It was predicted more than 20 years ago that globalization would transform economic growth in both wealthy and developing nations. The effects of this are still being felt today, thus the previous statement is correct to some extent. This is because the majority of nations are currently seeing economic growth as a result of globalization. Therefore, it is crucial to recognize how advantageous globalization has been and will remain in the future. The benefits of globalization vary from one country to the other in that in as much as there are standard advantages that they all enjoy; there are some that particularly matter to specific economic growth and development of organizations.
The improvement of the global economy as a macroeconomic condition is one of the most important benefits of globalization. Collins explains that with more countries providing vast opportunities for both local and foreign businesses to explore, the world’s economy only continues to grow. This is in effect to free trade between countries in that there is constant movement of activities that are known to impact on the economy of the countries involved. It is through globalization that once third world countries such as China have managed to have one of the fastest growing economies in the world. China as a country is one of the most sort out after locations for manufacturing sites meaning globalization has allowed it to experience an inflow of activities thus the economic growth and competitiveness it now enjoys.
The same applies to places such as India where labor is readily available and affordable. The economic position of such a country is improved through the global movement of labor where individuals from different countries travel in and out for work (Collins). Africa too as a continent is shaping its economic growth out of factors associated with globalization. Today, we are experiencing an era where poor countries have access to technology and resources that they can employ as a means of developing and this is all possible because of the globalization of products and services.
Another advantage of globalization that most organizations are implementing in their strategies is that of great foreign policies. Countries are being forced to reconsider their policies more so when they affect the inflow of economic activities. For instance, first world countries have had to reduce barriers such as tariffs subsidies and taxes in order to attract activities in their countries (Collins). Porter and Rivkin further explain that the United States is losing its bid to have more foreign economic activities based inside the country because of its poor policies that impact negatively on businesses and its own competitiveness ability. Therefore, it can be said that globalization has made it possible for all countries to have an opportunity to compete equally under this the new global market. As a result, those with business friendly policies are the most prefer and as such, the competitiveness allows for the development of polite foreign policies for all to enjoy.
Another benefit that is a driver for globalization is the aspect of cultural tolerance. We are all from different backgrounds, ethnic and races amongst other things. This means that we exercise different cultures and as such, what one considers to be important or normal is not necessarily the same for the other. Globalization is what it is today because of the continual knowledge and understanding of foreign culture (Internationalrelations.org). When we understand the diverse cultures of the world, we are then in a position to accommodate other people and as a result, great interactions. Globalization has made it possible for the people of the world to interconnect because we are now in a position to understand the cultural viewpoint of others. Cultures dictate a lot about of lives and this is inclusive of business. Collins is of the opinion that as our knowledge of global culture increases, we adopt economic strategies from various cultures thus benefiting from them.
In some way, the above can be interpreted to mean that cultural understanding has its economic benefits because through the constant interaction, people are in a position to learn something new. It is this knowledge that will, later on, be implemented in organizations thus experiencing different results. The more global our economic activities become, the more we are in an improved position to learn about different cultures. Globalization as an act of having one international market for all countries to benefit from can only result in the greater good of those countries. This is because of the improved economic growth, foreign policies, movement of labor and even the understanding of foreign cultures. As a movement, globalization is making it easier for organizations to gain new markets to explore as well as increased competitive advantage. Therefore, it is something that should be embraced by every country and well as every organization because chances of realizing preserved strategies and potential are increased with globalization.
Part II – Disadvantages of Globalization
As explained above, globalization is the movement of goods and services between countries for economic growth and development of the affected. It is an economic strategy that started long ago and is only reaching its heights now given the magnitude at which it is being implemented. When we consider globalization, we often rush to think of its benefits foregoing its negatives. There are several disadvantages associated with this act that is meant to empower even the poorest of countries and yet somehow they are not addressed as they should be. To understand this better, a look into the macroeconomic conditions and the drivers of globalization in a negative way have to be considered.
