Negative Effects of Global Capitalism on Small Countries and Organizations

This essay discusses the negative effects of global capitalism on small countries and organizations. It covers examples of exploitation and environmental issues faced by countries due to outsourcing of production facilities by global organizations.

Running head: GLOBALISATION
GLOBALISATION
Name of the Student
Name of the University
Author Note

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Introduction
Global capitalism is mainly based on the new stage which is related to the proper
evolution of the capitalism based activities of the countries. This process is mainly based on
rise of the transnational capitalist type of class and transnational capital as well. Neo-
liberalism is on the defined as the laissez-faire style of economic liberalism based process.
The process mainly includes different factors like, austerity, privatization and the free trade
based policies. These factors have been able to increase of different manufacturing and
production based activities of the global organizations (Krugman 2017).
The different global organizations have thereby started outsourcing the production
based activities to the developing countries in order to reduce their costs in an effective
manner. The essay will be based on the negative effects of these activities of the
organizations on different countries.
Effect of global capitalism on small group of organizations and countries
The global capitalism has been able to affect the different countries all over the world.
The activities have been able to facilitate the global organizations which operate in the
developed countries like USA. On the other hand, the countries like India and China have
faced huge issues based on the production based facilities that have been set up in the
developing countries. The transnational or the global organizations are able to provide huge
levels of benefits to the developed countries (Potrafke 2015).
These organizations have outsourced their production based facilities in order to
reduce the costs based on the production related activities. These activities have benefitted
the organizations in a positive manner. However, the small countries have been affected in an
adverse manner due to the environmental or the exploitative nature issues. The use of cheap

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labour by these organizations is an important issue which has been faced by the countries.
The major issues were thereby based on the exploitation based activities which have been
performed by the organizations in different countries (Orbie 2016).
For example – Nike has acquired the position of one of the largest organizations in
the world based on the production of sports based products. The company had faced major
issues in the year 1990 based on the usage of child labour and sweatshop based issues. The
pressure levels had started increasing till the year 1998. The cofounder of the organization
had thereby made a promise to change the policies and the practices of the company. The
main issue was based on the usage of child labour in the Nike factory which operates in
Hansae, Vietnam. The labours who are a part of the factory have suffered issues like verbal
abuse and wage theft. The company was further accused of cutting the jobs at the factory
(Forbes.com. 2018).
On the other hand, major issues have been faced by Apple Inc. in the factories which
have been established in China. The cost based on labour accounts for around 5% of the total
costs which are required for the development of iPhone. The major issues which have been
faced by Apple in China are based on the bad reputation which was gained by the company
due to the fire related incidents that had taken place at Foxconn factory. The pay of the
workers was further raised due to the issues that were faced by the company in its factories.
The working hours of the workers were quite high and the pay was quite less as well
(Qz.com. 2018).
Primark Fashion which is a huge fashion based retailer in the United Kingdom faced
some major issues based on the ways by which child labour was used in its factories in India.
This was a major issue based on the exploitation of cheap labour and child labour for lower
costs in order to increase the revenues of the company. The company had however taken

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major steps within less amounts of time. The refugee camps which were set in the factory
based areas of the country were filled with child workers. The steps which were however
taken by the company had been able to affect the reputation of Primark Fashions in an
effective manner (McDougall 2018).
Conclusion
The examples of the three organizations which have been taken into consideration in
the essay have been able to depict that the ways by which the globalisation has been able to
affect the small countries in an adverse manner. The exploitation based issues which have
been faced by the organizations due to global capitalism have also been able to depict the
negative side of transnational corporations.

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References
Forbes.com. 2018. Retrieved from https://www.forbes.com/sites/petercohan/2012/03/04/five-
biggest-challenges-for-apple-in-china/
Krugman, P., 2017. Crises: The price of globalisation?. In Economics of Globalisation (pp.
31-50). Routledge.
McDougall, D. 2018. The hidden face of Primark fashion. Retrieved from
https://www.theguardian.com/world/2008/jun/22/india.humanrights
Orbie, J., 2016. The European Union’s role in world trade: harnessing globalisation?.
In Europe's Global Role (pp. 51-82). Routledge.
Potrafke, N., 2015. The evidence on globalisation. The World Economy, 38(3), pp.509-552.
Qz.com. 2018. Nike is facing a new wave of anti-sweatshop protests. Retrieved from
https://qz.com/1042298/nike-is-facing-a-new-wave-of-anti-sweatshop-protests/