The report will be dealing with the latest trend in the global business environment globalization and the impact of it within the industry. The relevant theories and evidence will be discussed in the report to elaborate on the characteristics of globalization and how it functions throughout the world. The positive and negative impacts of globalization also will be illustrated further. The finding of the report indicates that globalization support to increase country’s economy.
Table of content:
Characteristics of globalization:
How globalization functions:
Theories of globalization:
The report is based on the trends in the global business environment. The trend of globalization will be discussed in report. The characteristic of globalization has been discussed. In addition, how the globalization functions on the economy and has become a trend current business environment have been discussed in the report.
Globalization is the procedure of making foreign relationships with companies, people and governments throughout the world (Michie 2019). Due to the advancement of communication technology and transportation the growth of globalization in business has been observed. Growing interactions and integrations help the growth of trade, ideas and culture all over the country. Goods, services, data, technology and the economic resources of the capital are the things involved with the globalization. Through the exchange of goods and funds, the spreading out of the markets has occurred internationally. According to Ronald Labonte (2015), from the globalization, the description of interconnections between the people, nations and economies can be found. These have become more and more interconnected and mutually dependent (Labonte 2015). Moreover, due to globalization the knowledge regarding health also has been developed and low-cost health technologies have also been expanded. In the research, the author has made an outline of health risks by economic development of the era of 1990s and 2000s along with high-level public policy discussion from which assurance can be found that globalization would provide ‘health for all’ (Labonte 2015).
Major characteristics of globalization are:
1. It plays a significant role in making the trade of goods and facilities among the nations and regions.
2. Helps in the development of the international brand by which various countries with lower and higher income are served.
3. Foreign direct investment helps in the rise of the transfer of capital. From the research of Iamsiraroj (2016), it has been observed that the foreign direct investment effects on economic growth nexus. According to the author, from the findings, a long-standing debate has been found between the growth of the economy and the foreign direct investment. An investigation has been made by the author by collecting 124 data from the countries about the foreign direct investment association from 1971 to 2010 (Iamsiraroj 2016). The results states that the growth of the economy is directly connected to the impacts of FDI. However, other major determinants of FDI are trade openness, economic freedom and labour force.
4. Labour migration among the countries makes the supply chain international.
5. By globalization, the balance of power has been shifted from the developed countries to the developing countries.
According to Stiglitz (2017), globalization was oversold. Based on the creation of job an argument has observed between some economists and politicians the author has researched the overselling of globalization. According to the author, an overestimation has been made about the GDP growth and an underestimation has been made about the costs and adverse distributional impacts (Stiglitz 2017). The author has discussed the failure of globalization and the impact that a country has to face. The author has illustrated some policies by following which the economy and politics can be returned in a better way.
Globalization provides some benefits to the economy of a country and helps in the growth of the economy. Foreign direct investment facility of globalization provides boost the restructuring of the industries, and global development of the international companies. Moreover, by globalization, the stimulation has been found regarding technological innovations (Iamsiraroj 2016). Large companies have realized the economies of scale and the costs of the products have been reduced. This leads towards the economic growth of a country as many more people could purchase those products. From the research of Martin Baumers (2016), the cost of additive manufacturing has been discussed by the association of the economies of scale, machine productivity and the technology push. In the study, the author has discussed additive manufacturing system for finding the effects of manufacturing sectors. In the paper, an inter-process comparison regarding the performance of cost has been found (Baumers et al. 2016). According to the results, it has been found that economies of scale are a reality in AM.
All the theories of globalization are categorized into eight forms:
1. Theory of Liberalism: According to the belief of this theory, by working together states can increase the prosperity and reduce the conflict. It is a theory of international relation. From the research of Jaquette (2018), liberalism, feminism, and the global economy of liberal feminism have been found. In the study, the author has described the effect of political mobilization of women concerning the experience in the US on the content of liberalism. In the research, an illustration has been found of the feminist critics associated with liberalism (Jaquette 2018). Result states, the requirement of defending the liberal democratic morals must be recognized by the feminists in the time of growing authoritarianism and populism.
2. Theory of Political Realism: From this theory an explanation has been found about international politics. The constraints of it are emphasized in this. The constraints are considered as the reason of the egoistic nature of humankind and deficiency of central authority (Jaquette 2018).
3. Theory of Marxism: From this theory the nature and trends of the globalization of the economy has been found. The countries and nations which are underdeveloped based on their initiatives join the historical progression so that they can lead towards the modernization.
4. Theory of Constructivism: This theory is based on scientific study and the observations that show how people learn and construct their concepts and knowledge about the world by experiencing.
