The Benefits and Disadvantages of Globalization
Globalization has an impact that is widely spread and perceived in a variety of different ways. Specifically, its long-term positive effects and the portion that contains negative influences. The definition of globalization has evolved and been altered over the years. Today it is viewed as a process that continuously strives to integrate economies and societies by means of exchange and communication network. The term is also often utilized to show changes in technological, socio-cultural, and political environments (Hill 2009).
The process of globalization is contingent upon the integration and interaction among companies, people, and governments of different nations that come to be driven by investments, international trade, and information technology. The process itself has many effects on culture, economic development, the environment, prosperity and the physical well-being of humans around the world. For over a thousand years, corporations and people within different countries have been selling and buying from and to each other therefore globalization itself is not a new concept. Likewise, over the past centuries, corporations and people have invested in other countries enterprises. In fact, many attributes that are seen among today’s globalization are similar to those that were utilized before the initial World War in 1914 (Hill 2009).
Globalization does not always signify a unified global economy simply because internationally, every product within an individual country is not tradable. Haircuts and cement are examples of things that are consumed and produced locally proving that most international trade remains in the area it originates. There are three regions that are economically dominant across the globe and they include: North America, East Asia, and Europe. Canada is the United States primary customer in North America’s region while Mexico is number two. The other national economies integration is a continuous process (Weidenbaum 2004).
Within the European Union (EU), economic integration seems quite secure. Although, it may be hard to believe, the EU's most important achievement has absolutely nothing to do with the economy. The union is interested in minimizing the restrictions on trade, business, and labor. Since there is an increase in services, goods, and investments there is an increased ability for these items to move freely among one EU nation to another. Therefore, European businesses achieve greater economies of scale making them more efficient. However, serious disadvantages can result for countries outside the EU. The EU has common external trade restrictions against nonmembers that allow them to reduce the internal trade barriers. Before the European Common Market gained momentum in 1960, more than 60% of the foreign trade of the 15 member nations was outside the EU. Presently, about 70-80% stays in the EU which is not good for American companies who are trying to export to Europe (Weidenbaum 2004).
During the reign of globalization it has produced elemental changes in businesses across the nation. For example, half of Xerox's employees work on foreign soil and less than half of Sony's employees are Japanese. More than 50% of IBM's revenues originate overseas; the same is true for Citigroup, ExxonMobil, DuPont, Procter & Gamble, and many other corporate giants. In a pursuit to aid in financial development, previously competitive companies have formed strategic alliances overseas on different continents (Weidenbaum 2004).
The electronics and automotive industries provide numerous examples of these alliances. Volkswagen produces cars with Ford for the Brazilian market, while General Motors and Toyota operate a major joint venture in the U.S. Boeing and British Aerospace have teamed up for military projects and in today's global market; the same...