Globalization; undoubtedly influences the economical, cultural,technological, and social environment of a country. But how good is it for a business to opt for this strategy? Is globalization a panacea for every business, or does it have its own limitations?


Globalization increases the interdependence, and connectivity of countries at a global level.It is positively asserted to enhance the economic prosperity and opportunity in the developing countries. It enables easier access to the markets in developed countries, improved productivity, and higher standard of living. There is also an other side of the coin depicting that it spurs inequality across, and within nations, financial volatility, and environmental deteriorations.


Globalization has reduced trade barriers between countries, and has increased connections among people all over the world. Developing countries are going through a process that rich countries experienced earlier; wide choice for consumers, and an assortment of better products in cheaper prices.



Advantages:

  • More free trade between the countries.
  • Globalization enables businesses to build a consistent band image in every region or nation the business chooses to market.
  • Investors from developed nations can invest in developing nations.
  • Cultural barriers are reduced, increasing a global village effect.
  • Democratic ideas of one country are spread to another.
  • Possibility of war among nations is controlled.


 


Issues of Globalization:


Textile and apparel industry is more labor intensive, and developing countries are often associated with the term sweatshop. Working conditions in these countries are below standards, with low wages, inadequate safety standards, and long working hours. Though there are regulations addressing human rights, and environmental issues, problems still subsist.

  • Developed nations would opt to have their manufacturing base in developing nations due to its cheap labor costs. This would affect the living of workers of developed countries.
  • Economic disruption of one nation is likely to affect another.
  • Some countries might attempt to take advantage of weak regulations of the developing nations, thereby affecting environmental integrity.
  • There is also an argument that consumption patterns are being imposed on populations around the world mirroring the rich countries. So the concept of globalization is manipulated, and imposed by rich countries.

Sometimes big global companies performance is a mark below small, locally focused ones. Understanding the constraints will aid in diminishing the impact. Having a happy balance between local adaption, and global scale, also becomes essential. Big businesses who confront that globalization would shape the business landscape also believe that there are minimum chances to mold its future.


Today globalization has gained much momentum, that it cannot be reversed. While adopting this strategy, policies of the countries should be analyzed in context to the global economy and the adopting country. Despite the differences among countries, each nation has to design its own strategy to handle the challenges of globalization.


References:


1)     Data source: economywatch.com

2)     Unido.org

3)      Mckinseyquarterly.com