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Advantages and Disadvantages of Globalization: Ideologies that Drive Brand Expansion


Task: Draft a very exclusive essay on the advantages and disadvantages of globalization


As per Redding (1999), the higher degree of unification among the markets all over the world that facilitates the free flow of capital, goods, and services without any sort of restriction or hindrances is termed to be globalization.

As per the observations of other renowned and well efficient researchers in the same field argues that apart from the unification of the markets all around the world, the globalization facilitates and encourages the transfer and innovation of new technologies since the competition among the world-class companies would require immense requirement in the business process to outrun their rivals. These advancements could be in the crucial fields like export-import process, process of communication, expansion of the company beyond the national boundaries, high mobility of the customers by the introduction of most modern vehicles, potential natural risks (natural hazards, disease, pollution, etc.), and effective management of the crucial elements infirm (Ideas, capital, goods, data, etc. (Braibant, 2002).

Hence it could be summarized that by the introduction of ideologies of globalization among all the nations, the potential barriers and hindrances like national boundaries, government regulations, restriction in the economy, etc. have lost its significance concerning the flow of goods and services and thus facilitating very easy trade in the global market. By eliminating the barriers among the markets all over the world, globalization has created a unified market for the world economy. It was being clarified by PRUS in 2001 that the surge in the level of connectivity, amount of capital, service, goods, and increased rate of transportation have been achieved by the application of globalization. The ideology of globalization was introduced to bring the pool of both rich and poor companies in a single vessel. By this, the person could be able to buy a cheaper substitute for a product, which may have been manufactured in a very distant company. Over time, all the barriers in the trade of goods and services were expected to wear off after the introduction of globalization.

Although it is very clear that the introduction of globalization has turned out to be a very beneficial move for the developing countries since they could find a new market for the indigenously developed cheaper products to other companies and thereby creating heavy revenue. The giant companies like Wall Street has also gained a lot of profit by the introduction of globalization. But if considered the case of America alone, globalization has caused very destructive deindustrialization in its economy and has turned out to be very harmful for the middle-class working population. Since there are many hidden risks in the system of globalization, it would turn out to be very crucial that its demerits should also be discussed along with its benefits.

Adherents of the globalization had always put forward the argument that the ideology of globalization would make the world a better place. Researchers are very optimistic about this ideology and hence are expecting the solution of grave societal issues like poverty, unemployment, terrorism, communalism, etc. from this ideology.

  • The globalization would pen up all the markets for traders from all around the world. This condition would consequentially generate immense competition in the market and hence traders would be forced to sell their products at a cheaper price to sustain in the market. All this hypothesis is not working properly in all of the countries since their governments are manipulating the value of their currency to gain an advantage in the actual price.
  • Researchers had staunchly claimed that the ideology of globalization would encourage the growth of the global economy and find a solution for issues like unemployment and incompetence of the domestic industries.
  • The idea of globalization was expected to eliminate the international barriers n trade like subsidies, VAT, Additional tariffs, import duties, etc. Although this has turned out to be only partially true since there still exists a barrier in the free trade of products. Even the countries which had taken the upper hand in implementing globalization continue to impose heavy duties on the export and import of the products.
  • The major benefit which turned out to be true is that the customers are being empowered to buy any product marketed by any manufacturer in a distant country.
  • The introduction of globalization has also made aware the people of the world about the benefits of democracy and hence has caused the emergence of strong protest against the autocratic and exploitative governments. The policies of globalization also ensures that no country could approach another nation with a goal of colonization.
  • The poor countries are the one who was being benefitted by globalization the most since it has helped in installing new technologies, foreign deposits, providing employment, bringing down the rate of poverty, increasing the standard of living, introducing new and healthy democratic governments, a new dimension for human rights, etc. The ideal goals of globalization have been achieved only in poor countries.
  • Globalization has introduced different cultures to many countries of whom most of the population remained unknown. This created a new dimension and respect for the multilingual and multicultural societies.
  • The innovation and technological advancement developed in a certain country could also be accessed by other countries and hence there is no such big barrier that prevailed earlier. This exchange in data has brought an overall change in the field of science and technology.
  • The power is now being distributed among all of the nations since it is the economic power that matters the most in the global environment. Since all the countries are competing ferociously for economic superiority, the power is not limited to a few countries as earlier did. The government of the countries is now being forced to take a populist decision and thus all of the schemes and programs are now introduced for the welfare of the population.
  • The globalization has increased the importance and significance of the internet and thus formulated and encouraged the cheap and speedy way of processes in the system of communication along with the transfer and publishing of crucial data.
  • Since the culture of various countries are now familiar to the mass a new level of tolerance has been developed among the world community since they could empathy the thought process of an individual coming from a specific cultural background. The communities from various countries are not now seen with suspicion or are considered to be aliens.
  • The environmental and economic problems are now being considered a common problem among the world nations and hence the governments tend to take a comprehensive and collective decision regarding the issue.
  • As the countries have seen the possible outcomes of globalization, they have entered into several free trade agreements like NAFTA and TPP.
  • The ideology of globalization had helped in decreasing the issue of unemployment since many companies were encouraged to invest in developing countries.
  • The flow of skilled labor had also increased the rate of employment along with providing the companies with cheap and quality labor.

