Positive and/or Negative Impacts of Globalization - Term Paper Example

Student’s Name: Course: Tutor’s Name: Date: Positive and/or Negative Impacts of Globalization Globalization has been termed a big problem not only in the discursive or rhetorical sense, but also in a material sense since it is accused of creating uneven social and geographical outcomes. Right from defining globalization, some authors (Dicken 5; Faulconbridge and Beaverstock 331) observe that globalization raises more questions than answers especially because most of the simplistic definitions of the term do not capture elements such as the intensity, velocity, extensity and impact of the social and economic relations that occur from globalization. With this in mind, this essay acknowledges that there is a simplistic definition that refers to globalization as the “widening, deepening and speeding up of global interconnectedness” (Faulconbridge and Beaverstock 331). To capture the intensity, velocity, extensity and impact of globalization, this essay will adopt Faulconbridge and Beaverstock’s definition which refers to globalizations as the “spatio-temporal processes of change which underpin a transformation on the organization of human affairs by linking together and expanding human activity across regions and continents” (331). This definition has been chosen for use in this paper because it captures the geographers’ argument that globalization involves the configuring and reconfiguring of place, space and time through contemporary practices in the political, economic and technological arenas. As Dicken argues, globalization is fundamentally geographical (6). Taylor et al. (cited by Faulconbridge and Beaverstock 331) support the same proposition by arguing that globalization creates new geographical activities and flows, which often lead to wealth creation, increases in poverty in some areas, and ultimately, this means that globalization has led to unevenly developed geographical areas. When uneven development occurs and some people are uncomfortable about it, it essentially means that the social, political and even cultural fabrics of different societies are affected. The positive and /or negative impacts of globalization The negative and positive effects of globalization arguably go hand-in-hand. For every beneficiary of globalization, there is a loser. In one type of globalization aptly named offshoring for example, firms are able to source for cheaper services abroad and as a result, they improve their competitive advantage. Offshoring is also advantageous to recipient countries since such jobs provide employment opportunities for the local populations. However, offshoring also has a negative impact in that it exports jobs abroad hence meaning that the home country does not benefit as much from job creation (Faulconbridge and Beaverstock 337). Before delving into the specific positive and negative impacts of globalization, it is important to point out that globalization in most literature (Dunning 34; Giddens 78; Paliwoda and Slater 374 etc), is perceived as having an effect on cultures, technology, politics and economies. One of the major facilitating factors for globalization has been cited as the “falling trade barriers, the spread of free trade and trade harmonization in an electronic age, bringing a reduction in the bureaucracy surrounding international trade (Paliwoda and Slater 374). Clearly, the combination of lower trade barriers and the use of information technologies have made communications easier and fast, and this has brought about the realization of one of the positive impacts of globalization – increased trade. The importance of increased trade in the global space cannot be underestimated since it allows countries to concentrate on what they can competitively produce, while importing the rest from their trade partners. As Cuyvers, De Lombaerde and Rayp note however, economically, the increase in global trade is not only beneficial, but also has elements of creating wage inequalities (255). Specifically, globalization carries the risk of increasing unemployment – especially where jobs are exported to cheaper destinations abroad – and this increases the risk of income inequalities in specific countries. When such happens, governments use interventions such as income redistribution through taxes and/or labor protection among others. The latter is evidence that globalization affects the political environment of countries. On a positive note, economic globalization has been seen to increase labor mobility hence allowing employees to find work that suits them best and employers to find talent that fits the job roles. Based on the foregoing, it can be argued that employees and employers are more flexible in matters related to employment and wages. On the counter side however, economic globalization has undermined labor standards contained within national jurisdictions, and this essentially means that it has negatively affected socio-economic policies (Curyvers et al. 255). Globalization’s positive impacts also include improved growth rates which result from increased trade between countries. The trade spurs demand, which triggers an increase in productivity as individual countries try to make the most out of the global demand for goods and services (Bigman 27). As nations seek for better ways to enhance their productivity, more innovations emerge and as a result, the world experiences enhanced technological capability. The counter side of improved growth rates, enhanced productivity, and better technological capacity is that they all seem to favor the rich developed countries. Consequently, the poor nations get more into poverty – especially because they lack the capacity to compete with developed countries in production and trade – while the rich countries continue prospering. This is illustrated by Bigman (27) who observes that most major investors who export products from poor developing countries are foreign direct investors. In other words, the domestic firms of such countries still do not have the capacity to grow or manufacture goods that are exportable. Additionally, the same populations of the poor developing countries are offered foreign, albeit cheaper, fast moving consumer products in retail outlets and this effectively kills