Globalization
Globalization can be defined as the increasing process of interdependence and interconnection between different political, social, and economic components of the world.
It relates to the free movement of goods, services, and people across the world in a seamless and integrated manner. It is the process through which businesses or other organizations develop international influence or start operating on an international scale. It can also be defined as the process by which goods, services, capital, people, information, and ideas flow across national borders. It refers to the increasing integration of markets (exchange) and production. It incorporates the mobility of resources (capital, labour, organization, and knowledge).
Features of Globalization
Opening and planning to expand business throughout the world
Erasing the features between domestic and foreign markets
Buying and selling goods and services from/to any country in the world
Global orientation in strategies, organization structure, organizational culture, and managerial expertise
Sourcing for factors of production and inputs like raw materials, machinery, finance, technology, human resources, and management skills from the entire globe.
Dimensions of Globalization
There are four major dimensions of globalization:
Economic Globalization: This refers to the inter linkage of the market in goods, services, capital trade and finance. In other words, it refers to the intensification and stretching of economic interrelations around the globe. It involves long-distance flow of goods, services, and capital as well as information and perceptions about market exchange. One major goal of Economic Globalization is the destruction of economic borders and removal of barriers to create a free-market system where capital can move freely.
Cultural Globalization: Through Globalization, cultural diversities have been brought together to form a global culture. Advances in communication, transportation technology have also reduced barriers affecting distance and culture. Culture is broad and multi-faceted but in the discussion on Globalization, it refers to the symbolic construction, articulation, and dissemination of meaning. Globalization has allowed for the spread of customs, languages, and products. It has allowed people to become familiar with the culture of other countries thus allowing for greater understanding.
Political Globalization: Exchange of views and experiences between countries regarding the establishment of good governance systems, legal systems, human rights, free media etc. There is becoming an increasing shift away from command and mixed economies to the free market model. Political Globalization can be said to be the intensification and expansion of political interrelations around the globe. It focuses on how power is accumulated in a single international government. Many international organizations have evolved over the years, with the United Nations probably the most renowned one. Their main aim is to achieve peace between different nations. Apart from achieving peace, Political Globalization can also serve as a platform to solve other issues such as poverty, organized crime, education etc.
Ecological Globalization: The world is facing a global warming, ozone layer depletion, pollution, loss of biodiversity etc. The world community is therefore trying to encourage countries to adopt measures to protect the environment. Activists have identified that Globalization has led to increased consumption of products that have impacted on the ecological cycle. Increased consumption leads to increase in production of goods which in turn puts stress on the environment. Also, while transporting products, pollution levels might be increased. Also, transportation has put strain on non-renewable energy sources such as gasoline.
Effects of Globalization
Globalization has impacted massively on the world. Its effects can be evidenced through the following:
Improved Communications: The development of communication technologies such as the internet, email and mobile phones have been vital to the growth of globalization because they help Companies operate throughout the world. Also, through the development of satellite TV channels such as CNN and SKY, marketing avenues have been created for products.
Improved Transportation: The development of refrigerated and container transport, bulk shipping and improved air transport has allowed for easy mass movement of goods throughout the world.
Trade Agreements: Multinational Companies and rich Capitalist countries have always promoted free global trade as a way of increasing their wealth and influence. International organizations such as the World trade Organization and the IMF also promote free trade.
Global Banking: Modern communication technology allows vast amounts of capital flow freely and instantly throughout the world.
Growth of Multinational Companies: The growth of big MNCs’ such as Microsoft, Nike etc. is a cause as well as a consequence of Globalization. Globalization allows MNCs to produce goods and services and to sell products on a massive scale throughout the world.
Changed Food Supply: Food supply is no longer limited to seasons; Food can be bought anywhere in the world at any time of the year.
Division of Labour: MNCs tend to search for the cheapest possible locations to manufacture and assemble components, as such production processes may be moved from developed to developing countries where costs are usually lower.
Less Job Security: In the global economy, jobs are seemingly becoming more temporary and insecure.
Damage to the Environment: More trade results in more transport which uses more fossil fuels and may cause pollution. Climate change poses a big threat to our future.
Cultural Impact: As the world becomes more unified, diverse cultures are being ignored. Also, MNCs may lead to the demise of local firms.
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