NAME: JESYL C.

GLODO
COURSE: FC 503B
COURSE TITLE: PHILOSOPHICAL-SOCIOLOGICAL-PSYCHOLOGICAL FOUNDATIONS OF
MANAGEMENT

GLOBALIZATION: MEANING AND ITS IMPORTANCE
Globalization is the free movement of goods, services and people across the world in a
seamless and integrated manner. Globalization can be thought of to be the result of the opening up of
the global economy and the concomitant increase in trade between nations. In other words, when
countries that were hitherto closed to trade and foreign investment open up their economies and go
global, the result is an increasing interconnectedness and integration of the economies of the world. This
is a brief introduction to globalization.
Further, globalization can also mean that countries liberalize their import protocols and welcome
foreign investment into sectors that are the mainstays of its economy. What this means is that countries
become magnets for attracting global capital by opening up their economies to multinational
corporations.
Further, globalization also means that countries liberalize their visa rules and procedures so as to
permit the free flow of people from country to country. Moreover, globalization results in freeing up the
unproductive sectors to investment and the productive sectors to export related activities resulting in a
win-win situation for the economies of the world.
Globalization is grounded in the theory of comparative advantage which states that
countries that are good at producing a particular good are better off exporting it to countries that
are less efficient at producing that good. Conversely, the latter country can then export the goods that
it produces in an efficient manner to the former country which might be deficient in the same. The
underlying assumption here is that not all countries are good at producing all sorts of goods and hence
they benefit by trading with each other. Further, because of the wage differential and the way in which
different countries are endowed with different resources, countries stand to gain by trading with each
other.
Globalization also means that countries of the world subscribe to the rules and procedures of the WTO or
the World Trade Organization that oversees the terms and conditions of trade between countries. There
are other world bodies like the UN and several arbitration bodies where countries agree in principle to
observe the policies of free trade and non-discriminatory trade policies when they open up their
economies.
The point here is that globalization has had positive and negative effects and hence a nuanced
and deep approach is needed when discussing the concept. What is undeniable is that globalization is
here to stay and hence it is better for the countries in the global economy to embrace the concept and
live with it.
http://www.managementstudyguide.com

History of Globalization

Globalization is not new. For thousands of years people have been trading goods and travelling
across great distances. During the Middle Ages, merchants travelled along the Silk Road,
which connected Europe and China. The modern age of globalization started with the Industrial
Revolution at the end of the 18th century. New machines were able to produce cheaper goods. Trains
and steam-powered boats transported products farther and faster. Since 1980, globalization has been
moving at a faster pace. Today it is easier for companies to work in other countries. The Internet gives
them the chance of reaching more customers around the world. Teleworkers work for firms that may be
far away. However, there is a growing debate over globalization. Governments are in favour
of globalization because the economy can grow. Other people are not so sure that there are
only advantages. Here are some arguments from both sides:

Good sides
Globalization lets countries do what they can do best. If, for example, you buy cheap steel from
another country you dont have to make your own steel. You can focus on computers or other
things.
Globalization gives you a larger market. You can sell more goods and make more money. You
can create more jobs.
Consumers also profit from globalization. Products become cheaper and you can get
new goods more quickly.

Bad sides
Globalization causes unemployment in industrialized countries because firms move their factories to
places where they can get cheaper workers.
Globalization may lead to more environmental problems. A company may want to build factories in
other countries because environmental laws are not as strict as they are at home. Poor countries in
the Third World may have to cut down more trees so that they can sell wood to richer countries.
Globalization can lead to financial problems. In the 1970s and 80s countries like Mexico, Thailand,
Indonesia or Brazil got a lot of money from investors who hoped they could build up
new businesses there. These new companies often didnt work, so they had to close down and
investors pulled out their money.
Some of the poorest countries in the world, especially in Africa, may get even poorer. Their
population is not as educated as in developed countries and they dont have the new technology that
we do.
Human, animal and plant diseases can spread more quickly through globalization.

