The expanding significance of globalisation can be seen when you consider just how widely reaching certain effects of tariffs, quotas, embargoes and international competition on international business, Naturally these downsides are not going to help small businesses.[Piletic, P. (2019)]

 

During the 21^stCentury, there has been a profound change in the topography of economic, educational, social and political outlook. The current economy is composed of interactive forces that include globalisation, trade liberalization, and the information technology and communications revolution. “Globalisation has melted national borders, free trade has enhanced economic integration, and the information and communications revolution has made geography and time irrelevant. Furthermore, the new economy is built on a culture of innovation. Indeed, the signature mark of the new global economy is new ideas, new technologies, and new initiatives”.(Passaris, 2019)

 

 

 

Globalisation creates division of labour and entities involved benefit from economies of scale, one big example of companies benefiting from division of labour and economies of scale is that of the case of apple manufacturing in china to benefit from cheap labour cost. “China's workforce is much hungrier and more frugal than many of their counterparts in the United States”, Apple benefits from having a more efficient workforce technically and also in terms of cost. globalisation represents free trade which promotes global economic growth; creates jobs, makes companies more competitive because of international competition which in turn lead to lowers prices for consumers.

 

The progress of globalisation also means the progress of technology, poor countries with the fusion of foreign capital and technology can develop economically. There is now a worldwide market for companies and consumers who have access to products of different countries. 

 

According to CBS (2017), foreign owned multinationals created over 700,000 FTEs in direct jobs. This statement provides support to the advantage that globalisation creates jobs and improves the employment rate of a particular country where the multinational company is operating. (Statistics Netherlands, 2019)

 

 

While globalisation being at peak at this time of age its vision of open borders and free trade are still up for a debate, one can argue how far the concept of globalisation can go? The practical world still enforces trade barriers, limiting the amount of trade being done with the enforcing of tools such as quotas, tariff and special embargoes to maintain balance of trade. While globalisation opens free trade it also puts small businesses in jeopardy it reinstates the argument that it makes “the rich richer and the poor poorer” because it is wonderful for investor, shareholders, managers and anyone who has a stake in it but it is not viable for workers or the environment.

“In 2006, months before a Walmart store was opened in the Austin neighbourhood of Chicago's West side, researchers counted 306 businesses in the surrounding area. Two years after the Walmart opened, 82 of those businesses had closed.”(CityLab, 2019)

Businesses, particularly small businesses, would close after a large retailer moves into the neighbourhood is to be expected. But, as the researchers found, the pattern in the terms of Walmart was very typical. The closer a business was to a new Walmart store, the more likely it was to close.(CityLab, 2019)

 

Globalisation also affects our lifestyle. It has led to easy access to technology, communication, information and innovation. Apart from playing an important role in bringing people of the globe together, globalisation has brought economic prosperity by opening up vast channels of development. However, globalisation has also created some areas of concern, the most important among these is the impact that it has had on the environment.

 

The amount of fuel that is consumed in transporting these products and the heavy fuelled machinery has led to an increase in the pollution levels in the environment. It has also led to several other environmental concerns such as noise pollution and landscape degration. Transportation has also put a strain on the non-renewable sources of energy, such as gasoline.

 

 

 

Globalisation has dawned an era of openness, ease of trade and has melted borders around the globe, globalisation has directly resulted in improvements in technology, expansion of business worldwide and a wide variety of products, globalisation introduced large multinationals in the global markets thus creating a variety of jobs in the host country but while all these multinationals brought jobs into the country it also drove small businesses out of business and also coupled with the fact that globalisation also brings the evil of pollution along with it, the waste that productions of good produces and the fumes it creates has bad implications for the environment.

Although the concept of globalisation isn’t pure, but is a necessary step towards the advancement of societies and also an efficient allocation of resources which produces a socially optimum level of output. Globalisation is the way forward and the idea of full free trade should be implemented in order to fully utilise and gain from globalisation. 

905 WORDS

 

 

   During the 21st Century, there has been a profound change in the topography of economic, educational, social and political outlook. The global economy is composed of interactive forces that include globalisation, trade liberalisation, and the information technology and communications revolution. The first benefit of globalisation is, “Globalisation has melted national borders, free trade has enhanced economic integration, and the information and communications revolution have made geography and time irrelevant” (Passaris, 2006); Furthermore, the economy is constructed on a culture of innovation. “Indeed, the signature mark of the new global economy is new ideas, new technologies, and new initiatives” (Passaris, 2006). This means that globalisation has introduced new technology which has transformed the state of the world in a positive manner. New innovations improve the efficiency of businesses which help them expand their operations. It has led to easy access to technology, communication, information and innovation. Apart from playing an important role in bringing people of the globe together, globalisation has brought economic prosperity by opening up vast channels of development. 

 

  The second benefit of globalisation is that it leads to specialisation and entities involved benefit from economies of scale. One big example of companies benefiting from specialisation and economies of scale is that of the case of Apple manufacturing in China to benefit from cheap labour cost. According to Blodget (2012), “China's workforce is much hungrier and more frugal than many of their counterparts in the United States". Blodget (2012), further says that Apple benefits from having a more efficient workforce technically and also in terms of cost. Globalisation represents free trade which promotes global economic growth; creates jobs, makes companies more competitive because of international competition which in turn lead to lowers prices for consumers. The progress of globalisation also means the progress of technology, developing countries with the fusion of foreign capital and technology can develop economically (Blodget, 2012). There is now a worldwide market for companies and consumers who have access to products from different countries. According to CBS (2017), foreign-owned multinationals created over 700,000 FTEs direct jobs. This statement provides support to the advantage that globalisation creates jobs and improves the employment rate of a particular country where the multinational company is operating.

