Globalization is one of the key and inevitable parts in the current scenario. Moreover, in the recent time, increase in the popularity of capitalist policies among the major governments around the world also contributing in enhancing the intensity of globalization. Globalization refers to the concept of referring the entire world as a single entity with having no differences and barriers of any forms in between the processes (Hirst, Thompson and Bromley 2015). However, it is also to be noted that, globalization not only refers to the accumulation of the business processes around the world but also the cultural entity of different regions. One of the key examples of cultural globalization is the popularity of western culture in the major Asian economies.
In major cases, globalization is perceived as having only positive impacts on the global economy. However, it is also have a few negative impacts on different stakeholders ranging from countries to business organizations. Some parties are gaining profits from the initiation of globalization, while are some of them are facing loss over it (Gwynne 2014). In the recent time, there are various and different arguments being given by different authors and scholars regarding the positive and negative impact of globalization.
This report will discuss about the winners and losers from globalization. The winning and losing parties will be classified in terms of the particular countries or regions, business organizations and social groups. Arguments from different authors will be used in order to critically evaluate the impact of globalization.
Globalization is having varied impact covering both the positive and negative implications on developing and developed countries. Thus, this report will further classify the impact of globalization on the countries among developing and developed countries.
One of the major positive impacts of globalization on the developing and under developed countries is the increase in the employment rate. This is due to the reason that, with the initiation of the globalization, business opportunities between the developed and developing countries are increasing at a rapid pace (Claessens and Van Horen 2015). Major multinational national and large business organizations are belonging from the developed countries. However, these organizations have to incur added cost in maintaining their operation in their home countries in terms of cost of infrastructure, human resources and legislations. On the other hand, developing countries are having huge population, which lead to the lower cost of human resources along with having favorable business infrastructure (Najam, Runnalls and Halle 2016). Thus, business organizations from the developed countries are outsourcing their business operation in the developing countries that is leading to the increase in the rate of employment. The more will be the rate of employment, the more enhanced will be the economy of the developing and under developed countries.
Another advantage of globalization for the developing countries is the optimal utilization of the natural resources. This is due to the reason that majority of the developing and developed countries mainly in the Africa region are having abundance of natural resources (Barnett and Morse 2013). However, due to the financial incompetence of their government, these resources cannot get optimally utilized. With the help of the globalization, business organizations from the developed countries are entering in these regions in order to tap the natural resources for their own use. This is in turn increasing the domestic business opportunities in the developing and under developed countries (Meyfroidt et al. 2013). Moreover, they are being able to increase their foreign reserve with the help of their natural resources. The more organizations are entering in tapping their resources, the more probability of gain in employment is increasing. Globalization also helps the developing and under developed countries in developing their domestic consumer market. This is due to the fact that, with the help of the globalization, the consumers in these countries are gaining the access to latest products sold globally along with the access to the latest technologies in the market (Nadtochy et al. 2016). Thus, the standard of living of the average population in these countries are increasing and becoming at par of the global standard with the help of the globalization.
Similar to the developing countries, developed countries are also having both profit and loss from the initiation of the globalization. With the help of the globalization, majority of the large business organizations from the developed countries are entering in the developing countries in order to gain the access to the huge natural resources. Thus, this is also helping the economy of the developed countries to grow further (Franconeri, Alvarez and Cavanagh 2013). With the access to the competitive resources, the competitive edge of the organizations from the developed countries is also increasing. The more will be their profit, the more will be the inflow of the foreign reserves in the economy. With the help of the globalization, the market of the organizations from the developed countries is getting enhanced. This is due to the reason that, the large business organizations are having the required capital and capabilities to enter in the foreign countries. With the help of the globalization, they are having the opportunity to enter in their target foreign market without any barriers and trade tariffs. Thus, the market size of these organizations is getting enhanced along with their profitability.
One of the key negative impacts of globalization on developing countries is the exploitation of the natural resources. This is due to the reason that, in the previous section, it was discussed that, natural resources are being properly utilized with the help of the globalization (Mejia Acosta 2013). However, it is also to be noted that, natural resources are non-renewable in nature and thus, over exploiting of them will lead to the end of the resources of the developing and underdeveloped countries. This will ultimately reduce their national economy to a large extent (Bhagwati 2014). Once the natural resources get depleted, business corporate will leave the countries, which will gain cause unemployment and dwindle the entire economy.
Though globalization is letting both the developed and developing countries in fair trade, but the ultimate profit is mostly gained by the developed countries. This is due to the reason that, large multinationals are using their natural resources in order to sell the end products to the developed markets and gaining profits from it. Moreover, the earned profits are going back to their home countries (Guo 2013). Thus, developing and underdeveloped countries are left with nothing much. This concludes that developing and underdeveloped countries are having fewer shares of profits compared to the developed countries. In the recent time, globalization is also leading the way for the business organizations from the developed countries to outsource their partial operations to the developing countries. This is due to the reason that, developing countries are having the less cost of human resources. Thus, with the help of the globalization, these organizations are shifting their manufacturing facilities in the developing countries in order to reduce their cost of production (Morschett, Schramm-Klein and Zentes 2015). This is leading to the increase in the unemployment in the developed countries.
