GLOBAL BUSNINESS ENVIRONMENT

Topic:

GLOBALIZATION
Submitted to:

SIR ADAM
Submitted by:

MOAAZ MUNIR
Roll Number:

BBA-FAL10-171
Submission date:

17/04/2014

Table of contents:

Introduction

03

Tools and elements of globalization

04

Aspects of globalization

05

Pros and cons of globalization

06

Conclusion

07

Introduction:
Globalization is basically an irreversible concept and it not only affects us as a citizen but also as a producer or consumer in the global economy. The proper meaning of globalization is a debatable issue. The meaning of globalization can be different to different people and different disciplines. Before exploring the concept, one should know the basic concept of globalization. Many different definitions and interpretations of globalization have been presented by various people. Globalization refers to all those processes by which the people of the world are incorporated into a single global society (Albrow, 1990). It can be defined as a material set of practices drawn from the world of business combined with a liberal market ideology (Newson, 1998). It is also political, technical and cultural, as well as economic. It is new' and revolutionary' and is mainly due to the massive increase in financial foreign exchange transactions. This has been facilitated by dramatic improvement in communications technology, especially electronic interchange facilitated by personal computers (Giddens, 1999). In its simplest sense globalization refers to the widening, deepening and speeding up of global interconnectedness (Held, 1999). From the above mentioned definitions, it can be assumed that globalization is the mutual sharing of goods, services and capital between or among states. It is also gradually making states closer and integrated. There are different theories about the beginning of the concept of globalization. Globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has various dimensions: economic, political, security, environmental, health, social, cultural, and others. There are different theories about the beginning of the concept of globalization. Some are of the view that it started from the mid of 20th century. Others are of the view that this concept was properly started with the establishment of world trade organization in 1995. Regardless of the beginning, it is true that the pace of globalization was accelerated with World trading Organization. The main purpose and agenda of this organization was to end border and fasten the trade between the states. The increasing amount of cross-border trade in goods and services, the increasing volume of international financial flows, and increasing flows of labor are due to globalization. Economic globalization thrived in the period before 1914, but was set back by the two world wars and the great depression. The international financial order that was established at the end of World War 2 sought to restore the volume of world trade, by 1973 the world trade as a percentage of the world GDP was back to its 1913 level and it has continued to grow almost every year since (Williamson, 2002). During the 1970s the word globalization was never mentioned in the pages of the New York Times. In the 1980s the word appeared less than once a week, in the first half of the 1990s less than twice a week and in the latter half of the decade no more than three times a week. In 2000 there were 514 stories in the paper regarding globalization and in 2002 there were 393 references. Based on stories in the New York Times, the idea of being anti-globalization was not one that existed before about 1999. Turning from the newspaper to the internet, globalization now brings up 1.6m links through the use of the Google search engine, and typing in anti-globalization brings up 80,000 links. Typing in globalization brings almost 500,000 references, 700,000 references to globalization and environment, almost 200,000 links to globalization and labor standards, 50,000 references to globalization and multinationals and 70,000 references to globalization and cultural diversity.

Tools and elements of globalization:

The elements of globalization include free movement of goods and services, flow of capital, movement of labor and the transfer of technology which has brought the developed economies closer together and made them more strongly integrated. Apart from the economic benefits, globalization also indicates the flow of ideas, norms, information and people. The technological elements matter in practice. There are basically two schools of thoughts about globalization. First are of the view that globalization is a blessing. It is the tool of peace and prosperity. It is the harbinger of progress and prosperity. It is indispensible process in the modern contemporary world. Others are of the view that globalization is a tool of frustration. It is solely in the benefit of rich and progress and progressive. But due to the emergence of world trade organization and end of cold war this concept evolved. The third tool of globalization is telecommunication. In the old days, leaders took six months to meet the counter part or a sovereign of another state, now communication means have made it so easy that an ordinary human can talk to a person who is sitting hundreds and thousands miles away on a very cheap expense. They are always interconnected. Physical distances have been made irrelevant through these communication means. For example face book, one can share his ideas and in no time he will get the feedback from friends or people who are going to be affected by his idea. It is a quick way to engage into trade. Furthermore, it is also helping people to get involved in political discourses. The people of today are well aware of their governmental policies. Electronic media is another tool of globalization. It is squeezing the world into one whole. Incident happening in one part of the world can be seen in other parts of the globe through it very quickly. It is the strongest mean of knowing and believing whats happening. It is also a tool of propaganda. In the modern world, people and states use it for their own self interest and secure support of others in their conduct. We have a recent example of Iraq war. Media played an important role in this particular war. The U.S Government propagated on media that Saddam has nuclear weapons which is the biggest threat to America itself and the whole world. Despite of the fact that 152 countries opposed it in United Nations, America attacked on Iraq under the article of self defense of the United Nations. Then again it is also important to note that it was the same media who reported that there were no nuclear weapons found in Iraq. So it has performed both the roles. Another important tool of globalization is the internet. It is the internet which quickly and really summarized the world into a small box. Whatever we need, whatever we wish for, we can have it through internet. There are 200 million people who are using computer in their daily lives and 95% of them are using personal computer. One out of every 12 is using internet. It is due to this tool of globalization that one can have access to all the things he wanted through s single click. So internet is very important tool of globalization. Different means of transportation are also important tools of globalization. They are a blessing for everyone in this modern contemporary world as they help in movement of goods, services and capital from one place to another. It really, enables the modern man to tackle the problems efficiently. The voyages which were of months now are summarized to hours. Aero plane has made it possible to travel from one corner of the world to the other in hours. Means of transportation are

really helping people in development and progress. Trade between sates has become the hall mark of globalization.

