Globalization provided score to these large companies to operate with full capacity, which helped them to reduce cost further (Rugman, 2002). Transferable marketing – When due to globalization marketing mix elements are used in many countries without considering their local aspects, it is named as transferable marketing (Campell et.al., 2004). For instance, in countries where the environmental rules are not strict, the developed … Globalization has positive effect on some stakeholders and negative effect on some others. Before globalizing economy a country should understand it clearly that how it is going to take benefits out of globalization and it should be ready with a contingency plan. Inequality has also increased in terms of skilled jobs. Actions which would seem to … Removal of Protection Earlier when where no such health facilities were available people used to consume homeopathic medicines but now on one side where the health facilities have improved a lot the fear of fast spread of transmittable diseases have also increase (Lane, 2006). One of the interesting effects of globalization that bodes well for small businesses is the rebirth of local industry, Product labeling that identifies a product's country of origin has heightened consumer awareness of the extent to which foreign-made goods have replaced those made in America. When people enters into a new environment he may faces several types of health problems, because of change in environment. As American companies become interdependent on foreign markets and workers' recessions in those marketplaces can negatively affect the American economy. Before reaching on a conclusion, each globalization driver should be analysed properly. She has worked in accounting for such corporations as First Data, MCI and Verizon. Where globalization has some positive effect, it does have negative effect. Humans tend to pick new and correct things from other cultures and drop the flaws in their culture. Thus, we can say that employees are paid as per their market worth and not as per what they actually deserve. If you need assistance with writing your essay, our professional essay writing service is here to help! This can be seen with many customer service … When it goes on multinational level it forces company of that industry to go global, which works as a stimulus for globalization (Campell et.al., 2004). 2. This was an opportunity for financial services industry, which it utilized and went on international level with the help of globalization. 2. Competition has put pressure on investment bank, banks and non-banking financial companies to create and provide sophisticated financial services to their customers. In this study, we intend to ransack files to see how the on-going process of globalization has positively contributed to the growth of world … Even after that it doesn’t mean globalization only has positive effects; it does have negative effects on business. But these services do need continuous development of high end services, which cost a lot. Globalization gives birth to the cut-throat competition which results in the early closure of many Institutions. There is no doubt that some countries in the world still don’t have intensive banking system. Where in some countries it is intensively used, in some countries financial services are still the in the infant stage. Some of the consequences of liberalisation have been briefly described here: 1. Shipping products overseas, delays in information or financial reporting can reduce any financial savings and sour relationships with customers. Due to this, prices have come down, employment has increased, and life standard has become better. Positive effects of globalization 1. However, the suppliers of financial services industry are not as affected as the suppliers of the other manufacturing industries. It points out the rising level of dependency between countries in term of cultural, military alliance, trade, and domination. Competition – To globalize their economy countries opened their market for foreign companies, these companies were large and were using high technologies. Business process outsourcing is good examples by which services are delivered form the location where the productivity is maximum. In short, it refers to the economic growth of world trade and investment. Their needs may vary in term of frequency and quality, but have same kind of requirements. There are many companies to serve the market for financial services for different needs, but no single company has the dominance in the financial services industry (Globaledge, 2010a). It used to be that if you didn’t have this connection, then there was no way you could access buyers and suppliers halfway across the world. Over the long history of the idea, it’s been called a necessary, even inevitable, process that will cure all the world’s ills, if only we embrace it. Today one can go around the world for best learning and training facilities. Globalization is a widely used term in different contexts. When companies moved from one country to another, they also shifted their people and trained people from that country to get their work done (Carbaugh, 2008). Similar customer needs – Similar customer needs indicates that in a global industry the customer from different countries share common needs. To recover this cost industry tends to go global, which was also a reason behind the globalization of financial services industry. "N2Growth"; The Impact of Globalization on Business; Mike Myatt; May 2006, The Kansas State Collegian: 3 Negative Impacts of Globalization n the United States, Westford University College: Positive and Negative Impacts of Globalization. The business world has thus learned to be aware of technological changes that can affect their productivity and also positively or negatively impact their very survival. Customers – The user of financial services are benefiting from the competition in the financial services industry. The collapse of the United States economy opened the opportunity for foreign companies to purchase interests in American companies. Globalization has both positive and negative effects. By globalization not only the companies were able to get economies of scale but also the consumers. Impact – Third World In analyzing the impact of globalization in 2006, the World Bank found that the richest one-fifth of the world’s population possesses about 80 per cent of the world’s income, while the poorest one-fifth in the Third World owns a mere 1 per cent of global income. It is possible to study online and achieve a degree without having to relocate to a foreign state. Later on countries formed groups according to their trade needs like OPEC, NAFTA, etc. Host government policies – The entry of foreign companies was restricted earlier