Globalization is a process and a means to attain goals of globalism

Globalization

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Abstract

Globalization is a process and a means to attain goals of globalism. It is one of the most influential sources in determination of the future of the future path of the world. Globalization has many dimensions including political, social, cultural, security and environmental among others. This paper will focus on the meaning of the concept of “globalization” as viewed from all these dimensions. Different individuals, groups and organizations have different perspectives regarding the meaning of this concept. As a result there are different interpretations and reactions to “globalization”. Some view this concept as being beneficial and helping in advancement of economy while others view as being costly to the different segments of the world society. Thus, this paper will evaluate the benefits and costs stemming from globalization. In my own view, globalization is advantageous to for countries. I have highlighted some of the reasons behind my argument in this paper.

Globalization poses a lot of challenges to national governments. This paper highlights some of these challenges while still focusing on the different dimensions of this concept. Also, it will be prudent to mention some of the strategic approaches employed by different governments to cope and deal with such challenges. This paper goes a step further to evaluate the impact of globalization on Toyota motor company. It highlights some of the weaknesses and strengths of this organization brought about by the unstoppable process of globalization. Finally, this paper looks at some of the opportunities created by globalization process and also the potential threats it has to this company.

Globalization

Globalization is a process that allows greater interaction among countries, persons and businesses around the world leading to development of the global economy. It is manifested by political, social, cultural and technological integration of individuals, societies and economies all over the world, (Boudreaux D. J, 2008 p. 1). To a large extent, globalization results into harmonization of international laws and policies. For example, each country formulates its own trade policies regarding taxation and tariffs. With the influence of globalization, different countries are able to work to have identical policies in order to trade efficiently between each other.

According to Global Environmental Changes, Globalization and Food Systems (2005, p 67), the process of globalization is brought about by the linearization of international trade paving way for corporations to pursue larger markets. In addition, globalization has been brought about by the huge advances in infrastructure, communication and transportation. It means that all actors around the world are able to participate in global relations under common rules. Several agreements including the World Trade Organization (WTO) agreements provide the rules for trade, labour relations, environmental care, sanitary and food safety compliance among others. When a government signs them, it is ruled by the agreements. In many cases, this lead to revision of already laid national policies so as to conform to the agreements, (Sapru, 2008, p. 503). An example indicator of the extent of globalization is by looking at the volume of international transactions occurring per day. Currently, there is a flow of $ 1.2 trillion flowing through the New York currency markets every day. At the same time, the volume of international stock market transactions per day exceeds that amount.

Benefits of globalization

According to Global Environmental Changes, Globalization and Food Systems (2005, p 67), globalization process has numerous benefits. Some of these benefits are listed in this section.

Globalisation greatly helps to increase communication among people around the world on a more permanent basis and at much low costs. Presence of internet services recently has led to stronger corporate and personal relations. It helps them to advertise products and service, to acquire knowledge and obtain entertainment among other benefits.

Through development of new technology, financial transactions are made more quickly and much less charges. This facilitates business since it enables international flow of funds which supports international economy.

Globalization has enabled tourism business to grow significantly. This is due to the fact that, tourists are able to find more information about sites and new opportunities more easily since it is readily available. Through advancement in technology, firms of any size and from any location are able to agro-tourism and ecotourism.

Globalization has increased mobility of technological innovation including those for agriculture and agro-forestry. It is now possible to purchase materials, tools, equipments, seeds, vegetative tissues, and embryos by internet or mail and pay for them by electronic cards or card transfers.

Advent of new technology which has been a factor in globalization has led to increased foreign direct investment. This has resulted into higher competition by businesses globally and has enabled international business to thrive effectively.

With support of sound economic policies and technological advancements, many countries have been able to realize high growth rates in their economies. For example India has had a continued economic growth rate of 8% and more or above per year recently, (WTO, July 2008).

There has been an increase in the international flow of goods and services caused by the relaxation of trade barriers and compliance to common rules.

Countries that have adopted Liberalized economic policies have seen a reduction in the levels of poverty due to the associated wider market for local goods and services.

A newer technology in research, IT and production leads to reduction in the costs of production and increase in levels of sales. In addition, this leads to increase in the level of skills possessed by the labour force, (WTO, July 2008)

Due to the increase in flow of goods across borders, consumers are able to get better products at lower costs. This helps to mitigate the effects of inflation to a nation.

Costs of globalization

Apart from benefits, globalization is also associated with various costs as described below.

Faster financial flows and increase in interdependence on global basis lead to more international transfer of financial instability. A good example is the exchange rate and financial crises in Asia in 1998 starting from Thailand to South Korea. (According to Global Environmental Changes, Globalization and Food Systems 2005, p 67).

Globalization is associated with environmental and health problems such as global warming and pandemics. This is due to reduction in integrity regarding environment by corporations who take advantage of the weak regulations in developing nations.

Due to globalization, conflicts can escalate beyond particular boundaries or raise the stakes of conflict. For example, globalization may enhance the transfer band use of weapons of mass destruction,( Arnold, R. A., 2008, p 448)

Globalization has led to increase in possibility of civil war within nations and also war between countries as they fight for resources.

There is high possibility of transmission of diseases between nations unintentionally recently.

There is increased likelihood that economic difficulties affecting one nation may affect many other nations.

Globalization has led to increased flow of labour from developing to developed nations to seek for employment.

