Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.
Introduction
The proponents of Liberalization and globalization claim that globalization has opened up newer vistas of trade and business all around the globe. It is said that opening up of economies has now tilted the balance in favor of market forces, which is helping the consumer by way of providing quality at reasonable prices. Now the global policies together with domestic policies determine which way the domestic economy should move. No doubt this has brought newer opportunities, particularly for the developing world. some of the key benefits are; transfer of technologies from developed to developing world, increased capital flows, promises of improved productivity, better GDP figures etc.
Defining globalization from the international finance point of view, Walker and Fox (1999) cite the ‘the global integration of the financial markets’ as an important contribution of globalization. But the flip side is – now the market forces have started dictating the terms. As a result of globalization market forces have started the policies with the role of respective governments becoming limited in determining the nature of imports and exports. It is now the Multi-National Corporations (MNCs) who are effectively dictating the policies to the governments. With globalization, MNCs began to explore the markets outside their domestic grounds. In order to leverage the economies of scale at different locations, such companies try to set up some of their operations at these locations. Moreover, with the advancement in (Information Communication Technology (ICT), global distances have tended to become smaller while the world is gradually being seen as a global village. The goods and services sector is the most affected sectors with such technological advancements. The ‘affect’ has been positive or negative depending upon which part of world is being discussed. While commending the developments from globalization like opening up of world trade, better means of communication, internationalization of financial markets, mobility of resources, Braibant (2002) argues that the process has also resulted in a wide range of infections, diseases and pollution.
Globalization and the Recessionary Trends
Bracken (2004) underlines that it was since early 1990s when the term ‘Globalization’ became a catch phrase as it started entering into all walks of life even in developing economies. We’ve come a long way since then and today we find the global economy is once again at crossroads, reason the recessionary trends set in all around the globe. The present crisis started off with the sub-prime fiasco in US. The sub-prime crisis resulted in failure of couple of banks in US; the trend gradually spread over to other countries because other countries too had stakes in companies and banks of America – thanks to the process of globalization. During earlier times investing in other countries was considered a very complicated process with lots of restrictions put in place, but the globalization regime called upon the economies around the world, to ease all such restrictions and facilitate multinational companies and banks to invest in the companies and economies outside their country. Today we are in the middle of a global meltdown of share markets, failing banks, cash strapped economies, rising inflations, people committing suicides, family being destroyed, rising numbers of defaulting clients etc. All this has forced even the proponents of the globalization to do a comprehensive rethink over the policies being implemented and take adequate corrective measures.
Outsourcing of jobs – Pros and Cons
Globalization has been in existence for quite a while now. In the early ages it was essentially limited to business and trade. But with the beginning of the new form of market driven governments, globalization has filtered down to almost all walks of life like, media, culture, and of course the trade and business practices. Some countries like India and China were enjoying the increased attention being paid by MNCs in order to outsource a number of tasks, particularly, the Information Technology (IT) enables services. Such trends in fact, resulted in preparing a segment of the society which could enjoy the benefits of the outsourcing, is able to extract a fat pay package and make the most of the outsourcing phenomenon. On the other hand, workers belonging to non-IT fields could only see the young gals and guys in their teens, going to offices and spending their salaries lavishly on parties, white goods and cars. Though, the older employees get their salaries as usual, but the kind of divide that crops up between the ‘have’s’ and ‘have not’s’ results in vitiating the goodwill and thus further resulting in increased earning disparity and social tensions. This is particularly true of developing nations like Malaysia and India, which claim to be in the forefront of outsourcing phenomenon. But during these days, as the recessionary trends set in there are job losses across the board, which in itself is setting a gloomy trend.
Critics argue that globalization has in fact impacted the world affairs on many counts. While it is true that during the days of globalization high tide, economic conditions of many countries improved, it also resulted in challenging circumstances for segments in the society. Today, in view of the competition, profit margins have become quite thin, which sometimes forces the management towards taking cost-cutting initiatives, that includes outsourcing, retrenchments, relocation of employees, pressure on employee benefits etc. Countries like US, Germany and UK are affected by the phenomenon of outsourcing and availability of skilled workforce at cheaper rates from places like India, China, Philippines, Malaysia etc. Under such circumstances, the unions as well as the management come under pressure to fine-tune their strategies in order to retain the loyalties and goodwill. While Unions in these nations are busy fighting for the retention of jobs, managements too appear busy in taking on unions, political opposition and dwindling profit margins.