but when countries understood the value of foreign investment of infrastructure development, many countries opened their economies for foreign investment. Some of the negative impacts include: Globalisation operates mostly in the interests of the richest countries, which continue to dominate world trade at the expense of developing countries. Financial services can’t be possible without a proper transaction system around the world, as different countries have different currencies. If one is interested in the subject that is not available in the country, one can go to the country for learning that indigenous subject and spread the knowledge in one’s home country. Scholte is Professorial Research Fellow in the Centre for the Study of Globalization and Regionalization. Some financial conglomerates like Citi Bank, HSBC, are providing same services to their customers. Today the culture, in which we live, is the contribution of many cultures. Increase in the Direct Foreign Investment: The policy … Financial services are utilization, manipulation, management, storage, and creation of money. International trade needs currency transactions, which is not possible without global financial services. Spread of Education – Education is the best positive effect of globalization. Yip (2003) defines global customers in two ways. It also has the potential to create a “global domino effect,” which could cause a recession throughout the world. In this way, the developed and advanced countries get a large share of market for their products (Boudreaux, 2008). There are many more jobs available to people, and as technology advances, the chances for more people to be trained in new jobs rises accordingly. To serve this purpose financial services industry has to adopt globalization, which strengths the competition drivers. Encourages producers and consumers to benefit from deeper division of labour and economies of scale. High will be the competition higher the companies or industries will go for global business. Most of the countries have their own rules and regulation for monitoring the flow of money, out the country and investment in the country from abroad (Dunning, 2001). Negative Effects of Globalization to Environmental Damage: Negative effects of globalization have led to an increase in production to meet global demands, resulting in the exploitation of natural resources, having a negative impact on the environment. Study for free with our range of university lectures! Because of their increasing influence the domestic companies also searched for innovative and better technology for reducing cost (Carbaugh, 2008). The reasons behind are the development of the software and the innovation of the new financial product and services (Campell et.al., 2004). Technological improvement is also possible by to running R&D programme in collaboration with big companies and by providing training to its people (Tanzi, 2004). Causes E nvir onmental D amage. A company considering outsourcing a service needs to look at all related expenses and possible risks associated with having it done overseas. Globalization has also increased the gap between haves and haves not. NEGATIVE IMPACTS OF GLOBALIZATION 1. It’s not the developing countries who has benefited from globalization, developed economies have also enjoyed the fruits of globalization. Reviewed by: Hashaw Elkins, MSPM, PMP, CSM, CSPO, PMI-PBA, LSSBB. Skilled labor is paid differently in different countries by the same company. Spread of Diseases – Globalization helped first mobility, due to that unknowingly diseases are spreading very fast from one country to another (www.darkseptemberrain.com). One of the most common complaints against globalized businesses is that it leads to unfair payment of wages and salaries. Traditional labour intensive technologies were based on low power and machines, so the pollution was not an issue from those industries. It is not always that everything has positive effect on all related things. When companies stop seeing their personnel as a business investment they create long-term problems for short-term savings. *You can also browse our support articles here >. It the human being who has created this global phenomenon, so he can also control it and use it for the betterment of the world without any discrimination. The developing countries are always taken advantage of by the developed countries. Use of information technology and plastic money has played a significant role in the globalization financial services industry. Competition also forces industries to go global In search of new markets for their products. The big financial companies develops innovative services and technology use that in all the countries where are the present. Economic, political and social unification was expected from globalization. Listed below are some points that highlight the positive and negative impacts globalization in education has led to. By this way globalization is a catch all, malleable concept which can be interpreted the way user wants (Scholte, J., 2000). The overall evidence of the globalization effect on macroeconomic volatility of output indicates that although direct effects are ambiguous in theoretical models, financial integration helps … A global company or an industry need to satisfy some important characteristics for it. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Yip in his framework explains the factors behind the globalization of business. It is also helpful to understand markets’ or industries’ different aspects. Investing in foreign companies creates a global interdependency that can stabilize the economy on a temporary basis. Increased production means more natural resources are used and this can be used up before they are regenerated leading to a negative impact on the environment. The member countries of WTO opened their economy for increase world trade and free market. Boosts Export – Globalization helped in two ways to boost export; first by free capital flow, and open market for increasing operation. Like any other thing globalization also has both aspects which are bad and good for mankind. But what exactly does globalization mean for business? Financial services are very important for every kind of business. Yip calls these factors, drivers of globalization and divides them into four categories. Most economists argue that the positive effects of globalization are more than the negative effects (Future-econ, 2009). Suppliers – Suppliers have to provide fulfil their customers need if they want business from them. This helped companies to operate easily in many countries, as they could change the currency as per their choice to get it out of the country. 