On one hand, international service companies will increase the original price of the company, mainly because to the original demand, now one will also need to add the additional charges of the international service companies, acting as intermediaries. However, on the other hand, it is more viable for the original producing companies to outsource, due to a lower opportunity cost.
Again, this type of judgment is functional in a non-transnational economy as well, but in an international context, one tends to have an atomicity of potential international service providers, outsourcing can be extended virtually to no limits and, additionally, the overall costs of the producing company are likely to be much smaller. As shown, this only works in an international capitalist system, where supply and demand work freely on the market, only then is the producer looking for the lowest costs for his company in a global context and only then will he be determined to make the best choices in this sense.
On the other hand, the supply chains also enter the same judgment in an international context. As the mechanism and the composite actors and entities that take a product or service from its producer and deliver it to its final consumer, supply chains exist in the national as in a global framework. The reason and explanation for their existence is similar to the one use in the previous paragraphs when referring to the international service: in a (global) capitalism, competition and the forces of the market drive economic entities towards achieving the best performances for the company they lead.
In following this goal and approach, companies use the free market and the available global opportunities to provide the best solutions for their goals. At lower prices, driven down by the existing competition in the international market, producing companies are able to get their products to their customers at higher efficiency rates, eventually...
Again, all available in a global capitalist system, without which the existence of both international service and international supply chains would be redundant.
In a nutshell, globalization is a growing force which retrieved both disclaimers and advocates across the globe. Whereas it helps organizations get increased access to resources, all including capital, labor force and technologies, it is also blamed for widening the income gap and granting far too much power to corporations; disclaimers often point out that corporations tend to sometimes have more power that state governments (the Economist, 2001). But globalization is directly linked to capitalization of international economies. "Industrial capitalism emerged historically in the UK with the Industrial Revolution, and was subsequently transplanted first to western Europe, North America, Australasia and Japan and then to the rest of the world. In this process, capitalism has released and developed the world's productive forces. Today, it has achieved an unlimited capacity to produce, diversify, improve and exploit both human and natural resources. As a consequence, the world is becoming richer in capital accumulation and material goods but, paradoxically, poorer, with increasing human miseries and environmental deterioration. In a capitalist system of production, the latter is an inevitable consequence of the success achieved in the former" (Maitra, 1997)
References
Maitra, P., 1997, Globalization of Capitalism, Agriculture and the Negation of Nation States, International Journal of Social Economics, Vol. 24, Issues 1/2/3, pp. 237-254, MCB UP Ltd.
Mehmet, O., 1996, on Globalization and Capitalization, Managerial Finance, Vol. 22, Issues 5, pp. 31-40, Barmarick Publications
May 2, 2002, Globalisation under Scrutiny, the Economist
September 27, 2008, Globalisation and Its Critics, the…
