Basically ‘Globalization’ is the process of increasing the connectivity and interdependency of the world market and business.
Covering a wide range of distinct political, economic, and cultural trends, the term “globalization” has quickly become one of the most fashionable buzzwords of contemporary political and academic debate. In popular discourse, globalization often functions as little more than a synonym for one or more of the following phenomena: Economic Liberalization: The pursuit of free market policies in the world economy. Westernization or Americanization: The growing dominance of western (or even American) forms of political, economic, and cultural life. Internet Revolution: The rapid increase in number of new information technologies. Global Integration: The belief that humanity stands at the point of beginning of realizing one single unified community in which major sources of social conflict have vanished (Scheuerman, 2010).
Impacts of Globalization:
Globalization and the decline in power of national governments: ‘Globalization’ is commonly used as a shorthand way of describing the spread and connectedness of production, communication and technologies across the world. Many of the activities that previously involved face-to-face interaction, or that were local, are now conducted across great distances. There has been a significant de-localization in social and economic exchanges. A major causality of this process has been a decline in the power of national governments to direct and influence their economies. Shifts in economic activity in say, Japan or the United States, are felt in countries all over the globe. The internationalization of financial markets, of technology and of some manufacturing and services bring with them a new set of limitations upon the freedom of action of nation. Best example was during the recession in America the effect was felt all over the world and also the recession in Greece was threatening all the world economies. Yet while the influence of nation states may have shrunk as part of the process of globalization it has not disappeared. However, it can be said the impact of the globalization can be determined by the way in which national governments frame their policies.
Globalization and the impact of multinationals on local communities: Multinationals can impact on local communities in various ways. First: They look to establish or contract operations like production, service and sales in countries and regions where they can get cheaper labor and resources. This causes flow of money into this society but it also leads to unemployment in those areas where they previously operated. The wages paid in the new settings can be minimal, and worker's rights and conditions poor. Best example is like when many international brands(in USA) outsourced there plants of production into different countries like in China, workers were paid wages like 13cents per hr, where living cost was approx. 82cents per hr and for same worker in USA they used to pay 10$ per hr. Second: multinationals constantly seek out new or under-exploited markets. They look to increase sales - often by trying to create new needs among different target groups. One example here has been the activities of tobacco companies in southern countries. Smith, M. (2002).
The liberalization of the domestic economy and the increasing integration of India with the global economy have helped step up GDP growth rates, which picked up from 5.6% in 1990-91 to a peak level of 77.8% in 1996-97. Balakrishnan, C. (2004, JAN).
Positives & Negatives about Globalization:
Globalization, the increasing integration and interdependence of domestic and overseas markets, has three sides: the good side, the bad side, and the ugly side (Mourdoukoutas, 2011). According to Pannos Mourdoukoutas (Professor and Chair of the Department of Economics at Long Island University): The good side of globalization is...
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