Globalization in a narrow sense can be described as the increasing internationalization of production, distribution, and marketing of goods and services. In a broader sense, it refers to the expansion of global linkages, the organization of social life on a global scale, and the growth of a global consciousness, hence to the consolidation of the world society. It is a complex economic, political, cultural, and geographical process in which the mobility of capital, organizations, ideas and peoples has taken on an increasingly global or transnational form. (Wiseman., 2000 ). As said by Di Filippo globalization cannot exist in a vacuum. There are benefits as well as consequences of globalization. Globalization has largely affected the Australian economy and the business enterprises both positively and negatively. For example, during the last ten years, Australian universities have become progressively more "international" in focus, scope and strategy. The number of international students studying in Australia has risen to record levels, student and faculty exchanges have become more important activities for Australian institutions, and international activities of an entrepreneurial nature have assumed a significance far beyond that which could have been predicted a decade ago.(Graham Pratt, 1999) But the effect of globalization on the business enterprises of Australia was not the same. For agriculture, globalization supposedly results in producers trading in an unregulated market-place. Since the 1980’s tariffs have been progressively removed from Australian agriculture produce leaving farmers virtually unprotected in the world market. For Australian farmers with internationally competitive product this is a major blow to their globalizing ambition and further highlights the gap between the rhetoric and reality of globalization.(Alston, 2004) This is a very important issue for the Australian government and its people to know about the impacts of globalization on the economy of Australia, the society and different business enterprises. This essay will critically examine the pros and cons of globalisation on Australian business.
Globalization is not new. Australia has been involved in trade, investment, financial flows, technology transfers and the migration of labor since its foundation as a colony. What has changed is the size, direction and influence of these transfers, especially since 1980. There are a number of factors that have aided this transformation. They include:
The expansion of new markets – foreign exchange and capital markets are linked globally. They operate 24 hours a day with dealings any where in the world possible in real time. Financial deregulation and the floating of the Australian dollar since 1983 intensified the impact of globalisation on the Australian economy. •
New technology and the tools of globalisation – the internet, email, mobile phones, media and communication networks have all sped up the process of globalisation. They have increased the spread and speed of knowledge transfer and communication. Australian consumers can buy products from any nation in the world, transfer funds between accounts or purchase shares in any major market. Australian businesses can market their products at a fraction of the cost and be exposed to a global market place of competition. This potentially is the closest we will ever come to the perfect market. •
New rules and restrictions – Multilateral agreements on trade, services and intellectual property rights, backed by strong enforcement mechanisms, reduce the scope for national governments to develop their own economic policies.(Stokes, 2000)
Globalization and Industries of Australia
Competitive Advantage theory of Michael Porter recommends that a company conduct an industry structure analysis and then choose a specific firm positioning based on one of three generic strategies: cost leadership, differentiation or focus. Many Australian industries...
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