Globalization – Clash of Interests
As the MNCs grow individualistic, such companies also try to influence the manner in which the employees behave. While on the one hand, efforts are made to give fullest priority to the interests of the company, companies also try to influence the individual behavior of the worker by offering some of them exclusive benefits or even threatening them with reprisal. This comes in the way of efforts for uniting the workforce and hence results in affecting the overall collective bargaining environment. With the increasing say of MNCs in running the governments and affecting the policy formations, the respective governments too have come under pressure in respect of the welfare of the workers. In fact, the liberalization process demands that governments must shed the tag of being a ‘welfare state’ and instead become partner in marketing efforts. This has resulted in loss of sovereignty of many smaller nations, as these nations often find themselves at the receiving end of dictates from multinational corporations. As the stature of these companies keep growing, so does their leveraging power, which makes the states to compromise on many fronts. In fact, some MNC executives term it as a victory for free economy which helps in establishing sound trade relations amongst different countries.
Now the government has no real ‘control’ over the affairs of its economy. The policies are dictated by the MNCs and other countries from where these MNCs have come. This often leads to confrontationist stances amongst many nations, thus jeopardizing the prospects of good relations. On the other hand, many developed nations, which are home to these MNCs also face peculiar circumstances at the hands of these very companies. Countries like US have experienced job losses, increase in the number of unemployment rates and outsourcing of jobs. The sheer profit motive of companies is the main reason behind such decisions. In order to please foreign investors and make their economy more competitive, the governments tend to start off a chain reaction, which ultimately results in a ‘race towards bottom’ (Woods, 2000). In this race wages and taxes remain low, so that the MNC could reap maximum profits. If the governments try to influence the wage structure, MNCs dole out a threat of pullout and setting up operations in another low wage country. This results in abuse of workers’ rights on the one hand while taking away the job of the workers in native country. Sometimes, such MNCs offer the workers relocation outside their country, in lieu of their job retention, which implies lots of hardships to the workers, their families and dependents. But the companies are least bothered, as their interest is mainly driven by profit maximization. When developing economies try to go extra mile to please the foreign companies, sometimes they even lose the sight of their own long term impacts. The Asian crisis of 1997 is one such example, which resulted in huge costs to the economies of countries like Indonesia, Thailand, Malaysia etc.
Environment is another casualty of the increasing globalization activities. Helleiner (1996) contends that in order to encourage more economic growth, mass consumption and large-scale economic activities, natural environment is being robbed off the renewable and non-renewable resources. In fact, over-exploitation of minerals, raw materials and water results in adverse impacts like ozone layer depletion, warming of earth temperature etc. which have the potential of affecting the international community as a whole.
The outsourcing of jobs is being hotly debated and discussed on the political horizon amongst two leading contenders for the post of President of US, with many promises and assurances for the natives. Jobs are being lost primarily in the fields of the IT, and services sector, which the companies have carried to locations outside US, simply because they can get it done from these places at far cheaper costs, by employing equally competent young graduates. In addition, the measures like H1-B visas and the immigration policies have allowed manpower from other countries to take up all sorts of jobs in US. Presidential hopeful Sen. Barak Obama has said1, “The time to fix our broken immigration system is now… We need stronger enforcement on the border and at the workplace… But for reform to work, we also must respond to what pulls people to America… Where we can reunite families, we should. Where we can bring in more foreign-born workers with the skills our economy needs, we should”. Freer movement of people across borders is a fallout of the process of globalization actually. But America has started feeling the impact now. Obama’s campaign program details couple of reasons for the problems. These include:
- Explosion of undocumented population: It is stated the number of undocumented immigrants in the country has increased more than 40 percent since 2000.
- Immigration bureaucracy is broken: The problem in immigration bureaucracy has led to long waits for genuine immigrants, which often forces people to take the illegal route.
It is therefore quite clear that while on the one hand globalization has certainly brought the economies in one bracket, helped in mutual cooperation and bridging the gaps, the major fallouts like job losses, loss of national sovereignty, unfair trade practices, earning disparity etc. have proved to be huge burdens on national economies.
References
Barak Obama (2008). The Blueprint for Change-Obama’s Plan for America. Web.
Bracken, Paul (2004), ‘The Multinational Corporation Today’. Yale SOM Working Paper No. OB-06, PM-05, OL-19, Yale School of Management, Web.
Braibant, G. (2002). “The past and future of public administration”, International Review of Administrative Sciences, Vol. 68 No. 3.
Helleiner, E. (1996). ‘The international political economy and the greens’, New Political Economy, Journals Oxford Ltd, Oxford, Vol. 1. No. 1.
Walker, G.R. and Fox, M.A. (1999). ‘Globalization: an analytical framework’, GLSJ, Vol. 3 No. 2.
Woods, N. (2000). ‘The Political Economy of Globalization’. Macmillan, Basingstoke.
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.