The effect of globalization on stakeholders Introduction
Globalization is a widely discussed topic so it is therefore not easy to explain such a complicated word. However the common definition of globalization comes from the word global which means the worldwide coming together of countries and nations. In other words, Globalization is the process of international integration arising from the interchange of values, products, ideas and other aspects of culture. Although it is easy to assume that globalization is a fairly new phenomenon of the 20th century with the rise of the internet and international trading, it can be argued that globalization had its first real Impact on the global market when Columbus discovered America and
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The type of material wealth we have today would simply not have been possible without international trade as it offers countries products that they would otherwise not have access to. Taking advantage of this fact gives nations an incentive to trade with and to invest in smaller developing countries, allowing them to take an active place in the global market and strengthening and increasing their economic development. Countries such as India and China serve as great examples of the potential Impact that globalization can have on developing countries (Stachkov, A2015).
According to Anthony Thirlwall (2003:13) " Developing countries depend on developed countries for resource flows and technology, but developed countries depend heavily on developing countries for raw materials, food and oil, and as markets for industrial goods".
The relationship described between developed and developing countries above is commonly referred to as
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With the progress of globalization it became necessary for companies to offer flexible work environment as well as working from home and online systems, furthermore feminization of labor when woman take a place in various sectors of business. On the other hand the incredible competition between multinational firms has caused negative effects on employees. Again competition leads to a great demand of skilled workers at the expense of unskilled and the income gap between the two groups has grown (Vandijk, MP
Fan, G., and X. Zhang. "How Can Developing Countries Benefit from Globalization: The Case of China." Eldis. N.p., n.d. Web. 20 Apr. 2014.
The trend toward a more globalized market has become increasingly developed in the latter half of the 20th century. Emphasis on world trade has become a dominant figure in almost every Nation’s economy. Between 1970 and 2000 world trade has experienced an increase of almost 370 percent. Concurrently, world GDP increased by 150 percent. Trade is beneficial to Nations because it allows the creation of avenues that aid in efficient allocation of resources (Canas & Coronado). Countries can gain from trade when they specialize according to their comparative advantage. This is, when they create conditions where goods and services can be produced at a lower opportunity cost than in any other country. Along the same logic, countries can also make large profits by taking advantage of another countries comparative advantage.
Thomas Friedman contends that globalization 1.0 shrunk the world from large to medium and countries and governments were the main protagonists. The governments of countries would finance explorers like Christopher Columbus to discover new parts of the world to enhance trade and commerce. The governments financed the explorers through the exports of manufactured goods and by taxing nobles and their manors. Globalization 1.0 lasted from 1492 until the early 1800’s. This era was the beginning of a global arbitrage. Countries were the dynamic change agents during this phase of globalization. For example, Spain explored South America, Britain colonized India, and Portugal colonized East Asia. The data that was gathered by business managers during this period included maps, trade routes, the languages of the indigenous people, and new kinds of trade goods that could be procured from the new world such as gold, silver, corn, and potatoes.
Although it is becoming a rising topic, globalization is not new. The concept of globalization has existed from beginning of time, but gained most momentum when the earth was discovered not to be flat, and traveling east was possible by traveling west. This allowed countries to trade for any foreign product they once may not have had. Globalization integrates countries with different economies, societies, and cultures across the world into one global network, with the ultimate goal of one emerging economy (Ahearn). Globalization has been fueled by new trends in trading policies, technology, and the world supply of labor.
Nowadays one of the most commonly used terms is globalization. But what does globalization mean? Does it mean dissappearing borders, a common trade unit, no tax in trade abroad, political awareness across the world, or, in extremes, even interfering with other countries' domestic affairs?
Globalization has several definitions, as Andrew McGrew underlines it. He uses four different ones in order to get a more complete definition. In this way globalization is defined as ‘the intensification of worldwide social relations which link distant localities in such a way that local happenings are shared by events occurring many miles away and vice versa’, ‘the integration of the world-economy’, the ‘de-territorialisation – or growth of supraterritorial relations between people’ and finally as ‘time-space compression’ (Giddens, 1990, p. 21, Gilpin, 2001, p. 364, Scholte, 2000, p. 46, Harvey, 1989, cited in Mc...
