Prepare a short analysis of the impact of globalization on a country. You should
ID: 368290 • Letter: P
Question
Prepare a short analysis of the impact of globalization on a country. You should include specific attention to some of the main forces associated with globalization (technology, trade and integration, offshoring and outsourcing, migration, transportation, environmental pollution) and the impact of these forces on different stakeholders (such as domestic companies, workers, farmers, indigenous cultures, and different demographic groups) within that country. You should draw implications of the issues and their impact on international management practice.
Explanation / Answer
Globalization has helped in reducing cultural, geographic and economic boundaries. It has resulted in the world being flatter. The main forces associated with Globalization are described as follows:
1. Technology: It has been the biggest driver of globalization. With the advent of internet and telecom, the geographical boundaries have now become lesser significant. A person in New York City can coordinate and work with a person sitting in Shanghai at the same time over the internet. This has only been possible because of the wide adoption of internet in the late 20th Century. Internet has also reduced cultural barriers. A person in Morocco has access to Indian movies and appreciates bollywood superstars. He is more exposed to the culture of India through online content than ever.
2. Trade & Integration: Trade leads to the efficient utilization of an economy's resources. Country having a comparative advantage in producing a good A can choose to produce only A and import the other- B in which it is not very efficient in production. This leads to efficiencies & gains. Trade also helps to integrate the global market. A NIVEA creme user from Germany might as well find the same brand in a store in Dubai or Colombo. This has led to world becoming a unified market.
3. Offshoring & Outsourcing: these are direct results of globalization. WIth the opening up of markets, multinationals may choose to find the cheapest resources to set up businesses and industries where the cost of production is lowest. Also, due to avaailability of cheap labour in certain countries, multinationals may choose to set up back offices in these countries.
4. Migration: With the ease in mobility due to globalization and more efficient means of transport, people are flocking to urban centres of development and as a result of this, large icities like New York, London, Mumbai and Hong Kong are crowded and the rents are sky high. This is a direct result of migration due to globalization. This leads to dissatisfaction between local people who feel that the outsiders are stealing their jobs to work at a lower pay.
5. Pollution: With information, people and technology, pollution has also grown global. An oilspill in Indian ocean can impact the ecology of South Asia. Garbage and industrial wate from developed countries is exported to other countries for dumping. This is a direct result of globalization.
6. Cultural Impact: Globalization has also led to the homogenization of cultures. People in one part of the world aspire to lead the life in other part of the world. Eating in global fast food chains is considered to be in vogue by kids and teens in the developing world who try to live the 'American Way'. This has led to concerns among people that the indigenous culture is getting lost due to globalization