The Pro's and Con's of Globalization

Résumé du document

Globalization gives companies access to new markets, thus facilitating a process wherein one can choose to produce, buy resources or sell in different countries according to their specific attributes.

Multinational company outsourcing creates jobs in countries where the wages are lower compared to the country where the products are manufactured. Both the new employees and the company benefit from this situation as the company saves money and the workers can avail of pay packages in tandem with the current industry rate or even one that exceeds the average.

Paul Glewwe's study shows that Vietnamese people working in foreign –owned companies are often paid twice the average salary. If we think about it, we realize that the savings enable the company to be more competitive on the global market, and thus earn more profits and develop itself. Development of a company is often synonymous with hiring, which can be executed at the headquarters of the company or in any country where the company runs its operations.

Outsourcing is a type of foreign direct investment that economically strengthens the country receiving the money. The choice of the countries where the companies invest depends on the trust the companies have in that particular market: the political situation and the business opportunities. Countries do everything in their power to gain political stability and create economic advantages such as lower taxes for foreign companies on their soil.

In 2006, the most significant flows could be observed between the European Union, which received €421 billion in 2006 according to the CNUCED, the United States, €136 billion, (the same year) and Japan. Tradewise, they constitute the leading countries or region; China (€54 billion in 2006) is positioned fourth. Trade agreements between countries such as the European Union (EU) or the North America Free Trade Agreement (NAFTA) encourage foreign direct investment as a firm in a country A is more likely to invest in country B when both A and B conclude agreements on tariffs regarding raw materials or manufactured goods.

Extraits

[...] Growth reduces poverty and improves the living standards. Globalization create great business opportunities and is a chance for the people of developing countries as it brings employment, worldwide interest of their cause all this under international observation. Con's Worldwide influence and abuses Companies and poor countries governments are happy to grant the best conditions to export produce in poor countries but sometimes exploitation, unfair trades or abuses go on despite the settings, the laws and the control of the corporations or non governmental organizations. [...]

[...] In the Netherlands, local TV only shows English speaking movies leaving behind the Dutch creation. Aware of this, the French government has introduced the “Exception culturelle française” which allocates subsidies to the French movies and promotes the French culture around the world. The wealth enable them to make people dependent, they distribute their products everywhere imposing a way of life and putting the hand over the local cultures. Conclusion Growth thanks to jobs creation, competition, a worldwide market, profits and development thanks to the increase of the purchase power of charities and of non-governmental organizations observation makes globalization the best thing that happened to the human kind since the Human rights declaration. [...]

[...] They constitute the trade leading countries or region. After them China 54 billion euro in 2006 is the country receiving the most foreign direct investment. Trade agreements between countries such as the European Union or the North America Free Trade Agreement (NAFTA) encourage foreign direct investment as a firm in a country A will easily take the decision to invest in country B when both A and B have agreements as no tariffs on raw materials or on manufactured goods. [...]

[...] The aim of this paper is to show the pro's and con's of globalization. I will describe the effects of globalization over the world thanks to articles and research on the subject. Globalization has created business opportunities in the western world, which is also an advantage for the developing countries that have put in place a layout to encourage corporations to invest. Even if the international phenomenon has shown that exploitation, abuses and strong influences of the leading countries, it remains unavoidable. [...]

[...] They exercise a kind of monopoly as John Kenneth Galbraith explains in his assertion (Bhagwati, 2007). Small poor countries aware of their quality and skills put in competition companies of a same business field after what the governments take the lead in the negotiation. Unfortunately bribes can be involved at this stage. The example of the influence of Pepsi and ITT on the Chilean government explained by Jagdish Bhagwati (2007) shows that companies have a stake on a market if the government is not suitable with their activities and how they lobby for change. [...]