Globalization is characterized by the absence of matchbox walls adorned by individual countries on the basis of suspicion and mutual mistrust. Countries were initially different and categorized into divisive worlds, a fete that translated into the challenge of dealing with international economic holocausts like recession. Globalization is a primal fiscal concept which impact is not only limited to the economy of countries, but is embedded within all life aspects encompassing cultural, political, psychological and social ambiences. The discussions, herein, work to bring out the essential components attributed to globalization, in line with its advantages and disadvantages. The consequent impacts of these features of globalization on the activities and profiles of business organizations are ultimately elicited within each entity advantage or pitfall.
Rivoli argues that globalization, to be specific, the development of international trade, has had and continues to have a beneficial impact on people’s lives. Globalization connotes a phenomenon in which countries join together economically in the context of society, education, as well as politics, and view themselves as a unit entity of the world as a whole, rather than through individual nation identities. There are copious benefits ascribed to globalization as Rivoli intimates. Business is not merely a corporate firm eliciting particular goods and services, but a ventured initiative geared to accrue profit. If this business, for purposes of accruing more profit, is operating from a variety of world regions, it will experience pursuant globalization effects. Because of globalization in business, large and small organizations have to institutionalize diversity within their labor pool, necessitating individuals who can work within an array of cultures and tackle old problems using contemporary approaches. Diversity is flourishing as a key resource for success in business. Globalization has espoused diminutions enforced by states on cross-border exchanges, translating into a complex, integrated global production and trade system. Organizations continue to hire labor from cheaper markets, like the third world countries, with requisite skills. Businesses, therefore, function at global level and share information through communication technology with affiliate acquaintances at international level. In the context of globalization, individual nations do not set up divisive lines based on suspicion, ambition and mistrust, but work concordantly to augment business ventures and espouse their development efforts.
Business globalization functions to open up new markets all over the world, hence enabling the sale of products to numerous countries. A business is thus able to sell valuable products like food and medicine across different divides of an expansive market. Opening such markets enables multiple societies to accrue benefits from each respective product’s advancement. This, therefore, establishes a relationship between countries with lower developed production technology, and the companies with the capacity to avail valuable high-end products to the markets that need them. Such companies reassess the prices of their commodities for profitability, while availing the resources to the global society.
Globalization also espouses an environment characterized by international awareness, where companies can out rightly be held accountable for unethical practices in business within foreign countries. The outcome is an elevated consciousness as regards the need to adopt consistent business practices within different countries. With the continual expansion of business into other countries, new markets and job opportunities are set up in these countries. In addition to that, the business practices of companies end up being infused into the foreign countries of establishment. Such practices include fair treatment of employees, just business laws, and environmentally sound business practices. For example, in the event that a big American department store sets up a new establishment in India, they would relay a multiplicity of similar ideals and business practices adopted by the American store to the new store.
Many countries obtain labor for their markets from other countries, majorly owing to the difference in pricing of labor. Personnel in the third world countries have the requisite qualifications that different businesses in the developed countries seek, and are willing to offer these services at a much cheaper cost compared to the natives. Businesses, therefore, end up outsourcing such affordable labor in a bid to maximize their profit margins and the return from investment. Globalization leads to a steady cash-flow into the developing nations. In the long run, this steady flow ends up bridging the dollar difference, and consequently establishes a competitive position required for a strong market economy.
Wendell Berry would respond to Rivoli’s claims by citing the pitfalls ascribed to globalization. The basis for this argument would revolve around several claims. There is a consensus that transactions between business entities and consumers based on e-commerce pose a variety of challenges for authorities collecting tax within the organization linked to economic cooperation and development. Growth in purchases across the border via internet increases the difficulty of state and sub-state taxing organizations to amass revenue from some consumption as well as corporate tax sources. The vast digitalization of commerce potentially alters tax administration, undermining yields from tax within high-income countries. This consequently affects funding for healthcare and programs of income support. In Canada, taxing and spending powers are apportioned to three governmental orders: federal, provincial and local government. The dissention between these systems in the international trade concerns augments difficulty levels in amassing tax returns.