Similar to the phenomenon of organizations entering in the developing and underdeveloped countries, vice versa is also happening. For instance, American market is flooded with the cheaper products from the Chinese vendors. This is affecting the domestic producers in the market, which in turn crippling the economy of the developed markets. Globalization is having both positive and negative impact on the global society Meyfroidt et al. 2013). The following sections will discuss about the negative and positive impact of globalization on the social cultures.
As discussed earlier, initiation of the globalization helps in the increase in the rate of employment in the developing and underdeveloped countries. Globalization is helping in the increase in the investment by the foreign organizations in these countries. This is further amplifying the job opportunities in the particular society (Stromquist and Monkman 2014). Thus, the average of the poverty is reducing with the increase in the employment opportunities and is having positive impact on the society. Globalization is helping in increasing the flow of the latest technology and concepts in the field of education and healthcare. This is helping the general population to have the access to the latest technologies in the market. Hence, the difference between the social standard in the developed and developing countries is decreasing (Stronquist and Monkman 2014). Moreover, globalization is also helping in the increasing the competition in the market with the inflow of more foreign organizations. Thus, the more will be the competition, the more will be the price wars in the market. Customers will be able to get the access to different products and services in less cost.
Apart from only having business implications of the globalization, it is also having social and cultural impact on the society. One of the key implications of globalization in the society is the cultural imperialism. This refers to the colonization of the cultural elements of the developed countries on others (Yankuzo 2014). In the recent times, the increase in the popularity of the western culture mainly in the Asian regions is one of the prime examples of negative impact of globalization on the society. Popularity of the fast food chains such as McDonald’s and KFC can be termed as cultural colonization. This is affecting the indigenous culture of different countries (Corak 2013).
In terms of language also, globalization is having negative impact. Gaining popularity of English as the official language in different countries such as India is causing the indigenous languages on the verge of extinction. This phenomenon is also being further amplified with the presence of the large multinationals from the developed countries in the developing and underdeveloped countries (Bradley and Bradley 2013). Therefore, the culture and social structure of the developed countries is influencing and changing the existing social structure of other countries around the world. Globalization is also leading to the increase in the rivalry between the major developed countries. This is due to the reason that, all the major economies are competing among themselves in order to gain the access to the natural resources in the undeveloped countries. This is leading to the starting of civil war in these countries. On the other hand, the local population of these underdeveloped countries is suffering from the increased rivalry between the major economies. In the recent time, there are various instances of social war, which are fueled by the major economies for larger interest.
Globalization is also leading the increase in the inequality between the different sections of the society. Rich people are getting richer and poor is becoming poorer due to the globalization. This is due to the reason that, with the initiation of the globalization, large multinationals are leveraging maximum profit from the liberalization of the global market due to their huge access to the capital and capabilities (Milanovic 2016). On the other hand, it is not possible for the small organizations to compete with them in the global market with their limited resources. Thus, the major profit is being taken by the large multinationals from the developed countries (Corak 2013). This is increasing the gap between the sections in the society. People from the top of the pyramid are benefitting from the liberal market while sections from the bottom of the pyramid are exploited and are left with nothing.
Thus from the above discussion, it is being seen that, globalization is having both negative and positive impact on the developed, developing and underdeveloped countries. It is therefore difficult to identify the exact losers or winners from globalization. However, it can be concluded that based on the above discussion, it is seen that the majority of the benefits of globalization is being with the developed countries and large multinationals. According to Jaumotte, Lall and Papageorgiou (2013), even though the developing countries are geeting acess to the latest technologies and other infrastructural support at par to the developed countries, but still the control is with the developed countries. This is due to the reason that, globalization is more benefiting the large multinationals in transferring their technologies to the developing and underdeveloped countries for their own business interest and withdrawing them upon completion of their job. Thus, the entire process of leveraging the benefits of the globalization is being controlled by the developed economies.
Bhagwati (2014), also stated that developing countries are also being affected from the globalization due to the dumping policies of the large organizations from the developed countries. According to the author, this is again reducing the positive impact on the developing countries. On the other hand, organizations from the developed countries are dumping their obsolete technologies and concepts to these countries in order to extend their life cycle. Hence, according to both the authors, developed countries are the key beneficiaries of the globalizations compared to other countries.
The social structure of the developing and developed countries is also being degrading. As stated by Goryakin, Lobstein, James and Suhrcke (2015), globalization is mainly casuing negative implications on the less developed countries compared to the developed countries. This is due to the reason that, the social structure of the developed countries is already accustomed to the concept of the globalization and it is influencing the social structure of the less developed countries. Thus, the indigenous culture of these countries is affected by the initiation of the globalization.
Conclusion
Thus, it can be concluded that all the countries, regions, companies and different social groups are having both positive and negative implications from the initiation of the globalization and there is no exact winner or losers to it. The impact of the globalization is more or less for different countries and companies. In this report, it is being seen that, developed countries are having maximum benefits from the initiation of the globalization compared to the less developed countries. However, it can also be concluded that all the related stakeholders including the social groups, companies and countries are having more or less benefits of globalization. In addition, with the help of the globalization, the differences between the countries in terms of the culture and technologies are reducing at a rapid pace. This is slowly conveying the key objective of globalization as one single entity in the entire world.
Reference
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