5. Theory of Postmodernism: The theory has the inspiration for changing the modern functions and policies by developing them more.
6. Theory of Feminism: According to this theory, gender oppression could bring systematic shortcomings in the global context (Jaquette 2018).
7. Theory of Trans-formationalism: This theory considers the globalization as a complex procedure that is engaged with various two-way interactions happened between local cultures and the global institutions.
8. Theory of Eclecticism: The concept of this theory is not to hold onto a single pattern and assumptions rigidly, but take multiple theories, concepts or ideas for gaining balancing viewpoints on a subject.
From the research of Haffoudhi (2020), the threshold effect of globalization on democracy has been found (Haffoudhi 2020). A contradictory prospect about the impacts of globalization on the democratic system has been found in the paper. The effect of globalization has been found regime specific on democracy. With the early demographic evolution regime, the effect of globalization has found positive. However, with a late demographic regime the effect is negative. Moreover, from the research of Cohen (2019), the impact of globalization on the development of Israel advanced changes has been found. The author has collected data from the NII and central bureau of statistics of Israel to analyze the social and economic alterations and socioeconomic impacts of these changes in the era of 1990 (Cohen 2019). As a result, a decrease in a traditional industry and growing unemployment has been found. On the other hand, from the research of Kriesler (2016), the macroeconomic effects of globalizations have been found. According to the authors, due to globalization, various substantial alterations have been observed in the economies of many countries (Kriesler 2016).
With the help of Keynesian/Kaleckian framework, some implications of globalization on the macroeconomy has been analyzed. The examination of the output and national economic growth of the genera implications of globalization has been performed and found that governments have the ability for impacting the macro-economy through traditional policies. Moreover, from the research of Livock (2019), a critical realist analysis has been found on how Australia has been significantly affected by globalization. An explanatory analysis has been done by the authors to get some ideologies. Economical effect of globalization was the inequality of wealth in Australia and social effect was the growing push for protectionism in the country has observed (Livock, 2019). Divisiveness has been occurred due to these occurrences in Australia. On the other hand, from the research of Wu et al.(2017), a review of economic growth, globalization, urbanization has been found in the context of China. According to the authors, these interrelated trends of the world can increase the risks of the disease of the animals. Globalization helps in the growth of the economy of the countries thus growth in the income (Wu et al. 2017). Growth in income increase the consumption of animal protein and livestock production land also increases and make the probability of zoonotic high. Urbanization also emerges this disease with connectedness among people.
In the report, the effects of globalization on the countries have been illustrated by discussing the characteristics and the theories associated with it. From the whole research, it has been found that globalization develops growth in the economies in all over the world by expanding the businesses, trades, exchange of goods and services,
technologies, health benefits, etc. However, some negative effects also have observed in some countries for failure of globalization such as wealth inequalities and unemployment.
Baumers, M., Dickens, P., Tuck, C. and Hague, R., 2016. The cost of additive manufacturing: machine productivity, economies of scale and technology-push. Technological forecasting and social change, 102, pp.193-201.
Cohen, E., 2019. The Impact of Globalization on the Development of Israel Advanced Changes. International Journal of Law and Political Sciences, 13(5), pp.592-596.
Haffoudhi, H. and Bellakhal, R., 2020. Threshold Effect of Globalization on Democracy: The Role of Demography. Journal of the Knowledge Economy, pp.1-18.
Iamsiraroj, S., 2016. The foreign direct investment–economic growth nexus. International Review of Economics & Finance, 42, pp.116-133.
Jaquette, J.S., 2018. Liberalism, feminism and the global political economy of liberal feminism. In Handbook on the International Political Economy of Gender. Edward Elgar Publishing.
Kriesler, P. and Nevile, J.W., 2016. Macroeconomic impacts of globalization. In Post-Keynesian Essays from Down Under Volume II: Essays on Policy and Applied Economics (pp. 32-47). Palgrave Macmillan, London.
Labonte, R., 2015. Globalization and health. International Encyclopedia of the Social & Behavioral Sciences, p.198.
Livock, C. and Richmond, Y., 2019. How has Australia significantly been affected by globalization? A critical realist explanatory analysis. Journal of Critical Realism, 18(3), pp.303-313.
Michie, J. ed., 2019. The handbook of globalisation. Edward Elgar Publishing.
Stiglitz, J.E., 2017. The overselling of globalization. Business Economics, 52(3), pp.129-137.
Wu, T., Perrings, C., Kinzig, A., Collins, J.P., Minteer, B.A. and Daszak, P., 2017. Economic growth, urbanization, globalization, and the risks of emerging infectious diseases in China: a review. Ambio, 46(1), pp.18-29.
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