizations

in their global operations (Dreher 2006).

Globalization as also lead to exploitation of workers, especially children, and globalization has

increased human trafficking. Companies that set up industries in other countries cause pollution

and usually do not adhere to following basic rights for their employees since there are typically

no or few regulations for employer conduct.

5. Benefits and challenges of globalization to the international society

Usually the terms economic development and globalization are used in place of each other and

both the things are considered important and good to attain, but nothing is positive or negative

without the prior and additional qualifications. Let’s say, economic growth at the stable pace is

considered fine for a country and same is considered good for non equitable growth. Different

researches and the researchers are of the view that the growth rate is not always homogenous

throughout the country, they are of the view that not all the production in a country would show

an increasing trend; hence economic development takes place in a certain segments of a country.

Usually, every growth proves to be good and favorable for the country but at times an uneven

growth rate will create negative vibes and feelings between the people of the country and hence

will create a big gap between rich and poor due to income inequality. It is said that if the

development of economy takes place at the cultural or racial level, then there is a high potential

of danger and conflicts among the different ethnicities, even the business of buying and selling

would get affected (Martin et al., 2008). This study focuses on the impact and analysis of

globalization.

Researchers are also of the view that economic growth and globalization are not the same things;

in fact, globalization can be described as an increase in growth rate hence increasing the well

being of a nation. Economic growth rate can be measured with GDP per capita. This measures
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the yearly market value of the entire finished goods and services being produced and formed in a

country. GDF of a country clearly states that increase in exports will be favorable for a country

and hence will increase the GDP rate of a country.

One of the difficult tasks for the politicians of the recent times is that they have to manage the

policies, integration of globalization with national interests, goals, priorities and politics.

Globalization has also become a serious concern for the residents of the country who are stuck in

between the imported products and services, their concerns and worries about the job, the rules

and regulations associated with the trade between various borders. The concerns are widespread

and a matter of worry for every society. There are various benefits of globalization. The

development in the technical area has increased the pace of globalization through the internet,

mobile phones, fiber optics along with the improvement in transportation and infra structure.

Increasing awareness of people, trade, education system and the personal interest of people has

made uprising change in the economic growth and in the rate of poverty of a country.

One negative aspect associated with globalization is, increase of inequality within the country,

another negative aspect is the increase in global shocks and the vulnerability associated with

globalization. There are various risks associated with the inter dependencies on a large scale,

there are not just the financial risks but systematic risks like change in climate and weather,

scarcity of resources, vulnerability in supply chain and insecurity of food and water. These

vulnerabilities are a big matter of concern because they are challenging the benefits being

produced by globalization, it is proved to be one of the biggest challenges to politicians and the

governments, leaders and the institutions related to globalization. There should be a proper

balance to reduce the failure associated with globalization else it would come up with many
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negative results (Steger 2010).

The crises of globalization require extra ordinary thinking process by the global leaders along

with the complete society. The negative issues related to globalization should get resolved or else

it would severely challenge economic growth, poverty and global interdependence. There are

numerous benefits which can outweigh the risks related to the integration of businesses by

different countries. There should be improvement in the risks mechanisms associated with

globalization in order to improve co operation between the countries (Yip 2003).

The negative aspect is that the new gesture of globalization came up with new and many

systematic risks and the positive aspect is that globalization has also come up with the different

means to tackle the downsides, that is, a country can increase different opportunities of wealth

along with increase in technical knowledge. There should be cooperative contribution in order to

come up with the solutions of the problems which are being faced by different countries in the

21st century. To avail these opportunities, one needs the intellectual mindset. A country needs

people, its citizens, a leader and a proper institution. There should also be good politicians,

leaders and policy makers to cope with the different negativity associated with the concept

globalization. In order to get the success, one needs to manage the entire crisis related to

globalization step by step because if a person ignores the bigger crisis associated with

globalization, the end result would not be safe (Steger and Roy 2010).
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5. Conclusion

In conclusion, Globalization is a central point of this study, however, despite the fact that this

term is a well known concept but there are dimensions which are not properly understood. In the

recent times, the term globalization has come up with complex meanings and definitions than

ever before. Although, the policies related to globalization and facilitating integration has been

made but its implications has been ignored drastically. Speeding up the process of Global

integration has come up with numerous benefits however it has also come up with many

problems like susceptibility of financial crisis and global shocks.

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