Globalization
Globalization is the process by which a company expands its operations beyond its borders. This can simply be defined as the establishment of businesses in countries other than one’s own. Globalization, according to Manley et al (520), is concerned with capital, labor, and market connectedness. Globalization makes it easier to move goods, ideas, and information from one country to another. This is primarily due to the fact that globalization aids in the removal of barriers that impede the passage of information, ideas, capital, and labor from one country to another. People in both the mother and foreign countries have varying reactions to the topic of globalization. Debates currently raging about globalization include whether it even exists, whether it is more important now than at some earlier date, whether it is displacing the nation-state, and whether it is more important than regionalism or localism’ (Stallings, et al, 28). In this essay, I will show the positive as well as the negative impacts that have been experienced as a result of globalization.
Positive effects
Globalization leads to the creation of employment opportunities in the foreign country. Unemployment is one of the problems that are prevalent in most of the developing countries. This is because individuals in developing countries are unable to raise capital to set up businesses (Manley, John, 510). However, most of the multinational companies have a significant outlay of capital. These companies then use their significant outlay of capital to set up business enterprises in the developing countries. Due to their location in these foreign countries, they tend to source their labor from the citizens of the countries of their operation (Evans, Peter, and Barbara, 12). They employ the citizens of the foreign country to work in their firms to help in the production of the commodity. Besides, these companies create employment opportunities for other players in their industry. This is because these industries cannot work in isolation, but need to work in tandem with other employers in the industry. These usually take the shape of the suppliers. When the Coca-Cola plant was set up in Malaysia, these resulted in the direct creation of approximately 1000 job opportunities. Again, the facility resulted in the indirect creation of 8000 other job opportunities.
Globalization has also been shown to facilitate the transfer of technology from mother countries to the foreign countries. Most of the developed countries tend to exhibit high levels of technology compared to the developing countries. These developed countries are characterized by extensive mechanization and industrialization. When these companies set up branches in the developing nations, with them, they transfer these skills and technology. This lead to increased efficiency and mode of production in the developing countries (Evans et al., 22). Globalization leads to the growth of the small scale industries in the developing countries to considerably larger industry. This is essential in that it leads to increased productivity and reduction in time taken to produce commodities. For example, China's involvement in the development of infrastructure projects in Africa has resulted in the excellent completion time of these projects. These projects have opened the economy of the developing countries for other economic opportunities (Manley, John, 518). For a developing country to efficiently participate in the world economy, the state has to embrace technological advancements.
It has been shown that globalization leads to increased cooperation between countries. Consequently, these lead to the creation of the global economy. This is because globalization leads to the development of partnerships. Apparently, with companies setting up branches in other countries, right relationships are fostered. These have been shown to reduce war. For instance, it is due to globalization that the war between previously conflicting countries in the Middle East has stopped (Manley, John, 521). While initially some of these countries used to continually fight each, with globalization these fights have been put to a halt. This is because these countries recognize the need of maintaining good partnerships relations, which are mutually beneficial to both countries.
Increased competition between industries can be credited to globalization. When these foreign companies set up branches in other countries, they bring with them sufficient and innovative measures of production. The native industries in these countries are then expected to level up or get left out. This, in the long run, leads to increased innovation as each industry tries to gain an advantage over the other competing industry (Evans et al., 26). This is beneficial to the consumers in the end because with increased competition; companies have to increase their quality or lower their prices, in some instances both. For example, General Motors (GM) had to reduce the time taken to produce a car from four years to months as a result of competition. The consumer is the primary benefactor in this case.
Negative effect
Loss of employment
Globalization has been shown to loss of employment in the mother countries. Where a company deems it more profitable operating in another country other than the home country, this leads to the loss of employment opportunities for the citizens of the mother country (Evans et al., 29). This is because these employment opportunities are transferred to citizens of another country. Again, due to the liberalization of a market if a company feels the conditions in its operating countries are not favorable it will relocate to another country. This is usually characterized by widespread laying off workers (Manley, John, 524). This open economy also opens the room for these companies can also use exploitation of the workforce. Globalization as a channel of running away from expensive labor workforce.
Globalization can also be seen to lead to loss of employment especially with the transfer of technology. Technology comes with increased mechanization, which eliminates the need for human labor. This is because these machines do similar work more efficient and in a short period compared to people.
Impacts on environment
The massive industrialization occasioned with globalization leads to negative impacts on the environment. As a by-product of their productive activities, these industries release waste products into the environment. Due to their highly mechanized nature, most of the industries release toxic fumes into the air (Evans et al., 31). For example, various industries have been shown to release the greenhouses gases into the environment. These greenhouses gases trap heat in the atmosphere leading to unusually high temperatures on earth; a condition referred to as global warming. Some of the gases have also been shown to deplete the ozone layer, which prevents the harmful rays from the sun reaching earth.
Conclusion
In conclusion, we have shown the negative and the positive impacts associated with globalization. These effects are experienced in either the mother or foreign country. In a bid to regulate these effects, various countries have put in place regulative measures that control the operation of foreign companies.
Works Cited
Evans, Peter, and Barbara Stallings. “Development Studies: Enduring Debates and Possible Trajectories.” Studies in Comparative International Development 51.1 (2016): 1-31.
Manley, John F. “Globalization, Welfare States, and Socialism’s Future.” Rethinking Marxism 27.4 (2015): 508-526.