One disadvantage of globalization from a macroeconomic point of view is the income gap. The economic world as we understand it has the rich and the poor and it is the objective of key principles to ensure that the gap between the two does not grow further. However, looking at the economic effects of globalization, the gap continues to widen as opposed to decreasing. The global movement of economic activities favors the rich who are business owners and investors while the workers do not see its benefits. For instance, there are sweatshops that employ people under worse conditions and they are not paid as well as they should (Heerden). It is this unfair pay structure that makes globalization a disadvantage for the poor, who are the workers because they make way less than the profits achieved by the rich.
In addition to the above, globalization is a disadvantage to the poor population because of the persevered working conditions and exploitations. First world countries such as China and India are said to be the most affected in regards to poor working conditions. Heerden through the Ted video, Making global labor fair, starts by sharing briefly the sad stories of workers, the majority of who are children, in countries where huge brand names are investing into because of cheap and readily available labor. It is a sad reality that most of us take for granted given that we never seem to care about the supply chain of our finished goods and services. It is in third world countries where labor exploitation takes place the most but the same happens in first world countries where desperate citizens are exploited for labor (Heerden). Children who should be in school are forced to either drop out due to tough economic conditions at home or the government forces them into child labor for the economic benefit of the country. Both way, the competitive nature of globalization is robbing children of their childhood and at the same time leading to some of the worse and unfair human rights today’s economic worlds is yet to experience.
Another great disadvantage of globalization that results from some of its drivers is global warming. The world’s atmospheric temperature is at its highest today because of the results of man’s activities. Harvey explains that we are the most destructive species in the world as we explore it for our own economic benefits. As the race for globalization increases, the demand for resources also increases and this mean exploiting our environments even further. Today, we are not only responsible for the increase in atmospheric carbon dioxide and other related global warming gasses due to industrial growth but are accountable for the massive destruction of natural resources. It is from this that organizations get their resources from to turn into goods and services and as Internationalrelation.org explains, we have adopted a culture whereby the economic good trumps over every other concern. This is perhaps one of the reasons as to why the Kyoto protocol has failed to meet its objective years after it was proposed and adopted by countries.
It is a sad reality that something as powerful as globalization is causing havoc but it is even sadder that the latter is not being realized. The disadvantages of globalization as mentioned above are real and thousands of people are suffering as a result of this. There is the need to create more awareness on the negative effect of globalization on our children, labor market, income structure and the global environment. Failure to do so will only mean that we are fueling conditions that will eventually lead to consequences that could be a bit difficult to address at that particular moment. Globalization as an economic movement has its perks and we ought to celebrate them. However, ignoring the disadvantages because of the associated benefits is not the way to go about improving the situation. When we are in a position to comprehend the dangers of globalization, then we ought to have effective solutions in place for them. This way, the disadvantages will not force us in the future to completely do away with globalization because the more the disadvantages are ignored or not addressed effectively, the worse they become and eventually we will be forced to react to them.
Works Cited
Collins, Mike. “The Pros and Cons of Globalization.” Forbes, 6 May 2015, web 28 Apr 2017 https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#1feed22bccce
Harvey, Fiona. “Humans damaging the environment faster than it can recover, UN finds.” The Guardian, 19 May 2016, web 28 Apr 2017 https://www.theguardian.com/environment/2016/may/19/humans-damaging-the-environment-faster-than-it-can-recover-report-finds
Heerden, Auret Van. “Making global labor fair.” TED, Jul 2010, web 28 Apr 2017 https://www.ted.com/talks/auret_van_heerden_making_global_labor_fair
Internationalrelation.org. “Pros and cons of globalization.” Internationalrelations.org, 2017, web 28 Apr 2017 http://internationalrelations.org/pros-and-cons-of-globalization/
Porter, Michael, and Jan Rivkin. “Choosing the United States.” Harvard Business Review 90(3); 80-93 (2012). https://hbr.org/2012/03/choosing-the-united-states
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