Every era have a defining moment that changes the course of the times, in relation to the mechanics of doing business, politics, impact on socio-economic aspects and popular culture.
As an analysis, the globalization debate, from good and bad perspective has to be analyzed from a global viewpoint.
In this highly digitized world, everything is connected like ever before, an incident in one location of the world sparks controversy in another part of the world, and with the technological advances the world has become an integrated globalized playground popularly referred to as Globalization.
The impact of globalization and its impact on the business are massive in view of the fact demand and supply increased from national to international level, due to globalization, which led to the trade exchange as investors, partners and companies were transformed into multinational corporations.
Multinationals had a major impact in reshaping the economic and social patterns globally, by not only offering products and services, but more importantly, investment, providing jobs, technical acumen and competition that in turn benefited consumers with having an array of choice for products and services they required.
The reasons that globalization is good for the business are as follows:
The reasons why Globalization is good for a business starts with the creation of a global market for both the business and the customers, the primary reason being that business have access to a global product line and thus can target consumer from different segments at a lower price.
Business in developing countries that are referred to as poor have benefited from the aforementioned pointer, as besides the products and services offered the cash pumped in the economy helps in decreasing the difference in dollar rate that helps their business profitability.
The barriers to businesses such as taxes, tariffs and subsidies are reduced in relation to free trade. The businesses are able to take advantage of the latest technologies to incorporate into their business operational methods. A major example for free trade and how it impacts economies is the North American Free Trade Agreement (NAFTA), that has connected USA, Canada and Mexico into import and export agreement with regards to services and products sans restrictions.
Business are able to connect with consumers globally thus, giving them the opportunity to refocus on the strategic vision by in targeting a global business way forward, especially living in the age of social media, business are truly globally connected at all times.
Oil rich countries like Bahrain that are not feasible for farming get access to world class fresh food, thereby, impacting the business economies of two countries through oil and food.
Human resource is also a major part of globalization, case in point being, construction companies getting labor from abroad in the Middle East and UK hospitals hiring doctors and nurses due to local shortage (Nick Gibson, 2014).
The reasons that globalization is bad for the business are as follows:
The reasons why Globalization is bad for the business, starts the factor of import and export measure not really fulfilling the potential that was promised thus impacting business.
The multinationals when enter into a new market with their investment, set up and operational superiority, shuts down smaller local business, the most relevant example in this regard is Wal-Mart, with its low prices and huge tactical benefits, proved to be the bane for many local businesses resulting in shutdown.
The negative impact for business in the first world i.e. US and UK is that major business have shifted their operations in countries that helps them in saving operational costs, Nike and Apple are case in point, that resulted in jobs loss and also impact on the economy, as stated by Mike Collins (2015), in his article in Forbes, that China’s most favored nation status drained away 3.2 million jobs.
For local developing countries business the new techniques and technology puts the information at risk of stolen or copied.
Currency manipulation needs to stop to create a balanced trade environment; the trade deficit leads to job loss, thus showcasing the inability of the business to run a profitable business and grow to support the economy.
The aforementioned pointers are with regards to the impact of globalization on the businesses. Globalization as a political and economic force has taken the world businesses by storm, however, it has to be noted that, like any other system globalization as a tool for the business require massive ramifications that is required to be able to create a win-win situation for all parties involved.
References
Mike, C. (2015). The Pros and Cons of Globalization. Forbes. Retrieved from http://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of- globalization/#d7d7fd92170a
Nick, G. (2014). Pros and Cons of Globalization: Controversy and Discussion. Udemy Blog.Retrieved from https://blog.udemy.com/pros-and-cons-of-globalization/