Foreign takeovers have been observed to convert Canada’s capital class into an emasculated business elite ill equipped in entrepreneurship. With the advent of American-based international corporations’ control of a large extent of the Canadian economy, the elite’s corporate nationals were altered into a dependent cluster group of branch managers. They administered transnational enterprise units’ devoid of resonance and development capacity. In addition, the transnationals’ tendency to serve the particular domestic and export accumulated profits to foreign parents placed Canadian capitalization on a regression course.
Many workers from developing countries are losing jobs. This poses them a problem attributed to the outsourcing of work to developing countries whose cost of labor is low, a fete that translates to considerable company problems. Unemployment levels among the nationals of developed countries proliferate, and tendencies of xenophobia are incremental because of the competitive job market. There is an immense pressure on Canada’s employed population who constantly grapple with threats of having their jobs outsourced.
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There is also an imminent pitfall of companies monopolizing world agendas, owing to copious monetary power allocations within their investments across the globe. This may thus function to influence pertinent decisions affecting scores of people to their own liking, and accord power imbalances. Nations at the receiving end also ultimately give up company reins for foreign organizations through acquisitions, which may lead to an intricate economic colonization for such nations.
I believe that Rivoli’s claim is the correct paradigm owing to a number of reasons. Globalization is a contemporary phenomenon that is crucial for the advancement of business and the transfer of commodities from one geographical location to another. There is a great attachment of the current business to trends in globalization, and these trends function to influence the business operations in different ways. Globalization enables different regions to gain access to the important commodities they lack by importing these items. It also transfers important business practices to different countries, and the newly adopted ethical business practice works to improve business functions where they are adopted. It also enables the acquisition of cheap labor from foreign counties, levels the strength of currencies between different regions and increases the level of production associated with a company. Countries have undergone a lot of technological advancement over the years. This has helped in sharing and dispensing of business information and technology. This attribute is advantageous for the advancement and progress of most developing countries at par with developing nations. Trading and transactions are conducted online and work to foster business transactions across borders. Informational influxes between countries accrue, particularly in countries with common accolades between them. Cultures intermingle on a prolific level, and individual countries try to become more privy to the cultural preferences of other nations. These countries, through trade relations developed via cultural connectivity, work towards abating pitfalls that affect the countries. Governments are putting up efforts to sort out ecological dilemmas for each other through the tenet of globalization.
Globalization has paved the way for free trade and business. It has augmented trans-national communication and changed the political environment in line with a paradigm shift to poverty, unemployment and power shifts. Marginal entities are accorded an opportunity of exhibition across the world market, and branding at international level is breaking ground. The communication revolution in business has promoted transnational trade ties.
Globalization also increases the market’s demand for products. This high demand attributed to an expansive market, leads to an increase in the production rates of businesses. Manufactures, thus, amass profit and recruit more employees to maintain the high production. As such, globalization creates job opportunities. There is an international market for businesses and customers are granted access to different countries’ products. Exporting contributes to growth in productivity by exposing different firms to best practice. Most exporters sell their products into multiple foreign markets. This exposes them to competition in these foreign market contexts, and enables them a measure of their commercial and technological placing against an extended range of competitors. They consequently improve their performance in line with international market dynamics.
Owing to the presence of the international market, there is pursuant increase within the production sector, accompanied by a myriad of options for different company investments. There is complex relationship between participation in export markets and productivity. Exporting augments productivity. Establishments that export their products exude higher productivity levels than those limiting their sales to domestic markets.
Globalization translates to a steady flow of cash into developing nations. This gradually works to decrease the dollar difference and creates a competitive position within the market economy. Such is the case of trading between Canada and Ukraine, which responds to a noticeable extent by augmenting monetary flows and strengthening the Ukrainian currency.
Moreover, globalization helps to increase the demand for products. This consequently increases production rate. Manufactures find this profitable and globalization in turn avails more jobs and uplifts wages. Exporting is associated with higher product demand curves, which in turn leads to higher productivity that is associated with higher wages. Internal labor markets in Canada are treated as independent variation compensation sources, dispersing the power and monopoly of trade unions. This works to extract monopoly rents in light of both higher pay and work conditions ascribed to congeniality.