In my view, globalization is largely advantageous for countries. To a large extent, globalization increases rate and speed of international movement of goods and people in the world. At the same time, it helps to increase connection among all people around the world through the mass media. For example, it is possible to communicate with many persons throughout the world using mobile phones or internet services at much lower costs. In addition, globalization has led to increased interdependence among nations internationally. This has helped to increase economic prosperity in the developing countries. Environmental protection is enhanced across the economies of the developed world. Throughout the world, globalization has helped to improve the living standards of people due to increased level of food security and improved technology and skills. This is evident since, statistics indicate that, from 1981 to 2001, the number of people surviving on less than $1 dollar per day decreased from 1.5 billion to 1.1 billion. The reduction was more significant in the developing countries, (WTO, July 2008).

Challenges of globalization to national governments

National governments experience many challenges stemming from globalization process. Some of these challenges are examined in this section.

According to Wijen, F. et al (2005, p274), the unequal distribution of benefits and costs poses a great challenge to development of the low and medium income countries. They export primary products that are of much low value than when processed. This has often led to worsened levels of economic uncertainty, increased poverty and vulnerability.

Globalization enhances increased participation of the private sector in international trade. Such actors require rules of operation, unrestricted access to imports, efficient social and economic infrastructure, and stable macroeconomic environment, all which are to be provided by national governments. (United Nations, 2000 p 18)

There seems to be a shift in control of nations’ economies from the governments of sovereign states to other entities such as nation states, multinational organizations and international organizations. In this sense, national sovereignty seems to be undermined in the process.

Globalization has reduced the power possessed by national governments since they have no power over technological flows and national currencies.

Due to globalization, many nation states have lost monopoly power that they ought to enjoy within their borders. This is due to increased participation of private enterprises in global finance, industry and trade without the cooperative decisions of national governments, ( Pfaller, A & Lerch, M., 2005 p. 93).

Strategies by governments to mitigate the challenges

Many governments are formulating policies in reaction to the increasing challenges posed by globalization and also with a view to exploit opportunities arising due to globalization for future economic growth. Some of these strategies are;

Adoption of gradual and selective financial approach to financial (as in china’s case), integration so as to avoid risks of banking and currency crises.

Attraction of high value investments by global high value industries, as it has been done by irish governments. (National Research Council (U.S.) Committee on Globalization of Materials Research, p 24)

Support of development of high quality products and services through educational support, training, maintenance of competitive tax and macroeconomic environments among other ways. Ireland is a good example that has succeeded in this area.

Most governments have increasingly invested in science and technology in areas of research, innovation and technological development.

Improvement of market access for processed agricultural products from their countries by low income countries. They have proposed to reduce tariffs on exportation of such goods and provide subsidies to their production. This will enhance increased participation and rise in benefits from the processed products than when exporting the primary products (World Bank, 2007 p. 8)

The impact of globalization on Toyota Company

Toyota Company is one the leading manufacturers of motor vehicles in the modern world in fact it has taken the leadership over other similar companies in its field over the last several decades. Recently, this company which is based in Japan has become one of the most influential actors in the world market, (Toyota Mortal Corporation, (2004, p. 1),). This company owes its international market expansion to the process of globalization. The relaxation of trade barriers across national borders has greatly supported this company just as many other large companies in the world. Consequently, this company has entered into new markets especially in the developing countries. It has been able to open factories to manufacture and assemble cars in all continents and in different countries. Toyota has established some of its branches in the following countries: K, France, Poland, America, Venezuela, Philippines, Pakistan, India, Malaysia, Thailand, Argentina and Mexico among others. Due to reduction of financial barriers, Toyota Company is able to supply its products to the local markets in those countries,( Toyota Mortal Corporation, 2004, p. 1).

Due to the minimal financial barriers, Toyota Company has been able to develop a production chain within different countries, making it possible to reduce the costs that could be associated with transportation of its products across borders. As a result, this company has been able to significantly reduce overall costs of availing its products to the customers, (Toyota Mortal Corporation, 2004, p. 1). This has enabled the company to reduce the prices charged to its products. That way this company has attained a competitive edge when new opportunities arise. For example, due to globalization, Toyota Company was able to develop and find ample market for Toyo corolla and Toyota Yaris in Europe and Africa. In US, this company dealt with SUV model which got significant demand.

According to Toyota Mortal Corporation, (2004, p. 3), the integration of Toyota company in the global economic trade has led to development of ethical problems. This is caused by the fact that the Toyota corporate culture is defined by the Japanese culture. This culture is sometimes not accepted by employees working in other countries especially the western states. At the same time, Toyota Company faces a threat to its traditional image, (Toyota Mortal Corporation, 2004, p. 3). As this company expands internationally, it results in building of plants and employs personnel especially in the third world countries. This threatens the traditional view of Toyota as a reliable company manufacturing vehicles of high quality. To avoid this, this company needs to set up an effective system of management throughout its chain of production.

Conclusion

To conclude, globalization, as it has been seen from its definition is not an economic phenomenon only. Instead, it is a wider concept manifested by political, social, cultural and technological integration of individuals, societies and economies all over the world. Globalization enhances connectivity, interdependence and integration of the world society in the global age. Though they sound more theoretical than practical, there are many benefits of globalization as disclosed in this discussion. The challenge is thus left to individuals, corporate and national governments to make this process a reality. However, as they do so, they need to bear in mind the costs associated with this phenomenon. Evidently, the less developed countries are the affected in this case as they try to catch up with the developed nations.

Though it poses challenges to national governments, it is good to recognize that the world will continue on its way to globalization. Therefore governments should continue to play their role in shaping the future of globalization through establishment enlightened policies and strategies. However, to cope with the challenges of globalization, it doers not require the hand of a government alone. Rather, individuals, and firms need to play their part as it has been seen with the Toyota motor company. Therefore, with more co-operations, globalization can be more beneficial than costly in the long-run to any segment of the world society.

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