Aspects of globalization:
The economical globalization is of utmost importance. World trading Organization was formed in 1955. The main agenda of W.T.O. was to make border irrelevant. The second main concern of this organization was to promote free movement of goods, services and capital. Another point of its concern is the free movement of labor through elimination of trade barriers which include tariffs, quotas and sub subsidies. State welfare and development are interrelated very closely and W.T.O. paved the way for trade instead of aid. There are some other institutions like I.M.F who are playing a pivotal role for globalization. These international organizations give debts to the needy countries for their betterment and prosperity. Financial globalization is also a huge aspect. It is the first layer of mutual borrowing. Every country of the world is in some ways borrower and lender in the other way. This phenomenon creates the relationship of mutual borrowing among the states e.g. U.S.A and China. It is a fact that United States of America is the largest borrower of China. Wherever we are in the world and whatever we want to buy, we shall see two price tags on that particular thing. One will be in local currency and the other will be in Dollars. All the international treaties are signed under this currency. Cultural globalization is also a highlighting level of globalization. Every area of the world has its own cultural values. Through the tools of globalization e.g. media, internet, the cultural globalization is also on the rise in the modern world. McDonalds, KFC and Pizza hut are not the parts of our culture. Foods, fads and clothing patterns are parts of all cultures. Another important aspect of globalization is global migration. The global organizations promote free movement of labor and free movement of people across the borders. People migrate from one place to another in search of food, shelter or better life style. In ancient times, there was no exposure to superior or inferior culture due to the lack of interaction and transportation means. In todays our life no culture can remain in isolation. From 1998-2002, every year 20 million refugee people qualified for and received UNOs aid. For example, if war occurs in any area it will triggers the mass migration of people. The last but not the least is educational globalization. The main factors of this globalization include internet, visa relaxations and scholarships. It is through internet that one can find the people of likewise. Secondly the visa relaxation for students also making it a strong factor of globalization. Scholarships motivate the students to strive for their goals harder than before.

Pros and cons:

Globalization actually creates discrimination between the poor and the rich which is a big flaw of this concept. it breeds credit based economies. The first world countries intentionally do not allow the deficit countries to stand on their feet. The third world countries are unable to run their economies by their own, so they have to open their palm in front of the major countries. These developed countries and organizations string conditions, that debt and dont let the smaller countries to utilize their own resources and stand on their feet. The weest has means to promote their culture and traditions. Modern media and entertainment sources are totally influenced by the West. The younger generation fantasizes the west and is also playing totally in the hands of western culture. We do not have those tools to promote our culture and traditions. The Muslims are lacking in modern sources of interaction to the countries of the world so globalization is totally in the lap of western culture. The governments respond more to the multinational corporations than to the interest of their own people. The politicians of third world countries are not able to develop good plans for their prosperity and progress. So the developed countries and multi-national corporations give them aid with some conditions and in that way they control the whole country. International law is a week law for rich and strong tool against poor. The communications and transport systems that have accelerated the pace of globalization are also at the disposal of terrorists, money launderers, and international criminals. On the positive side, improvements in communications and the spread of information has picked up a fast pace. Globalization brings about economic growth in countries that open themselves up to international trade. It has also brought about trade liberalization for many countries, enabling them to eliminate national barriers to trade. In the perspective of a huge multinational corporation like Microsoft, McDonald's or Coca-Cola globalization has given them opportunities for outsourcing - locating their operations outside their country of origin. Also, this has given them opportunities to produce their products at the least-cost locations and to get their raw materials at the most accessible sources. Average production costs have fallen as a result of economies of scale enabling them to compete in the global market and gain higher profits compared to domestic companies that don't go global. It also helps us in creating harmony among different cultures. There is nothing which the other world does not know about a specific culture. Every country has institutions to read about the other cultures. The concept of specific language and culture for specific region is emitting from the map of the world. The harmony among the cultures is possible with the role of globalization which consequently results into peace. It allows people throughout the world to run their business wherever they want. When a multi-national company goes in a region, it creates an opportunity of employment. It gives financial support for the betterment of roads and transportation. The free movement of capital is bridging gaps between the countries.

Conclusion:
The success of globalization depends basically upon how different factors which include governments, multinational institutions, private business and NGOs pursue the goals, not only globally but also collectively. Democracy and economic growth are interlinked with each other. Economic growth can only be possible if there is a stable system of politics. There should be more opportunities for employment and youth should be the focus of the unemployment policies. The politicians must be willing to develop their state efficiently. It can happen only when there is a stable democratic system in the state. To to reduce poverty, the governments, international financial institutions and civil society needs to conduct a real dialogue on how to make globalization work for the poor.

Bibliography:
Albrow. (1990). Giddens. (1999). Held. (1999). Newson, C. &. (1998). Williamson, J. (2002).