8 Ways to Fight Globalization's Negative Impact on Your Job Search In an increasingly globalized world, how can you put yourself in the front running for the top positions? In today’s post, I’ll look at the impact of globalization on business. Use of capital intensive technology also helped to reduce production cost, but most of the benefits were retained as increased profit by the manufacturers. Financial services have strong relation with other industries, so when those industries go global financial services industry also has to global to provide the services. Power reallocation … According to U.S. Customs and Border Protection, escalated U.S. tariffs on Chinese imports raised $20.8 billion through mid-July 2019. has played a significant role in promoting globalization, as it is the sovereign body of any country. Globalization has played a vital role in the development of international business. Negative Effects Of Globalization On Business. High product development costs – Financial services unlike product manufacturing doesn’t required much expenditure on production. Globalization has influenced the growth of employment opportunities since many companies have set up businesses all over the world. For example, wages and manufacturing costs are lower in India and China, making countries like US and UK to outsource cheaper labor. The study of globalization and its impact to global economy and governance is one of such areas of expansion. Student exchanges are of great value for both of these groups. Globalization has helped to remove poverty form the developing countries, in 1980 – 2001 people living on $1 or less than that per day has come down 1.1 billion from 1.5 billion (Burande, 2007). Also Study: Impact of Globalization on International Business Strategy. There are growing numbers of consumers who actively seek products that are Fair Trade or otherwise certified as free from exploitative or unethical practices. Some dictionaries define globalization as ‘the act of globalizing’ or ‘to render global’ (Waters, 2001). Many jobs performed in emerging countries for less cause a decrease in the wages offered in developing countries. Here are a few positive and negative effects of globalization; The top 10 best countries to do business in Africa 2020. Competition increased with the entry of new companies in the market. That is also a reason for globalizing the financial services. has to introduce some restriction and define transfer modes to keep check on flow of money. Because in the construction industry, there is some standard code of conduct which are being adopted by Bangladeshi construction firms. Economics Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. Better Uses of Resources – Resources are scare but still the countries were not able to utilize them efficiently, in the lack of technology. This was possible because of globalization of financial services and financial industry. It has both positive and negative effects in social, political and economic terms and also on the environment, which is a complex issue with many contributing factors. Country specific costs – Cost of financial services are near about similar around the world. Having said so, it is obvious that the impact of globalization has been both positive and negative in the sector of education. Global Competitors – Global competitors have more power to compete with local companies as they can get profit from other countries where the competition is not as high as in that country. Many companies offer their services globally to expand their market, or they use services from overseas to decrease their costs. Globalization has brought benefits in developed countries as well as negative effects. Negative Effects of Globalization. In general, globalization has been shown to increase the standard of living in developing countries, but some analysts warn that globalization can have a negative effect on local or emerging economies and individual workers. Plastic money has made transaction easy which carrying cash. The other cultural forms like movies, music and art are also affected by globalization. Most of the countries are enjoying modern and advanced technologies for financial transactions. There are few companies who have the credit or debit card ownership. This video explains the impact of globalisation on people, communities, countries and corporations around the world. But, strong and developed economies continue to exploit underdeveloped and developing countries on the name of business sharing. Labor laws that protect workers from exploitation and mistreatment are almost non-existent in some emerging countries. When a country opens its economy for multi-nation companies, it considers negative and positive both aspects. A global industry takes advantages of environment and satisfies customers’ needs and wants around the world. Global warming is also a part of global economies. A company’s negative public reputation in how it treats its employees, even if they are overseas, can cause a loss in customer support of products. VAT Registration No: 842417633. It shows the depth of globalization in financial services industry. Yip’s framework on globalization driver is very useful for analysing the level of globalization in an industry (Yip, 2003). The Positive Effects of Globalization and Technology on Business Tz-Han Chen ILSC Toronto Since 2007s, business has been influenced by globalization and technology deeply, and the huge scale of global market and convinced network service have been built by it. This could potentially harm the image of a company that outsources services from a foreign company that exploits children or the rights of their workers. The negative effects of globalization can be studied as follows: 1. Govt. Th… Governments – Govt. Global compression reminds the dependency and system theories’ arguments. High imports and exports – Import or export what the way an industry is running business, it is connected with other countries. Languages, cooking styles, customs, and dressing styles all have spread from globalization. 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You can also browse our support articles here > jobs performed in emerging countries for less cause a recession the! Will feel less appreciated and put forth less effort in their countries but the development... Of any country factors, drivers of globalization which carrying cash compression reminds the among... Domino effect, ” which could cause a recession throughout the world still don ’ t try to define precisely! Defines global customers in two ways labour reduce significantly is believed that globalization led! Nottingham, Nottinghamshire, NG5 7PJ easy which carrying cash citizens of the language.... Was possible because of their increasing influence the domestic companies also searched for innovative better.
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