The unequal distribution of natural resources

Running Head: GLOBALIZATION & ITS IMPACT 1
Globalization AND ITS IMPACTS

GLOBALIZATION & ITS IMPACT 2
Introduction
The unequal distribution of natural resources has led to some countries having an abundant
supply of resources while the other economy may have a crisis of the same. All the
economies of the world are not self-sufficient to produce all the goods and services by
themselves. Hence trade among economies was facilitated centuries ago. This fostered
globalization in the world helping the poverty-ridden nations to develop. On the other side,
globalization had many adverse effects on the underdeveloped and developing economies as
they were exploited by the developed nations. Thus, this essay examines the impact of
globalization on developing and underdeveloped economies.
Globalization and Its Impacts
Globalizations are defined as a process that aims to expand in international markets
facilitated by developments in global communications, socioeconomic, political,
environmental and technological advancements. Globalizations aims at providing a superior
competitive advantage with low costs of operations. This was achieved through
diversification of resources and development of investment opportunities. Thus, through
foreign direct investments, the developed nations entered many underdeveloped and
developing nations and accessed the local markets for business purposes. The developed
nations had the technical knowledge, expertise, and capital through which they take
advantage of the untapped markets. The impact of globalization can be mainly understood
from evaluating the economic consequences that it generates.

GLOBALIZATION & ITS IMPACT 3
Economic Impacts
Globalization compelled many organizations in adapting strategies that balanced the
interests of both the individual, society and that of the corporation. Global companies started
setting up their business functional units that provided significant advantages in countries.
While globalizing, corporations majorly viewed the benefits arising from economies of scale
and low costs of operations. This helped the domestic business units to compete worldwide
by accepting the participation of government and workforce in the developing and the
underdeveloped nations. The companies reduced their risk by means of diversification by
involving the financial institutions to partner with domestic and international business. The
foreign company reorganized the national and subnational organizations with production
techniques, international trade, and integration of financial markets. Furthermore,
transformation in the production and manufacturing impacted the microeconomic phenomena
like the class structure, labor skills, technical know-how of the host country, bringing about
substantial economic benefits. Not only globalization impacted at the organizational level,
but it benefitted society as a whole by creating job opportunities and it impacted the
developing or under-developed country's economic structure. It was also possible to
reorganize the capital structure of the economy as a whole (Brenner, 2017 ). For developed
countries, corporations that were internationalizing, there were benefits associated with cost-
cutting, access to resources and also benefitting from economies of scale. For example, Apple
setting up its manufacturing iPhone unit in China. The benefits accrued to China, with the
creation of multiple job opportunities and expansion of its economy, while in the developed
country many people lost their jobs. However, there was tremendous revenue generation for
Apple company. Thus, it could be said that the microeconomic structure in the developing
and underdeveloped nations changed due to deregulation, globalized financial markets, and
advanced technology.