Trade is more than the exchange of goods and services; it sows the seeds for growth, development and provides the knowledge and experience that makes development possible (Cho, 1995). Trade is considered one of the main driving forces behind economic growth and poverty reduction, especially in Africa (Fosu and Mold, 2008). Adam Smith’s 1776 theory of absolute advantage states that a trading nation can gain by specialising in the production of the commodity of its absolute advantage and exchanging part of this output with other trading partners for the commodities of its absolute disadvantage (Llorah, 2008). This process enables countries to extend beyond their borders, allowing greater specialisation in production, enhanced effectiveness in use of thin resources, the growth of national income, the capacity to accumulate independent wealth and enhances the growth of the economy (Cho, 1995). According to DFID’s report, Trade Matters, other positive derivatives include raised employment, increased household income and the chance for people to earn their way out of poverty, independent of aid (DFID, 2005). The role of trade, while strongly advocated, is still highly debated (Collins and Graham, 2004; Madeley, 2000) and many recent studies question the positive role of economic growth on open trade (Bene, 2009). The extensive arguments surrounding this controversial discussion empirically highlight the difficulty in isolating the effect of trade liberalisation on economic growth, although it is clear that it does, and will continue to have, an important role in poverty alleviation.
“…increasing international trade and financial flows since the Second World War have fostered sustained economic growth over the long term in the world’s high-income states. Some with idle incomes have prospered as well, but low-income economies generally have not made significant gains. The growing world economy has not produced balanced, healthy economic growth in the poorer states. Instead, the cycle of underdevelopment more aptly describes their plight. In the context of weak economies, the negative effects of international trade and foreign investments have been devastating. Issues of trade and currency values preoccupy the economic policies of states with low-income economies even more than those with high incomes because the downturns are far more debilitating.1”
Globalization, love it or hate it, but you can’t escape it. Globalization may be regarded as beneficial from an economic and business point of view, but however cannot be perceived the ditto when examined from the social sciences and humanities side of it. Globalization can be argued as a tool for economic growth, advancement and prosperity through co-operation between the developed and developing countries. The pro-globalization critics argue that the benefits that globalization brings to developing nations surpasses or outcasts the negative impacts caused by globalization and may even go a step further to state that it is the only source of hope for developing nations to prosper and stand out. However, the real question to be asked is as to what extent are the positives argued upon without taking into account the negative aspects of globalization towards developing countries. Moreover, how many developing countries out of many are exactly benefiting or even prospering from globalization is another question to consider. Therefore, my paper will dispute that indeed growth and advancement provided by globalization to developing countries is beneficial in short-term, but in the long-run, it will only bring upon negative impacts and challenges due to the obstacles involved such as exploitation of labour and resources, higher increase in poverty, and effects of multi-national corporations on local businesses and the economy, and to an extent the effects on the developing country itself.
Globalization’s history is extremely diversified and began during the beginning of civilization. Now we live in a world that is constantly evolving, demanding people to use resources in locations that are very difficult to obtain certain resources. This could make it completely impossible to operate in these specific parts of the world. However, globalization allows people across the world to acquire much needed resources. Globalization creates the opportunity for businesses to take advantage and exploit the ability to take part of their business to a different country. Nevertheless, globalization is part of today’s society and will be involved in virtually all situations.
Globalization is the connection of different parts of the world. Globalization results in the expansion of international, cultural, economic, and political activities. As people, ideas, knowledge, and goods move easily around the globe, the experiences of people around the world become more similar. (“Definition of Globalization“, n.d., ¶ 1)
Globalization is nothing but interaction, integration exchanging of views and other aspects of culture. It is very important to spread any matter from one part to the other part. If you observe the modern world we could easily say it is modernized or in other words globalized. Globalization is helping us to see different cultures, social activities and cultural division around us.
The term ‘Globalization’ refers to is the integration of economies, industries, markets, cultures and policy-making round the globe. It explains a progression by which both national and regional economies, societies, and cultures have become incorporated through the universal system of commerce, communication, migration and transportation.
Globalization is a very complex phenomenon, basically it means the relationship and connection between countries are getting closer, and they have more contact, politically and economically. Globalization has influenced the world in many different ways, like culture, economy and politics.
International trade is an economic practice where countries can import and export goods with no concerns to government intervention which includes tariffs and import/export bans or limitations. International trade has several advantages on developing countries; who are nations with low levels of economic resources or low standard of living. Developing countries can advance their economy through strategic free trade agreements. Free trade generally improves the quality of life of poor nations. Nations can import goods that are not easily available within their borders; importing goods may be cheaper for than trying to produce consumer goods. Many developing nations do not have the production procedures available for translating raw materials into valuable goods.