emerging local industries. The transfer of technology from countries of origin to other countries is another positive impact of globalization (Bigman 29). Technology transfer is closely linked to the flow of foreign direct investments (FDIs) from developed to developing nations. While FDIs create much more wealth for the investors, the recipient nations also benefit by getting employment for their nationals as well as from the tacit knowledge that is transferred from the investors to the employees sourced from the host nations. Viewed in this perspective, FDIs may not be very advantageous to the recipient nations in the short-term; however, FDIs are likely to offer long-term benefits through creation of technology and knowledge capacities in the recipient countries. The emergence of cultural homogeneity is one of the negative impacts cited by scholars such as Asgary and Walle (60) in association with globalization. While increased communication and technological convergence are cited as some of the positive effects that globalization has on international trade, they are also blamed for enhancing cultural diffusion. For example, the American culture is increasingly being transferred abroad through Hollywood movies and restaurants such as McDonald’s. According to Asgary and Walle, while businesses make fortunes selling homogenous products throughout the world, they are creating similarities in cultures through encouraging similar social contact and technological approaches (60). Standardization and homogeneity in the economic sphere are seductive since they make it easier for firms to attain economies of scale, and are also able to help businesses mobilize international loyalty around their brands. When the latter happens, a firm can run coordinated and unified global marketing campaigns with great success. Culturally however, such standardization and homogenization lead to the global theory that is dubbed “McDonaldization” (Asgary and Walle 61). McDonaldization is a term that implies that the western consumer culture is relentlessly infiltrating other cultures and transforming the societies, nations, and regions. In addition to the consumer culture, Asgary and Walle observe that even the ideas and attitudes dominant in the west are slowly but inevitably replacing the ideas and attitudes that other cultures used to hold as true (61). A major negative impact that arguably arose from the globalization of culture is what Asgary and Walle term ‘a consumer mentality’ (61). Most Asian communities – especially in places like China – have always valued austerity and keeping monetary savings for themselves and future generations (Holton 145). However, the need to have some savings is cited to be diminishing in such cultures as western influences where consumerism – as is prevalent in the west – is advocated for by marketers. This can be interpreted to mean that cultural influences from elsewhere are eroding the values and beliefs that some societies used to hold onto. When such things happen, it is practically possible that the societies will eventually lose their identities as they will have embraced foreign cultures. Consequently, the distinctiveness of cultural heritages, influences of unique societies and families, and the influences that cultural reference groups have on people may fade in comparison with what was the case before. It is also possible that cultures will start efforts to resist standardization and homogenization and those that will succeed will perceive their success as a badge of honor. Should the foregoing homogenization-resisting efforts succeed, Asgary and Walle argue that the probability of increased polarization in the world would go up (61). Whether polarization would be regarded as a positive or negative impact of globalization especially in light of the criticism targeting cultural homogenization is a debatable issue. On one hand, it would be a relief for people who lament the cultural conformity that is allegedly brought about by globalization. As Holton observes, cultural ethos and traditions cannot be easily standardized as has happened in marketing strategies, economic system or in technological convergence (145). Most notably, there are and will always be people who are intent on protecting their cultural enclaves characterized by unique values, heritage, habits, and character. To the businesses in the global market place, such unique cultures will present distinctive market segments that will no doubt be polarizing the seemingly homogenous market. Preserving cultural identities will be good for the sake of maintaining diversity and cultural distinctiveness; it might even be beneficial to niche marketers. However, such cultural enclaves will ‘poke holes’ in the homogenous global market that some big multi-national corporations target. In other words, though cultural homogenization and standardization have been cited numerous times as some of the negative impacts of globalization, the polarization hypothesis as discussed in this paragraph contains evidence that could be indicative that globalization is making people aware of the need to preserve their unique cultural identities. As would be expected, not all cultures will remain unscathed by the cultural homogenization trend that results from globalization. However, it is most unlikely that globalization will lead to cultural homogenization globally. If anything, Asgary and Walle suggest that cultures all over the world are adjusting to new cultural influences while maintaining their own cultural identities through hybridization (67). European teenagers will for example adopt American fashion, but will strongly hold on to their nationalistic viewpoint. Politically, the emergence of a political economy has been criticized as leading to the end of national states through the shift of political governance locus to the global space. Consequently, it is said that nation states are joining hands with institutions such as non-government organizations and multi-national corporations to govern globalization (Cox 110). In return, national governments no longer have the powers to control global corporations, provide the citizenry with social welfare, or reduce external threats posed to their countries (Cox 111). This argument has however been refuted by the likes of