 

  While globalisation being at peak at this time of age its vision of open borders and free trade are still up for a debate, it can be argued how far the concept of globalisation can go. The first disadvantage of globalisation is that the practical world still enforces trade barriers, limiting the amount of trade being done with the enforcing of tools such as quotas, tariffs and special embargoes to maintain a balance of trade. (Collins, 2015) This means that it affects the macroeconomy of the world as many countries do not allow free trade. Another disadvantage is; according to Collins (2015), while globalisation opens free trade, it also puts small businesses in jeopardy. It reinstates the argument that it makes “the rich richer and the poor poorer” because it is wonderful anyone who has a stake in it, but it is not viable for workers or the environment. Berg (2012), supports this argument by saying that according to research, there were 306 businesses in a neighbourhood of Chicago. Two years later after a Wal-Mart opened in that area, eighty-two of the businesses had closed. Businesses, particularly small businesses, would close after a large retailer moves into the neighbourhood is to be expected. But, according to research, the pattern in terms of Wal-Mart was very typical. The closer a business was to a new Wal-Mart store, the more likely it was to close (Berg, 2012). According to Piletic (2019), the expanding significance of globalisation can be seen when considered just how widely reaching certain effects of tariffs, quotas, embargoes and international competition on international businesses. That is why naturally, downsides such as multinational corporations are not going to help small businesses live up to their potential and may have to close down.

 

  Another disadvantage of Globalisation is that it also affects lifestyle. Globalisation has also created some areas of concern, the most important among these is the impact that it has had on the environment. According to Pandita (2018), the amount of fuel that is used for transport and the heavy fuelled machinery has led to an increase in pollution. Pandita (2018), further says that it also leads to other environmental factors such as noise pollution and land pollution. Transportation has also put concern on the non-renewable sources of energy, such as gasoline. This means that although globalisation has played a big part in the advancement of technology, it has brought many issues that harm the environment. 

 

  To conclude, it can be said that globalisation has dawned an era of openness, ease of trade and has melted borders around the globe. It has also directly resulted in improvements in technology, expansion of business worldwide and a wide variety of products. The introduction of large multinationals in the global markets have created a variety of jobs in the host country but while all these MNCs have brought employment into a country, it also drove small companies to close down. Globalisation also causes pollution and along with it, the waste that productions of good produce and the fumes it creates has bad implications for the environment although these are problems that can be tackled and taken care of. Although the concept of globalisation isn’t pure, it is a necessary step towards the advancement of the world and also an efficient allocation of resources which produces a socially optimum level of supplies. It can also be acknowledged that globalisation is the way forward and the idea of full free trade around the globe should be implemented in order to fully utilise and gain from it.

 

 

 

 

 

 

 

 

 

1.   Berg, N. (2012). Radiating Death: How Walmart Displaces Nearby Small Businesses. [online] CityLab. Available at: https://www.citylab.com/life/2012/09/radiating-death-how-walmart-displaces-nearby-small-businesses/3272/ [Accessed 12th Feb 2019].

 

2.   Blodget, H. (2012). This Article Explains Why Apple Makes iPhones In China And Why The US Is Screwed. [online] Business Insider. Available at: https://www.businessinsider.com/you-simply-must-read-this-article-that-explains-why-apple-makes-iphones-in-china-and-why-the-us-is-screwed-2012-1?r=US&IR=T [Accessed 12 Feb. 2019].

 

3.   Collins, M. (2015). The Pros And Cons Of Globalization. [online] Forbes.com. Available at: https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#930d67ccce05 [Accessed 12th Feb. 2019]. (This bibliography majorly answers the question as it includes all the information required to answer about Globalisation from a business perspective)

 

4.   Forbes, S. (2011). Columbus: Father of Globalization. [online] Forbes.com. Available at: https://www.forbes.com/sites/steveforbes/2011/11/02/columbus-father-of-globalization/#328f56042f4b [Accessed 23rd Feb. 2019].

 

5.   Pandita, R. (2018). Facts About Globalization and its Alarming Impact on the Environment. [online] HelpSaveNature. Available at: https://helpsavenature.com/globalization-its-impact-on-environment [Accessed 15th Mar. 2019].

 

6.   Passaris, C. (2006). The Business of Globalization and the Globalization of Business. Journal of Comparative International Management, 9(1), pp.3-18.

 

7.   Piletic, P. (2019). How Globalization Impacts Small Businesses More Than You Might Think | CustomerThink. [online] Customerthink.com. Available at: http://customerthink.com/how-globalization-impacts-small-businesses-more-than-you-might-think/ [Accessed 12 Feb. 2018]. 

 

8.   Riley, J. (2019). Globalisation - Benefits and Drawbacks | tutor2u Business. [online] tutor2u. Available at: https://www.tutor2u.net/business/reference/globalisation-benefits-and-drawbacks [Accessed 12 Feb. 2019].

 

9.   Statistics Netherlands. (2017). Foreign companies create nearly 1.4 million jobs. [online] Available at: https://www.cbs.nl/en-gb/news/2017/50/foreign-companies-create-nearly-1-4-million-jobs [Accessed 12 Feb. 2019]. (this bibliography gives evidence and support to the argument of the advantages of globalisation.)