Answer: Globalization is a process where
businesses are dealt in markets around the world, apart from the local and
national markets. According to business terminologies, globalization is defined
as ‘the worldwide trend of businesses expanding beyond their domestic
boundaries’. It is advantageous for the economy of countries because it
promotes prosperity in the countries that embrace globalization.
Benefits of globalization
The merits and demerits of globalization are highly
debatable. While globalization creates employment
opportunities in the host
countries, it also exploits labour at a very low cost compared to the home
country. Let us consider the benefits and ill-effects of globalization. Some of
the benefits of globalization are as follows:
·
Promotes foreign
trade and liberalization of economies.
·
Increases the
living standards of people in several developing countries through capital
investments in developing countries by developed countries.
·
Benefits
customers as companies outsource to low wage countries. Outsourcing helps the
companies to be competitive by keeping the cost low, with increased
productivity.
·
Promotes better
education and jobs.
·
Leads to free
flow of information and wide acceptance of foreign products, ideas, ethics,
best practices, and culture.
·
Provides better
quality of products, customer services, and standardised delivery models across
countries.
·
Gives better
access to finance for corporate and sovereign borrowers.
·
Increases
business travel, which in turn leads to a flourishing travel and hospitality
industry across the world.
·
Increases sales
as the availability of cutting edge technologies and production techniques
decrease the cost of production.
·
Provides several
platforms for international dispute resolutions in business, which facilitates
international trade.
Some of the ill-effects of globalization are as
follows:
·
Leads to
exploitation of labour in several cases.
·
Causes
unemployment in the developed countries due to outsourcing.
·
Leads to the
misuse of IPR, copyrights and so on due to the easy availability of technology,
digital communication, travel and so on.
·
Influences political decisions in foreign
countries. The MNCs increasingly use their economical powers to influence
political decisions.
·
Causes ecological damage as the companies
set up polluting production plants in countries with limited or no regulations
on pollution.
·
Harms the local businesses of a country
due to dumping of cheaper foreign goods.
·
Leads to adverse health issues due to rapid
expansion of fast food chains and increased consumption of junk food.
Causes
destruction of ethnicity and culture of several regions worldwide in favour of
more accepted western culture.
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