Learning Journal on Globalisation

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Managing Across Culture III

Done By:

Boh Zhuang Yi, Renee                                                                A1714665

Learning Journal Selected: Tutorial 4 – Cross Cultural Communication

Lecturer: Mr John Knight

Date of Submission: 18th June 2017

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“One of the fundamental questions of today’s world is undoubtedly the question of equitable globalisation.” - Janez Drnovsek. (A-Z Quotes, 2017). Globalisation is the process of deeper integration of markets in the global economy, leading to the increased interconnectedness of national economies. As a result, globalisation has increased the production of goods and services and it leads to massively increased trade and cultural exchange between countries. Subsequently, it leads to biggest companies are no longer national firms but multinational corporations with subsidiaries in many countries.

Globalisation is not just a recent phenomenon and it has been taking place for hundreds of years, but today’s commerce is far more developed and deeply integrated than they were at that time. 

Globalisation has resulted in:

• Improved standard of living
• Increased international trade
• A company operating in more than one country
• More wealth to local economies
• Free movement of capital, goods, and services
• Cultural exchange and contact

There are several key factors which have influenced the process of globalisation. Containerisation, technological change, economies of scale, differences in tax system, less protectionism are some of the most important globalisation drivers outlined. (Appendix 1.1).

Globalisation is one of the major reasons for the expansion of transactional and multinational corporations (TNCs) in the global economy. By setting up factories and businesses they are spreading information and businesses around the world.

It turns out globalisation is good and not just for the rich, but especially for the poor as mentioned by Robyn Meredith and Suzanne Hoppough. (Forbes.com, 2007). One of the article have provided the economic impact of globalisation on developing countries. The booming economies of India and China–the Elephant and the Dragon–have lifted 200 million people out of abject poverty in the 1990s as globalisation took off as stated by International Monetary Fund. Countries such as India and China have embraced capitalism in the new millennium and opened up free trade, private entrepreneurship, income inequalities, and at least a decent minimum of property-rights protection and other aspects of the rule of law to foreign investors which has created an explosion of growth in their economies. (Sorman, 2015).  Emerging nations such as BRICs —Brazil, Russia, India, and China lack of access to capital and opportunities to learn new skills. Thanks to globalisation, foreign investment has also brought new jobs and provide opportunities for the poor to extricate themselves from poverty around the world.

Conversely, globalisation can create new opportunities, new ideas, and open new markets that an entrepreneur may have not had in their home country. It creates greater opportunities for firms in less industrialised countries to tap into more and larger markets around the world. This can lead to more access to capital flows, technology, human capital, cheaper imports and larger export markets. In addition, it allows businesses in less industrialised countries to become part of international production networks and supply chains that are the main conduits of trade.

Globalisation seems to appears “good” in most part. As globalisation has helps to increase trade and improved the living conditions for people around the world. Globalisation can also be reflected in either a positive, or negative way. According to Panos Mourdoukoutas, the bad side of globalisation is all about the new risks and uncertainties brought about by the high degree of integration of economic markets, intensification of competition, high degree of imitation, price and profit swings, and business and product destruction. (Forbes.com, 2011)

Gail Tverberg also claimed that globalisation is not living up to what was promised and in fact it is causing major problem due to one of the reasons which it transfers jobs from developed countries to less developed countries. It levels the playing field, making it hard for developed countries to compete. A country with a lower cost structure providing cheap labour is able to out-compete a typical OECD country. For example, in the United States, the percentage of US citizen with jobs started dropping about the time China joined the World Trade Organisation in 2001. (Economy, 2013)

From all the case above, we can determine that the benefits of globalisation are not universal. The rich are getting richer and the poor are becoming poorer. Some of the negative impacts are also included in (Appendix 1.2).

The article also focuses on anti-globalisation. Anti-globalisation is a stance which directly opposes the negative aspects of globalisation. It emerged with the aim of combating the globalisation of corporate economic activity and all exploitation of developing nations that could result from such activity.