An Examination of the Impact of Globalisation on the Global Economy

This essay examines the multifaceted impacts of globalisation on global and local economies, defining it as a contemporary business development fostering business growth and international interaction. It highlights both the positive and negative consequences of globalisation, noting its role in elevat...Read More

The Impact of Globalisation - Positive or Negative?
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Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................4
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
Globalisation is the business concept or activity which emerged in the mid-1800. The concept
can be defined as a business process or a business trend which tends to increase the interaction
between people, business organisations, and government authorities on a world-wide scale. In
the context of business specifically, globalisation is the business procedure through which
corporates establish international influence to develop international and wider scales of business
operations. Globalisation came into action due to various forces and elements in the business
environment. The process of globalisation developed due to modifications and advancement in
the transportation and communication technology in the very basic form. Globalisation emerged
due to various other business factors such as availability of labour, freedom of trade and
business, enhanced labour skill and quality etc.
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Main Body
The business process gave birth to the terms of multinational corporations and international
business organisation. Multinational corporations are also known as MNC’s. These can be
defined as a business organisation carrying out its business process such as production in at least
more than one country part from its home country (McCann, 2016). Globalisation has provided
with various advancements and adverse impact on the global economy and the business
environment. The easy will discuss globalisation, its driving factors and the positive and negative
impact on the world economy.
Globalisation in the business environment is centred on the activities of business expansion and
growth of the business operations. Globalisation impacts the international trade regulations, taxes
and tariff duties, and factors that drive the changes in the global business and trade of economies.
It is the process which focuses on increasing the economic integration of the various countries
and economies. The process lays emphasis on the global interaction of the economies to execute
diverse scales of business operations. Globalisation is primarily an economic process which
depicts its impact on the cultural and social aspects of the economy. Globalisation can be divided
into three basic forms globalisation in the economy, globalisation in culture and globalisation in
politics.
The process of globalisation impacts as the growth and exchange of ideology and thinking in the
business processes. The in the economic and business context it refers to exchange of good and
services between the organisation operating in different parts of the globe. The process is also
functioned with exchange of economic resources, technology and capital. The development in
transportation technology in the terms of steamship, jet engines, container ships etc. enabled
globalisation (Coyle, 2016). The driving factors are also advancements in communication
technology. The advancement and development of internet technology and mobile phones also
fastened the pace of globalisation. These factors acted as driving forces for globalisation and
interdependence of the global economies. In the year 2000, the International Monetary Fund
identified various eminent aspects of globalisation which includes Trade and Transaction,
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Migrations and Movement of People, Transfer of Knowledge, and Capital and Investment
Movements.
(Source: Martin, et. al., 2018)
These aspects of globalisation represented the greater impact of the process on the global
economy. The IMF further recognised the adverse impact or challenges posed by the process in
the term of environmental challenges, global warming, cross-border water disputes, air pollution
etc. The process is a dual concept which is impacted and impacts the economies, natural
resources and social-cultural resources.
Globalisation possesses both positive and negative impact on the economies, organisations,
society and its members. The impacts provide with advancements and developments on one hand
and challenges and issues on the other. The further discussion will converse on the positive and
negative impact of globalisation.
The process of globalisation has provided with various benefits to the world economies. The
process has increased the standard of living and lifestyle cultural globally. The interaction
between various economies and countries has developed the influence of culture and values of
various societies empirically. Globalisation has also enhanced the economic development and
business operations. The Multinational Corporation bring innovative ideas and developed
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business processes along with their business scales. This has increased the quality of work and
life for the workforce and the human resources working in these organisations (Martin, et. al.,
2018). Globalisation has also supported the economies by increased employment and skilled
opportunities, the MNC’s accounts for increased employment and demands for human resources.
The specifications are for skilled and well equipped working force. The process of globalisation
has thus increased employability skills of the human resources. The employable generation is
now directed towards gaining increased knowledge and skills in order to be employed at these
MNC’s.