Many experts say that we need a different kind of globalization in our world today. There must be
ways to make sure that all countries profit from the good sides of globalization. We should help poorer
countries by giving them better education and showing them how new technology works. Every
year, leaders of the worlds biggest industrial countries get together to discuss economic problems. This
meeting is called the G8 summit. In the last few years groups against globalization have organized
protest marches and demonstrations to point out that not everyone is happy with how the
worlds economy is developing.
http://www.english-online.at/economy/globalization/advantages-and-disadvantages-of-globalization.htm

The Pros and Cons of Globalization
People around the globe are more connected to each other than ever before. Information and
money flow more quickly than ever. Goods and services produced in one part of the world are
increasingly available in all parts of the world. International travel is more frequent and international
communication is commonplace. Globalization is an economic tidal wave that is sweeping over the
world. It cant be stopped, and there will be winners and losers. But before drawing any conclusions on
how it affects the U.S. economy, consider some of the general pros and cons of globalization.

The disadvantages of globalization
1. The general complaint about globalization is that it has made the rich richer while making the
non-rich poorer. It is wonderful for managers and investors, but hell on workers and nature.
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2. Multinational corporations are accused of social injustice, unfair working conditions (including
slave labor wages and poor living and working conditions), as well as a lack of concern for the
environment, mismanagement of natural resources, and ecological damage.
3. Multinational corporations which were previously restricted to commercial activities are
increasingly influencing political decisions. Many think there is a threat of corporations ruling the
world because they are gaining power due to globalization.
4. Opponents say globalization makes it easier for rich companies to act with less accountability.
They also claim that countries individual cultures are becoming overpowered by Americanization.
5. Anti-globalists also claim that globalization is not working for the majority of the world. During the
most recent period of rapid growth in global trade and investment, 1960 to 1998, inequality
worsened both internationally and within countries. The UN Development Program reports that
the richest 20 percent of the world's population consume 86 percent of the world's resources,
while the poorest 80 percent consume just 14 percent.
6. Some experts think that globalization is also leading to the incursion of communicable diseases.
Deadly diseases like HIV/AIDS are being spread by travelers to the remotest corners of the
globe.
7. Globalization has led to exploitation of labor. Prisoners and child workers are used to work in
inhumane conditions. Safety standards are ignored to produce cheap goods. There is also an
increase in human trafficking.
8. Social welfare schemes or safety nets are under great pressure in developed countries because
of deficits and other economic ramifications of globalization.

The positive side of globalization
Globalization has a positive side as well. Supporters of globalization argue that it has the potential
to make this world a better place to live in and solve some deep-seated problems like unemployment and
poverty. The marginal are getting a chance to exhibit in the world market.
Here are some other arguments for globalization:
1. The proponents of global free trade say that it promotes global economic growth, creates jobs,
makes companies more competitive, and lowers prices for consumers. It also provides poor
countries, through infusions of foreign capital and technology, with the chance to develop
economically and by spreading prosperity creates the conditions in which democracy and respect
for human rights may flourish.
2. According to libertarians, globalization will help us to raise the global economy only when the
involved power blocks have mutual trust and respect for each others opinion. Globalization and
democracy should go hand-in-hand. It should be pure business with no colonialist designs.
3. Now there is a worldwide market for companies and consumers to access products from different
countries.
4. There is a world power that is being created gradually, instead of compartmentalized power
sectors. Politics are merging and decisions that are being made are actually beneficial for people
all over the world.
5. There is more influx of information between two countries.
6. There is cultural intermingling. Each country is learning more about other cultures.
7. Since we share financial interests, corporations and governments are trying to sort out ecological
problems for each other.
8. Socially we have become more open and tolerant towards each other, and people who live in the
other part of the world are not considered aliens.
9. Most people see speedy travel, mass communications and quick dissemination of information
through the Internet as benefits of globalization
http://www.manufacturing.net/articles/2010/06/the-pros-and-cons-of-globalization