For the better outlook of the context, the benefits are being discussed by classifying it to the relative sections.

Labor and employment
More employment opportunities could be generated when a big multinational company shifts its manufacturing units into a developing country. Hence the entrance of multinational companies would be a decisive factor in solving the issue of unemployment. As per the observation made by Rama in 2003, a considerable level of employment could only be produced when the multinational companies enter into the zones of export- processing which requires a large group of skilled labors to maintain the smooth functioning of the manufacturing units.

If taken the instance of Coca Cola, it has taken the step to invest and install some of its bottle manufacturing units in Malaysia that may require the overall sum of $ 301 million. The company has promised overall employment of 8000 of which around 800 would be employed in the plant itself (Agence France-Presse, 2010).

As per the opinion of woods in his work in 2000, to attract the maximum amount of foreign deposit investment the developing countries start competing with others very ferociously. As a part of which major deregulation of policies is being committed by the nations so that the multinational companies find it very convenient to invest in their domestic economy. Since the multinational companies could afford a cheaper workforce, less expenditure on the manufacturing process, fewer taxes, etc. they often tend to invest more in the developing countries.

It has been argued by The Economist (2001) and Woods (2000) that sometimes as a welfare point of view, the developing nations adopt a policy to increase the wages and safety measures of the local workers, which some times turn out to be disastrous since there is the strong possibility that the multinational company would shift its production unit to another country which could offer the skilled workers at a cheaper rate with fewer complications. The global companies always tend to thrive in the business environment which offers them minimal restriction.

Technology Transfer

The transfer of technology could only be done through a channel with standard quality and this is a crucial aspect since these multinational companies sustain in the global market by installing most modern technologies. The importance of the transfer of technology increases in developing countries since they lack the infrastructures and facilities to conduct research and technological advances. It is through the transfer of the technology that various competitive strategies are implemented by the multinational company in developing countries (Stewart et al., 2003). As per the arguments of Hipkin and Bennet in 2003, it is the facility of providing technology transfer that makes the developing countries sustain in the global market since the giant companies don’t prefer the environment which is technologically retarded.

As per the identification made by Peter Buckley, there are around ten ways in which the technology could be transferred (1985, citied in Transnational Corporations and Technology Transfer to Developing Country). The most prominent one turns out to be the tool of Foreign Direct Investment under which the multinational companies could bring down the cost o technology transfer (Cantwell and Dunning, 1994).