The concept of globalisation has also provided for enhanced wealth and investment in the
economies. Globalisation includes the interaction of various people and business organisation to
execute the expansion and growth plans for the business operations. The development and
expansion of these business ideas result in heavy foreign direct investments and fixed
investments for the local economies (Potrafke, 2015). The increased foreign direct investment
enables the government and the legal authorities to expand their operations in the development of
the local economy and the development of its members. Globalisation thus results in increased
wealth accumulation in the terms of heavy fixed investments and revenue generating business
diversifications.
Globalisation has also supported the world economies with increased development and
advancements in the terms of technology and infrastructure of the economies. The major driving
force in the process of globalisation is an advancement in transportation and communication
technology. Globalisation has further developed these driving factors. Today the world economy
is more technologically driven (Bianchi and Civelli, 2015). The process of globalisation provides
with increased interactions in numerous parts of the globe within microseconds. It has supported
for development in the communication technology, the economies now function with the
advancements such as internet technology, information technology, mobile phones, tablets etc.
This has made it easy for the multinational organisations to communicate and educate the local
and home economies effectively.
This developed and contemporary business process of globalisation has also made the globe a
smaller place. The development of transportation technology has made the reach to various parts
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easy and accessible. The development of transportation technology has made it easy to transfer
the goods and services in various parts of the globe. The development of internet technology has
also affiliated the international business transaction. The payments modes are available online
and the delivery is made easily in faraway locations (Vlasov, 2017).
(Source: Vlasov, 2017)
In the terms of the consumer market, globalisation has supported the developed consumer
market. The consumers are provided numerous options available for a single desired product.
Globalisation has integrated the local and global organisation in the competition to furnish the
demands and requirements of the consumers. The consumer avail developed and enhanced
quality of goods and services at competitive prices. This contemporary concept has also
established effective markets (Liang, et. al., 2015). There is an equilibrium in the market in terms
of what the consumers are willing to pay for the goods and services and what the sellers are
expecting from the proceeds. Globalisation has also increased the scales of economies and
business operations for the local communities and local economies. The process brings along
various developed technologies and processes for the local economies and business
organisations. The development of these technologies benefits the local communities. The local
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businesses applied these foreign techniques and tool in their business processes and are provided
with increased scales of economies.
While there is ample evidence supporting the positive and developmental aspect of globalisation
and its benefits to the global economies, this business concept has also depicted its adverse and
negative impact on the global economies. These negative impacts include environmental
challenges, depletion of natural resources, degradation of the resources, inclination towards
richer economies, disparities of income distribution etc. The most alarming and rapidly growing
adverse impacts are the environmental challenges. These include the global warming, depletion
of resources etc. due to increased global trade and operations of business the resources are being
consumed up at an increased rate. The local and global business organisation competes to deploy
the natural resources into the business operations (Adesina, 2012). The sources are limited and
their requirements in various processes are unlimited. The process has also brought in the
challenge of global warming and increased pollution levels. Global warming is on an all-time
high with the explicit results and outcomes. The increased business operations and
industrialisation have concluded towards greater emission of pollutants and discarded substances
in the natural habitats and resources. The continuous emission has depleted the air quality, water
quality and the natural resources. This has resulted in rapid depletion and degradation of the
natural resources and substances by the global and local economies.
The process and business activities involved in globalisation have also created disparities of
income and wealth distribution. The developmental and advancement activities and programs
initiated by this concept are centric towards the favoured section of the society and richer
economies around the globe. The multinationals and corporations are only interested in investing
their financial resources in the economies they foresee future growth at a rapid rate
(WorldBank.Org, 2012). The MNC’s favours the privileged section of the society such as big
business houses and brands operating business activities on a large scale. These favouring
activities and thinking of the multinational creates disparities of income and wealth distribution.
The richer sections keep getting rich and the poor section poorer with disparities of investment
and income.
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Globalisation involves functioning of various business corporates and organisation working in
sections of the economy that supplies with cheaper resources and investment opportunities.
