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Globalisation – Process of Interaction and Integration

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    Introduction Globalisation has already existed for thousands of years. People have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. So what is globalisation? Globalisation is a process of interaction and integration among the people, company, and governments of different nations, a process driven by international trade and investment and aided by information technology.

    Globalisation usually refers to the rapid increase in the share of economic activity taking place national boundaries. Globalisation goes beyond the international trade in goods now and it also includes the way those goods are produced, the delivery and sale of services, and the movement of capital and so on. The challenges for business, for individuals and for governments are to realize the opportunities from globalization – in stronger economic growth, new business prospects, and higher living standards. The current globalisation is driven by policies and technology that have opened economies domestically and internationally.

    Now, many governments have adopted free-market economic systems to increase their productive potential and get new opportunities for international trade and investment. For the corporations, taking advantage of new opportunities in foreign markets, they will get much more profit. The case of Boeing 777 in course of Internationalisation of Business mentions 132,500 component parts of Boeing 777 are outsourcing from lots from different countries and combining in the United States. Furthermore, ‘Globalisation benefits all who participate in globalisation process. This conclusion will make those who are opponents of globalisation feel unhappy. I will state my opinion about this. Globalisation and its impact Globalisation has set in motion a process of far-reaching change that is affecting everyone. New technology, supported by more open policies, has created a world more interconnected than ever before. This spans not only growing interdependence in economic relations – trade, investment, finance and the organisation of production globally – but also social and political interaction among organisations and individuals across the world. The potential for good is immense.

    The growing interconnectivity among people across the world is nurturing the realization that we are all part of a global community. The global market economy has demonstrated great productive capacity. Wisely managed, it can deliver unprecedented material progress, generate more productive and better jobs for all, and contribute significantly to reducing world poverty. However, we also see the current process of globalisation is generating unbalanced outcomes, both between and within countries. Wealth is being created, but there are also few countries and people are not sharing in its benefits.

    From the other hand, globalisation still affects some areas in those countries or people’s daily life more or less. Threat or Opportunity Globalisation has the potential to generate wealth and improve living standards. For those countries with the products, skills and resources to take advantage of the opportunities provided by global markets, the benefits are evident. However there are also significant drawbacks particularly for those nations that don’t fall into this category. Globalisation sometime will be defined as increasing the gap between rich and poor.

    This is because globalisation usually focuses on the needs of business. Everything has its positive and negative aspects. For example, Vietnamese are significantly influenced by globalisation, which provide individual and government for more employment, stable income, living standard rising, GDP increasing and export etc. However, the negative aspect can be quoted by American multi-national companies, which they moved their manufactories into developing countries because of low cost, but it will cause more people losing their jobs. However, globalisation is the process of economic circle.

    While domestic companies move out, other foreign companies are moving into the market and this will maintain the level of employment and local economy etc. ‘Globalisation is Good – Johan Norberg on Globalisation’ in Youtube. com, this video expatiated and illustrated Johan Norberg’s own opinion about globalisation. He though globalsaiton is good and traveled to some different countries such as Taiwan, Vietnam and Kenya. He introduced the influence of globalisation from different ways like technology in Taiwan, Nike in Vietnam and flower export in Kenya.

    In my opinion, I think globalisation does make great influence on world economy and opportunities are much more than threats. Opponents of globalisation will talk about some negative aspects. For example, many of the poorer countries in the world have been encouraged to develop their economies toward producing exports and reducing already inadequate spending on public services so that they can repay their foreign debt and this has forced more people into a life of poverty and uncertainty. In my opinion, the export will increase the government’s revenue and bring the growth of GDP as well.

    Globalisation will bring lots benefits such as employment, training provided, skills and knowledge and so on, which are not only including tangible but also intangible benefits. People have wide-screen TV’s and cheap Chinese goods. The greatest benefit from globlisation is that it gives some countries a greater range of cheap overseas goods to buy. China is the best example to prove globalisation is good. Government subsidies, import tariffs and lower paid workforces are what make a lot of multi-national companies choose China as one of important steps of their globalisation.

    The whole world can see how quickly China develops so far and how large potential exists in China in the future. Key players A number of key players are driving globalisation. They include: ? Multinational enterprises that carry out business across national boundaries ? The World Trade Organisation (WTO), through which international trade agreements are negotiated and enforced ? The World Bank and the International Monetary Fund (IMF) which are meant to assist governments in achieving development aims through the provision of loans and technical assistance ?

    National governments, who together with these international institutions, are instrumental in determining the outcomes of globalisation ‘Globalisation benefits all who participate in the globalisation process’ Economic globalisation can be measured into four main economic flows: ? Goods and services – Exports and imports are the main national income or per capita of population ? Labour/people – Labour force, net migration rates, inward or outward migration flows ? Capital – Inward or outward direct investment ? Technology R&D, technological advances such as motorcar, broadband and mobile etc Here, the ‘All’ who participate in the globalisation process can be defined as: ? Business Sector ? Individual ? Economy Sector Business Sector Business Sector can be divided into two parts: – Globalisation of Markets – Globalisation of Production The chapter 1 of Globalisation In textbook of this course defines the globalisation of markets refers to the merging of historically distinct and sparate national markets into one huge global market place.

    More and more companies prefer to offer standardized product in different markets because tastes and preferences of consumers in different countries are beginning to converge on a global norm, helping to create a global market. Except Big Brother, Coca-Cola, Sony Playstation and McDonald’s hamburger, KFC, Heineken, Budweiser, Rolex and Omega etc offer a standardized product worldwide, they are helping to create a global market as well. Standardlisation will be easy for companies to control the quality and raise effective and efficient management.

