Question

Discussion 1.2: Worldviews

For this discussion, you will be using your readings and additional research to develop your own personal worldview on globalization and trade. You need to analyze the impacts of economic, political, technologic and legal implications in the development of your worldview. Provide examples to support your viewpoint along with a cost/benefit analysis of the ramifications of global trade on corporate stakeholders.

Answer 1

Globalisation essentially indicates that there is interdependence between the various economies across the globe. This broader term can imply a transfer goods and services, technology, information and investment among nations. The level of integration has been on a rise as indicated by the World Bank data which indicated that over seventy per cent of the world GDP was because of trade. Globalisation can be seen as having its own advantages and disadvantages. However, recently there have been instances of anti-globalisation, one example of this is Britain leaving the European Union.

One advantage of globalisation is the benefit due to large scale operations also known as economies of scale. Economies of scale helps in reducing the prices and leads to economic growth in all nations alike. Globalisation is seen to have various impact on the economies alike, it can be seen that there is a decrease in poverty mainly because there is an increase in investment and trade.

A prominent impact of globalisation is the expansion of markets. It can be seen that companies like Coca Cola now have to consider the tastes and preferences of consumers across the world while producing commodities. Globalisation also has an impact on the power play between nations. It was seen that before globalisation, the United States of America was seen as dominating the export market but now with the advent of globalisation, countries like Germany, China have replaced America.

Globalisation's impact on the political front can be seen in two ways. On the on hand, globalisation has increased the inequalities among nations and on the other hand, there has been a change in the power play among nations. Globalisation has also led to a faster spread of knowledge and information among the nations. Technological progress is good for any economy as it improves the standard of living in that economy. If the technological transfers between China and the rest of the world are monitored, it can be seen that there is a growing trend of both inflow and outflow of technology, which is possibly one of the reasons contributing to the growth of the economy.

One of the harmful impacts of globalisation is its impact on the environment. With the increase in trade, environmental degradation also seems to be on a rise. Other adverse impacts include currency fluctuation as well as instability in the prices of goods and services. There is also a fear that prevails that globalisation may lead to loss of jobs . This can be seen with an example, that is, because labour is cheaper in the developing countries like India, there may be establishment of industries in the developing countries which could lead to job losses in the developed countries.