Analysis of Economic Globalization
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Added on 2021-04-19
Analysis of Economic Globalization
Added on 2021-04-19
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Running head: ANALYSIS OF ECONOMIC GLOBALISATION ANALYSIS OF ECONOMIC GLOBALISATION Name of the Student Name of the University Author Note
ANALYSIS OF ECONOMIC GLOBALISATION1Economic globalization is mainly related to the two major dimensions of theglobalization concept which are, cultural globalization, political globalization. Economicglobalization can be defined as the process of the free movement of goods, services, capital,information and technology. This process is related to the increase in economic integrationand the interdependence of the national, local and the regional economies across the entireworld. The cross-border movement of goods, technologies, services and capital are related tothe globalization of economies all around the world. Globalization can also be defined as aset of the processes which is concerned with the multiple networks of political, cultural andeconomic interchange between the different countries or organizations (Bailey, Driffield andKaroglou 2017). Economic globalization mainly consists of the globalization of services like, finance,production, technology, institutions, organizational regimes, labour and corporations. Thisprocess of globalization has increased rapidly after the emergence of the trans-national trade.Globalization of economy has grown at an increasing rate due to the increase in thecommunication and the technological advances in the global organizations. The recent boomin the economic globalization has been hugely supported by the developed nations of theworld. Globalization has increased the economic growth and incomes in the developingcountries of the world. On the other hand, the consumer prices related to the developedcountries have also decreased in the process (Baylis, Smith and Owens 2017). Economic globalization has been hugely affected by the recent political turmoil andshocks in the recent times. Political instability is considered to be a serious issue related tothe economic performance of an organization. A situation of political instability is mainlyrelated to the short-term policies of macroeconomics. This can further lead to the frequentchange of policies and creates volatility in the market. Political instability can further lead toinflation in the economy and affect other macroeconomic variables including, growth of GDP
ANALYSIS OF ECONOMIC GLOBALISATION2and private investments. Economic development and political stability are related to eachother and in case of a global economy the effect of political stability is the highest. The waysby which political stability in the nations can affect the economic growth of a country areaffected by the relationship between the two factors (Bloom and Mizen 2017). The uncertainty that is related to the unstable political situation can reduce the speedof the economic development and the investment made in the particular area. An unstablepolitical environment is created only when the government is mismanaging and misusing theresources of the country. This means that the resources are not being used fully by thegovernment and the ways by which the economic development of the country can beincreased. The volatile political environment will deter the foreign trade, investors and theeconomic development of the country. The investment related areas can be linked to thepolitical stability and the economic growth of the country (Born et al. 2017). The analysis in this essay is based on the operational processes of two organizationsnamely, Sainsbury’s Group and McLaren’s Technology Group. These two companies havetheir origins in the United Kingdom and they operate in many different sectors. The globalorganizations have to face different issues related to the changes in the political conditionsand the effect of this on the economy. McLaren Racing Limited was founded in the year 1963 by Bruce McLaren and thecompany has expanded its operations globally in the next few years. This company is asubsidiary under the McLaren Technology Group which has other companies like theMcLaren Applied Technologies. The McLaren Group is mainly based in Woking Surrey,United Kingdom and the company was renamed as TAG McLaren Group as they haddeveloped ca partnership with the TAG Group. TAG McLaren Group was again renamed asMcLaren Group in the year 2003. The current name of the company is the McLaren
ANALYSIS OF ECONOMIC GLOBALISATION3Technology Group and the formula one company of McLaren Group is considered to behighest grossing among all the other companies (Mclaren.com. 2018). The structure that hasbeen implemented and followed in McLaren is hierarchical in nature. The culture of McLarenis mainly related to the value that is provided to the employees by the management of thecompany. The ways by which managers in the company interact with the employees helpsMcLaren to acquire the topmost position in the market. The employees of the company aremotivated with the help of rewards that are provided based on their performance. Thecompany also an incentive scheme for the employees who are able to achieve their targets.McLaren has its operations all over the world and the products are available in manycountries in the world including Europe and Asia. Sainsbury’s is an organization which operates in the supermarket industry and holdsthe second largest position in United Kingdom. The company holds around 16.9% of the totalshare of the supermarket sector in the United Kingdom. Sainsbury’s was founded by JohnJames Sainsbury in the year 1869. Sainsbury’s has many other companies operating under itsparent company which are, Sainsbury’s Bank, Sainsbury’s Supermarkets Ltd. andSainsbury’s Argos. The head office of the company is located in Holborn Circus, London(About.sainsburys.co.uk. 2018). The power culture is used in Sainsbury’s for the purpose ofmaking decisions that are related to the fulfilment of the aims and objectives of theorganization. The managers of the company are chosen based on their capabilities and theways by which they are fit for the job. The structure of the company is mainly based on thevarious physical stores and the online stores of Sainsbury’s all over the world. Sainsbury’suses staff rewards and incentive based activities for the purpose of motivating the employees.The company has physical operations in UK and the online stores operate in other countrieslike China and India. The communication process is based on the application various
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