Globalisation focuses on procuring resources at cheaper rates and exploits the underdeveloped
economies. For example, in India, the labour rates are comparatively low and it is easily
available. In this direction most MNC’s process their outsourcing requirements at cheaper labour
costs and investments (UNCTAD, 2012). This results in exploitation of the human resources on
daily basis. These labours are cheaper whether skilled or unskilled in these developing
economies and the large-scale business organisations engage into activities deploying these
human resources at cheaper rates reducing their operational costs, on the other increases the
revenue generations and profitability for the organisations.
Globalisation is to blame for the increased competition and unemployment rates in the global
economies. Globalisation has established competitive marketing forces and organisations in the
economies and resulted in increased competition. The developed economies like China produce
goods and services at cheaper and lower costs due to cheaper resources and processes. The
developing economies are forced to provide with lower costs of the products and services even
when deploying heavy investments and expenditures incurred (Daniels, 2012). These increased
cost and lowered revenues are the results of the increased competition. The developing
economies are forced to do so in order to maintain their consumer base and market share in the
global business environment. This increased competition has given birth to conditions like
increased unemployment and disguised unemployment in the developing and underdeveloped
economies.
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(Source: McCann, 2016)
Conclusion
The essay has demonstrated an understanding of the concepts of globalisation and its implication
positive and negative on the global and local economies. The essay summaries and identified
globalisation as a contemporary business development which focuses on the integration of global
economies to foster business growth and devolvement. This process includes the increased
interaction of people and processes. The notation lays greater emphasis on the interaction of the
business organisation with the international resources to foster the growth and development. The
discussion above has included the positive and negative impact of the contemporary
development. It has been observed that globalisation has acted as a multiplier for the global
economies. It has increased the levels and standards of living and lifestyle culture for various
countries. The process of globalisation has also increased the working efficiency and
effectiveness of business organisation with the development of technologies and various tools.
Another aspect of this development indicates the adverse implication such as environmental
issues, increase competition, unemployment etc. Thus it can be stated that globalisation is an
inevitable aspect of world economies but it requires entailing the concepts of sustainability
within its orbit to demonstrate the effective and enriched development of the world as a single
economy.
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References
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Journal of Humanities and Social Science, 2(15), pp.193-201.
 Bianchi, F. and Civelli, A., 2015. Globalization and Inflation: Evidence from a time-
varying VAR. Review of Economic Dynamics, 18(2), pp.406-433.
 Coyle, D., 2016. Brexit and globalisation. Brexit Beckons: Thinking ahead by leading
economists, pp.23-39.
 Daniels, J.A., 2012. When Globalization is not good for Less Developed/Developing
Countries.
 Glavina, S., 2015. Influence of Globalization on the Regional Capital Markets and
Consequences; Evidence from Warsaw Stock Exchange. European Research
Studies, 18(2), p.117.
 Liang, H., Ren, B. and Sun, S.L., 2015. An anatomy of state control in the
globalization of state-owned enterprises. Journal of International Business
Studies, 46(2), pp.223-240.
 Martin, R., Tyler, P., Storper, M., Evenhuis, E. and Glasmeier, A., 2018.
Globalisation at a critical conjuncture?. Cambridge Journal of Regions, Economy
and Society.
 McCann, P., 2016. The UK regional–national economic problem: Geography,
globalisation and governance. Routledge.
 Potrafke, N., 2015. The evidence on globalisation. The World Economy, 38(3),
pp.509-552.
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 UNCTA, 2012. Development and globalisation facts and figures. [Online].
UNCTAD. Available at:
http://unctad.org/en/PublicationsLibrary/webgdsdsi2012d2_en.pdf. [Accessed:
10.03.2018].
 Vlasov, A., 2017. The evolution of e-money. European Research Studies
Journal, 20(1), pp.215-224.
 WorldBank.Org, 2012. Globalization’s impact on gender equality: What’s happened
and what’s needed. [Online]. WorldBank.Org. Available at:
http://siteresources.worldbank.org/INTWDR2012/Resources/7778105-
1299699968583/7786210-1315936222006/chapter-6.pdf. [Accessed: 10.03.2018].
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