    For consumers, they do not need to compare whether the products or services are good in this market or that market and they can image there are lots of people having/receiving the same products/services. Chapter 1 also talks about the globalisation of production refers to the tendency among firms to source products and services from different locations around the world to take advantage of national differences in the cost and quality of factors of production. The globalisation of production can include: – Sourcing products – Outsourcing – Offshoring

    All companies hope to lower their overall cost structure but also allow them to product high quality product/services to compete more effectively against their rivals. Globalisatin bring them the greatest opportunities to source products, outsourcing and offshoring. These will help them to cut down the operation cost and find good ways or good place to get or manufacture the services or products they needed. Big numbers of companies take these three choices to save its cost and keep the quality, competitive advantage they prefer. Individual

    The influence of economy globalisation on individual can involve lots of areas such as income distribution and purchasing choice etc. Economic globalisation is helpful to raise per capita of population and it will short or increase the distance between rich and poor. Globalisation will change the individual income distribution and influence individual’s daily life. For example, Irish people can choose Vodafone, O2 and Meteor as their mobile phone network. These three companies will compete through price and service package. Then, individual can choose the one with lowest price and best service.

    This is the benefit from globalisation. If there is no globalisation, only local mobile network company exists in the market and this is monopolizing in the market. Then, there are no or less competitors and individual have to suffer high price to use this network. This is the same to the broadband. Globalisation will increase the employment and unemployment as well. Like what I talked before, while companies go abroad, other foreign companies come in. In the poor countries, if globalisation causes poverty, then countries that become more economically integrated via trade and investment should do worse.

    But some that have become more integrated into the world economy, such as China, have made progress. However, it has to say that globalisation do raise individual income more or less in the poor countries. Economy Sector Jobless is the major problem facing to most countries. Almost countries encourage domestic or foreign companies to set up companies in its own country. This does not only raise the revenue and tax, but also provide more job opportunities for people. On the website of Bookface. com, it claimed it decided to set up its head office of Europe and Africa in Ireland.

    This directly provides around 150 jobs in the companies. One of the most obvious forms of this economic benefit is the extent to which China has narrowed the gap in national income between itself and the United States in a comparatively short period of time. The ratio of the United State’s GDP per capita to that of China has closed considerably, from around 12. 5 in 1980 to slightly over 6 times in 1995 – startlingly halving of the gap in just a decade-and-half. And now, the currency exchange of Chinese Yuan to US Dollar is 6. 5 : 1 and it was 8. 2 : 1 before.

    Economic gloablisation provides country for more chance and opportunities of attracting foreign investment, which help solving short of capital. It is also in favor of developing domestic economy and promoting the development of domestic multi-national companies, which increase the competition in the world market. Overall, the benefits can obtain from globalisaiton including: – Increasing econmies of countries – Increasing wealth – Increasing living standards – Increasing technology and communication – Improving workplace standards. Etc. Negative repercussions

    While many countries, and countless millions of people, around the world have benefited from globalisation, such gains have not been spread uniformly; while a great many have benefited, not all have. Economic Liberalism, Development and Growth Such unevenness is not necessarily ‘the fault’ of golbalisation, or the international business that are most often regarded as the physical manifestation of glabalisation. All too often, the incapacity of individual countries and their citizens to realize the benefits of globalisation is the result of ‘government failure’ in those countries.

    Those countries and their citizens who have benefited from globalisation are those who have been willing to adopt policies which enable them to participate in the world economy, of free capital flows, movements of goods (trade) and of foreign investment. Conclusion Globalisation has already and will in the future, present domestic policy-makers with substantial challenges, many of which will revolve around their need to offer internationally competitive policy settings.

    I think the statement of ‘Globalisation benefits all who participate in the globalisation process’ is correct, although there are also existing some arguments from anti-globalisation about threats brought by globalisation. There is no one thing, which is perfect. Globalisation does make good influence on world economy, and business sector, individual and economic sector get benefit from globalisation. I think the benefits got much more than threats. Those opponents of globalidation use the mobile phone, watch TV, fast food and motorcars etc. Did they think about where they were from?

    Are they the products of globalisation? If so, they are the members of who get benefit from the process of globalisation. Bibliography Noam Chomsky Znet (2002), The Croatian Feral Tribune Sheila L. Croucher (2004), Globalization and Belonging: The Politics of Identity a Changing World, Rowman & Littlefield Atkinson, A. B. (1999), Is Raising Inequality Inevitalbe? A Critque of the Transatlantic Bhagwati, Jagadish (2007), In Defense of Globalization, Oxford, New York: Oxford University Press Wikipedia (2008), Globalization, available at http://en. wikipedia. org/wiki/Globalization , Accessed 25/10/2008

    Video Google (2008), Globalization is good – Johan Norberg, available at http://video. google. com/videoplay? docid=5633239795464137680 , Accessed 25/10/2008 Michael Bond (2000), Eve of the Apocalypse, What is Globalisation Global Education (2008), Globalisation, available at http://www. globaleducation. edna. edu. au/globaled/go/cache/offonce/pid/178 , Accessed 30/10/2008 110cn (2008), Globalization in China, available at http://www. l10n. cn/www/9/2008-07/4. html , Accessed 1/11/2008 Work submitted for assessment which does not include this declaration will not be assessed. DECLARATION I declare that all material in this submission e. g. thesis/essay/project/assignment is entirely my/our own work except where duly acknowledged. *I have cited the sources of all quotations, paraphrases, summaries of information, tables, diagrams or other material; including software and other electronic media in which intellectual property rights may reside. *I have provided a complete bibliography of all works and sources used in the preparation of this submission. *I understand that failure to comply with the Institute’s regulations governing plagiarism constitutes a serious offence.

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