The transfer of the technologies among the nation would help to understand the implication and functioning of the most modern technologies. Although the copyrights for the research and development sometimes restricts the users to decode the technology used and hence, they sometimes had to find a suitable individual or a group who have well knowledge and are skilled in operating the modern technology (Mansfield and Romeo, 1980).

Though the concept of globalization could bring a lot of benefits for the economy in developing countries there are some hidden demerits of its implication. Since there is a heavy transmission of technology to the developing nation, there would always pertain a risk of after-effects since the systems and the environment of the developing country would not be suited to handle the new technology. One of the best examples of this would be the Bhopal gas tragedy happened in India. The disaster was happened in one of the manufacturing units of Union Carbide India which used to produce pesticides. Although the company had installed very modern and sophisticated security measures there happened a leakage in the system which eventually caused the death of around 500000 people (Eckerman, 2005).

Social Impact
The ideology of globalization has its own positive and positive aspects while implementing it in a developing country. The idea of globalization would reduce the level of poverty by providing a lot of employment to the younger generation with relevant skills (Lee and Vivarelli, 2006). With the help of new jobs and high salaries, the individuals could increase the probability of survival and thus could increase their standard of living.

The advent of globalization has eventually changed all the components of society like the path of career, families, the standard of living, etc. The globalization has affected the lives of people in many ways like the process and technique used in communication among them, in between organization, and also among the government all over the world.

The major forces like global trade and foreign direct investment in the national economies all over the world were being influenced by the emergence of new theories and techniques in the field of information technology. The major issues of the company are also related with the factor like poverty, unemployment, imbalance in the opportunity, a corporate environment which may show the trend imposed by the globalization (Globalisation 101, 2002).

As mentioned in the above section of this report on the advantages and disadvantages of the globalization, the economy of the nation and the research and developments in the technology are interdependent. The globalization has led to the introduction of modern technologies in every corner of the world. The technologies have made the companies very competent and hence has led to the increased performance of the global market (Freeman, 1998; von Tunzelmann, 1995). As per the observations made by Nussbaum and Sen in 1993, the money and resources spent on the development of technology is never a waste and always shows an optimistic sign towards the sustenance and development of the economy and hence the globalization leads to a strong display of economic freedom keeping in mind the social changes.

How globalization impacts on different countries
As per the observations made by Baghwati in 2004, the phenomenon of globalization has induced a major role in uplifting the economy by giving them confidence and optimism regarding their future. The eminent economists like Chatterji and Gangopadhyay have argued that the introduction and implementation of the globalization have reduced the majority of the interruptions in the global market. It has also facilitated a very effective and easy flow of goods and services crossing the national boundaries.

Richardson (2000) in his work has commented that globalization has opened up a plethora of opportunities for the developing countries which have increased the performance of their domestic economy. The developing countries have marched at a fast pace towards the balance of their economy by the increased rate of trade with other countries. The arguments of Richardson were being supported by the combined work of Dierks in 2001 (Richardson, 2000; Dierks, 2001) and had reiterated the fact that the globalization process has reduced the barriers among the national boundaries which the government has tried to amplify by manipulating the export-import taxes and tariffs suitably.

As mentioned earlier, the entry of globalization has raised the flow of funds and investment into the economies of developing countries. It s a commonly known fact that the increased rate of foreign direct investment would balance the economy of a certain country. The stabilized situation would help the country in convincing other organizations and countries to provide loans and investments (Aurifeille, 2006). Although the constant flow of capital may generate a situation of depreciation in the rate of trade.

As per the information provided by Chan and Scarritt (2001) in their work that the huge amount of capital inflow to a country would happen because of the high profitability and gain in the rate of exchange for the companies until the government tries to balance out this disparity by using special export-import schemes and thus create the sustainability in the balance of payment. Hence it could be noted that the process of globalization is designed to benefit the country since the investing companies could reap more profit because of less operational cost and cheap human resources. The countries are required to make a better export-import program so that there should be an equilibrium in the balance of payment. The major goal of the country should be to maintain the level of export beyond the limit of import.

