Globalisation

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 Table of Contents

Topic Page No.

1. Definition………………………………………………………………..3

2. Impact of Globalisation………………………………………………3

3. Political Globalisation………………………………………………..4

4. Cultural Globalisation………………………………………………..5

5. Economic Globalisation……………………………………………. 6

6. Conclusion……………………………………………………………..7

7. References…………………………………………………………….8

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Definition

Thomas Hylland Erikson in his book ‘Globalisation: The Key Concepts’ defines that

“Globalisation refers to transnational connectedness and encompasses important

economic, political, cultural, and environmental dimensions. It creates new

opportunities and constraints, possibilities and vulnerabilities. It ranges from climate

change to terrorism”.

Globalisation is a diverse term. It can have contrasting definitions when used in

terms of business, ideology and culture. Globalisation encourages countries to

exchange goods and services in order to be enriched economically, scientifically and

culturally, thus touching people lives. Globalisation is dominated by economic and

technological processes.

Globalisation can also be explained as the process of intercommunication among

people, companies, and governments worldwide which, in turn, influence cultures,

economies and the general way of living for common people. Globalisation has

accelerated due to advancement in technological processes in communication such

as Internet. This vast increase in global exchanges has caused meteoric growth in

international trade.

Impact of Globalisation

Today, if anyone takes a walk at Oxford shopping street in London, they will

encounter stores such as Spain-based Bershka, Japan-based Muji and British Marks

& Spencer which has products from famous international brands such as Louis

Vuitton, YSL, Burberry, and Chanel. If in need of coffee, one can stop at US-based

Starbucks.

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Skripak et al. argue that “The globalisation of business is bound to affect you. Not

only will you buy products manufactured overseas, but it’s highly likely that you’ll

meet and work with individuals from various countries and cultures as customers,

suppliers, colleagues, employees, or employers.”

Let’s breakdown and try to understand globalisation in different perspectives.

Political Globalisation

Political globalisation encourages governments to be a part of global institutions

(such as United Nations, North Atlantic Treaty Organization (NATO), European Union

(EU), World Trade Organization (WTO), Group of Twenty (G20), etc.) and

mandatorily follow its ideologies. It can be environment protection, human rights,

trade or an international crisis. For an instance, right now in case of Ukraine-Russia

war, the world economy is massively affected by it. Various countries have severed

their ties with Russia thus causing energy prices to soar up across Europe and UK.

The food supply has taken a hit, in turn, enabling developing countries like India

fulfilling the demands of various countries. Hence, political globalisation makes

governments more interdependent, at times interfering in domestic politics.

Another noteworthy example is social media giant Facebook being accused of

influencing elections and spreading hatred ideologies of extremist groups.

Positive impacts:

 Provide international aid and financial support at the time of crisis.

 Help in maintaining world peace. Minimise threat of invasions by powerful

countries.

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  Enable smaller countries to collaborate and become more influential

internationally.

Negative impacts:

 Sometimes these organization may not follow the democratic way of a

decision-making process.

 Big countries may dominate smaller countries’ decisions.

 Sometimes bigger countries can veto decisions and disrupt internal harmony.

Cultural Globalisation

It refers to the process of exchanging values, ideas, cultural and artistic aspects. In

the era of Internet, people can connect more easily with each other. One can travel

almost all parts of the world and have the knowledge of different customs and

traditions with a click on the keyboard. Millennials can be seen getting influenced by

different global cultural norms and trends. For e.g. TikTok and Instagram reels

becoming viral worldwide.

Positive impacts:

 Access to new cultural artforms. 

 Better cognizance and sometimes adaptations of foreign values and traditions.

 Better understanding of foreign vices and try to learn from it.

 Promote one’s own culture and values globally.

Negative impacts:    

 Westernization or blindly copying of other cultures.

 Some small countries may lose their cultural significance.

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  Following dangerous or violent ideals (such as ideologies of the terror group

ISIS).

Economic globalisation

The direct impact of globalisation can be seen through its effect on economy of a

country. In today’s times we can see that apart from US, UK and Europe, China, the

world’s largest manufacturer, and India are on the verge of being the next

superpower. This exponential growth of economies is a result of globalisation.

Technology has altered the way businesses operate.

Jahan et al. mention that “Monahan (2013) identified that technological

advancements and globalisation are interlinked with each as globalisation is

facilitated by the technological advancement and globalisation is facilitating the

companies to adopt new technologies. He continued by arguing that globalisation

urges the companies not only to keep themselves competitive by achieving the

economies of scales but also to develop innovative products and services for the

customers.”

In the same paper, authors also emphasize that advance technological processes

not only impact the profit of the company but also influence all the stages in the

production. Such as managerial efficiency, resource allocation, supply chains and

quality of customer services.

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The authors also identify that globalisation encourages competitiveness in the

international market as the customer now has more options from local as well as

foreign brands, thus forcing the companies to produce better goods.

Positive impacts: 

 Products/Services available at cheaper prices.

 Better quality of products/services available.

 Reach of products scale up to different countries.

Negative impacts:

 Sometimes, foreign companies may exploit a local country’s market.

 Multinational companies may eat up the profit of local companies.

Conclusion

At times, globalisation can be a boon. Such as, it has made India the preferred

destination for IT outsourcing, thus giving large population of its youth lucrative jobs.

It has also encouraged start-up culture in various countries. Globalisation has given

strong encouragement to entrepreneurship, which has been a catalyst in solving

various world problems ranging from technology, health, space and environment. It

has boosted economies of various poor countries and given them representation on

world map. It has provided a platform to various socio-cultural traditions of a country

but sometimes also caused homogenization of distinct cultures. Time and again, it

has given voice to the youth to express their opinion on varying world issues and

sometimes disoriented the youth (like ISIS). In a nutshell, globalisation cannot be

overlooked. With the increase in benefits of globalisation, a proper standardisation

method should also be adopted to make the world a stable place.

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References:

 Eriksen, Thomas Hylland. (2014) Globalization: The Key Concepts. United

Kingdom: Bloomsbury Publishing.

 Skripak, Stephen J. and Ron Poff (2020). Fundamentals of Business, 3rd

Edition, Blacksburg, VA: VT Publishing. [Link]

Licensed with CC BY-NC-SA 4.0 [Link]

sa/4.0.

 Jahan, S., Alrajawy, I., Ali, S.A. and Martin, P., (2021). ANALYSING THE

IMPACT OF GLOBALISATION ON BUSINESS PERFORMANCE: CASE OF

UAE FOOD INDUSTRY. International Journal for Quality Research, 15(2).

667. [Link]