Yeung (a), who observes that it is too early to proclaim that nation states are no longer functional (339). Specifically, Yeung (a) observes that nation states play a critical and active role as globalization promoting agents through processes such as the liberalization of markets (340). Overall, globalization has made it easier for people across different regional localities to communicate, and has enhanced transportation on the global platform as people seek more efficient supply chains (Watson 130). It has also brought about cost efficiencies since businesses are able to source resources and labor from cheaper places, while selling products and services to an expanded market. Even though the erosion of cultural traditions is one of the most cited negative impacts of globalization, it has been argued that embracing other cultures only manifests itself at the most superficial level (Watson 125). In other words, Watson suggests that the negative impacts can be managed, and are therefore not damaging enough to condemn globalization as an entirely bad phenomenon (125). If uneven development is a major concern to the developing nations for example, they should find ways mobilizing support to ‘level the playground’ through initiatives such fair trade among others. Since globalization affects trade and the economy, the cultural as well as the political spheres, Faulconbridge and Beaverstock observe that the beliefs that it has led to standardization and homogeneity should be investigated (340). The belief by an opposing side that globalization encourages diversity is also worth some deeper investigation, because as Faulconbridge and Beaverstock observe, analysts, scholars and researchers owe the world some truth about the specific nature of globalization (340). Specifically, people deserve to know that “globalization is uneven in scope and has negative as well as positive impacts” (Faulconbridge and Beaverstock 340). From such knowledge, regions, countries, societies and cultures that at the receiving end of globalization would be better positioned to strategize on how best to guard themselves from the negative impacts while increasing their chances of benefitting from the positive impacts. The negative and positive impacts of globalization will continue being contested and being critiqued until a proper understanding of the concept emerges. In the foreseeable future however, it would appear that there is an open agreement that globalization has negative and positive impacts, but like everything else that humanity has had to deal with, people, societies, cultures, nation states and the world at large will just have to accept the positive impacts while devising new ways of handling and countering the negative impacts. The cultural polarization concept discussed herein is an example of how societies can fight against negative impacts brought about by globalization. However, in the conventional imperfect and unequally developed world, what is good for the goose is not always good for the gander. Trade liberalization would for example be a perfect solution to freeing trade in a globalised world if all countries are equal in production and trade capacities. However, the underdeveloped nature of some countries makes globalization a concept that only breeds more inequality. In conclusion, this paper agrees with Yeung (b) who argues that “…globalization is a contested and political phenomenon...made by humans, and, if so, can be unmade or remade by humankind (294). (Cox 109) further observes that “globalization is more product than condition”. The foregoing can be interpreted to mean that globalization does not have a predestined outcome; there are preconditions that different actors must do for globalization to take place. If anything, different global players have the decision to determine how globalization will turn out to be. If globalization does not favor them for example, the poor developing countries can choose to participate in the global arena in more a more strategic manner by for example leveraging their labor to earn better wages from the offshore employers. In the end, each nation or groups of nations must weigh the positive and negative impacts of globalization and decide whether to change the manner in which they relate to other countries or not. Whatever the case, globalization is seemingly a concept that will continue raising much debate among scholars and analysts. Works Cited Asgary, Nader and Alf, Walle H. “The cultural impact of globalization: economic activity and social change.” Cross Cultural Management Journal 9.3(2002): 58-75. Bigman, David. Globalization and Developing Countries: Emerging Strategies for Rural Development and Poverty Alleviation.  Surrey: CABI, 2000. Print. Cox, Kevin R. “Globalization the regulation approach and the politics of scale.” Power, Politics and Geography: Placing Scale. Ed. Andrew Herod and Melissa Wright. Oxford: Blackwell, 2002. 103-141. Print. Cuyvers, Ludo, Phillip De Lombaerde, and Glenn Rayp. “The Labor Market Consequences of Globalization and Regionalization.” International Journal of Manpower 32.3(2011): 252-256. Dicken, Peter. “Geographers and ‘Globalization’: (Yet) Another Missed Boat?” Transactions of the Institute of British Geographers 29 (2004): 5-26. Dunning, John, H. Making globalization good: the moral challenges of global capitalism. Oxford: OUP, 2003. Print. Faulconbridge, James and Jonathan Beaverstock. “Globalization: Interconnected Worlds.” Key Concepts in Geography (2nd edition). Ed. Nicholas Clifford, Sarah Holloway, Stephen Rice, and Gill Valentine. London: Sage, 2009. 331-343. Print. Giddens, Albert. Runaway World: How Globalization is reshaping our Lives. London: Profile Books, 1999. Print. Paliwoda, Stanley and Stephanie Slater. “Globalization through kaleidoscope.” International Marketing Review 26.4/5(2009): 373-383. Watson, James. L “MacDonald’s in Hong Kong.” The Globalization Reader. Ed. Frank Lechner and John Boli. Oxford: Blackwell, 2004. 125-132. Print. Yeung, Henry W (a). “The dynamics of Asian business systems in a globalizing era.” Review of International Political Economy 7.3(2000):399-433 Yeung, Henry W (b). “The limits to globalization theory: a geographic perspective on global economic change.” Economic Geography 78.3(2002): 285-305. Read More