The manipulation and the control over the hindrances and obstructions present in the global market have brought a unique level of customization in the developing market. This all is made possible because of the increasing interest of multinational companies on investing in the economy of developing nations since the operation charges and the skilled laborers are available at a very cheap rate consequentially contributing towards high profit for the company (Aurifeille, 2006). It is commonly known convention that it is the developing countries that are most benefitted by the introduction of globalization and they are enjoying a large boost in their domestic economy along with tackling social issues like unemployment, poverty, illiteracy, low living standard, etc.

The introduction of globalization has made available the comparatively poorer population of the developing countries with premium products that were earlier only available to the population of developed countries. As per the observation of Corsi in 2009, the existence of high competition would always lead to a situation that coerces the companies to devise out modern and effective techniques by the means of extensive researches. It could be thus observed that the implementation of globalization has brought immense competition in the global market along with an increase in the flow of goods and transmission of technologies.

Impact of globalization on the aspects of environment and economy
The modern era of heavy industrialization and new inventions in the field of business had revealed that the issues faced in both the economy and environment are pretty much connected. The population in the developing countries have witnessed the imminent danger on its ecosystem and depletion of the natural resources because of the accelerated and unpredicted of manufacturing activities. The increased and abrupt rate of industrialization had led to many dangerous environmental and ecological hazards and had created a large detrimental impact on the social conditions, economic determinants, paved the way for soil erosion, increased density and congestion in the urban area, increased level of emission in chemical pollutants, and high disposal of plastic (Long, 1990).

As per the observations made by Huber (1982) and Simonis (1989) the use of technical and sustainable techniques would help in attaining a safer and stable mode of modernization in ecology while also the theories and ideologies regarding political and societal aspects are considered. By this approach, the nations could achieve a very well maintained and balanced energy-intensive economy. The governments of the developing countries could also decrease the risks to the ecological factors by adopting some schemes for pollution reduction.

It could be noticed that implementing the most modern technologies is not always a viable solution for every issue while operating in a developing country since the amenities and facilities available in a certain country may not support or possess the resources or platform to operate the intended technology. Though it could also be noted that the above context had raised the demand for appropriate and modern technology in the developing countries and fact upgraded the existing technologies in the poor nations (Freeman, 1987).

It was being observed in this report on advantages and disadvantages of globalization that although the idea of globalization was intended to bring prosperity and wealth to especially the developing countries, there were some after of it which were revealed after few years of implementation. The conditions were so detrimental that if they were left unnoticed, the domestic economy of the country could have been sabotaged and brought to a certain point from where the return was not possible. Since the globalization pose both benefit and risk to the operating countries, the profit could only be reaped if the government devise the policies to manipulate the decisive factors of globalization present in the economy. The inference that the developing countries reap more profit than that of the developed countries because of the cheaper human resources and extensive possession of unused natural resources.

Reference List
Block, D., & Cameron, D. (Eds.). (2002). Globalization and language teaching Advantages and disadvantages of globalization. Routledge.

Featherstone, M. (Ed.). (1990). Global culture: Nationalism, globalization and modernity (Vol. 2). Advantages and disadvantages of globalization, Sage.

Mittelman, J. H. (Ed.). (1996). Globalization: critical reflections (Vol. 9). Boulder, Advantages and disadvantages of globalization CO: Lynne Rienner.

Mittelman, J. H. (Ed.). (1996). Globalization: critical reflections (Vol. 9). Boulder, Advantages and disadvantages of globalization CO: Lynne Rienner.

Raluca, P. (2010). Advantages and disadvantages of globalization. Ovidius University Annals, Economic Sciences Series, 10(1), 768-771.

World Commission on the Social Dimension of Globalization. (2004). A fair globalization: Creating opportunities for all. Advantages and disadvantages of globalization International Labour Organization.

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