Globalization's effects on firms, consumers, and society

¶ … Globalization

In the past few years, globalization has sparked a revolution in information and communication technology, dramatically and irreversibly changing society and civilization. As a result of globalization, new levels of interconnectedness between countries previously thought unimaginable have emerged. Globalization has been defined as the development of extensive worldwide patterns of economic relationships between nations, and the generalized expansion of international economic activity which includes increased international trade, growth of foreign investment, international migration, and increased creation of technology among countries. In other words, globalization is the increasing world-wide integration of markets for goods, services, labor, and capital. This paper will discuss what globalization is and why it is important to domestic firms and the individual consumer. It will also analyze the ways in which globalization is a benefit and how it can operate as a threat. Finally, it will conclude with a discussion of the manner in which globalization affects a society's beliefs, economy and politics.

Importance of Globalization to Domestic Firms and the Individual Consumer

Globalization is important to domestic firms because it allows them the opportunity to expand into international markets, thus growing their business and increasing their revenue potential. It gives domestic firms the opportunity sell their goods online through ecommerce worldwide, without having to establish a company in a foreign country. Domestic firms can also set up factories overseas and outsource the production of their manufactured goods, at a much lower price than before. Outsourcing also benefits the foreign country that the goods are outsourced to, because it creates previously unavailable jobs in poorer countries. Globalization affects the end consumer because people in other countries are able to make purchases online without having to travel to another country. Through the Internet, the domestic consumer now has the opportunity to purchase foreign products and goods not previously available to them. Technology has also allowed for the rapid shipment of goods between countries, connecting countries through global commerce.

Benefits of Globalization

Globalization has many benefits; a majority lying in the areas of technology and communication. For example, the technological advances offered by the Internet have come to serve as a bridge between cultures and countries. The Internet is available worldwide at fairly low prices, enabling even some of the poorest countries to have widespread access to the Internet (McChesney, 1998). This operates as a benefit to more advanced nations, because the hegemony of media giants and advertisers will soon end, and be replaced by a wide-open, decentralized, diverse, fast-changing, and competitive media culture lacking the requirement of government regulation (McChesney, 1998). In addition, the Internet and digital communication have had a significant impact on education. Students everywhere benefit from the research tools and resources available online; educational technology has positively impacted student achievement. For example, in studies of large-scale statewide technology implementations, these efforts have been correlated with increases in students' performance on standardized tests (Egendorf, 2004). In addition, software supporting the acquisition of early literacy skills, including phonetic awareness, vocabulary development, reading comprehension, and spelling can support student learning gains (Egendorf, 2004).

Furthermore, technologies offer teachers and students opportunities that would otherwise be extremely difficult to realize in classroom contexts. Assessment, information access, collaboration, and expression are four areas where educational technologies demonstrate particular promise (Egendorf, 2004). There is also a broad consensus among school reformers regarding the central importance of these issues for improving student achievement (Egendorf, 2004). Technologies also create new opportunities in which children can express and communicate their ideas. It is no longer uncommon for schools to encourage reports in multimedia format or for students to build web resources that can be used by others. Thus, the benefits of globalization are numerous; it produces extra wealth for domestic and international firms; it allows the end consumer the possibilities of purchasing goods manufactured in sold worldwide; and it supports educational resources available to students everywhere at reduced costs.

The Affects of Globalization on a Society's Beliefs, Economy & Politics

Globalization has also impacted a society's beliefs, economy and politics. For example, in economically developed countries, globalization has helped hundreds of millions of people attain higher standards of living, beyond what they though imaginable a short while ago (Stiglitz, 2002). The youngest children now have access to the Internet, and are under the belief that it is a necessity along with other technological advances. People in large powerful countries believe that globalization has helped many countries, and cannot live without its benefits. The majority of society believes that the globalization of the economy has benefited countries that took advantage of it by seeking new markets for their exports and welcoming foreign investment (Stiglitz, 2002). The economy has been affected by globalization because now there is a strong support for increased international cooperation and stronger international institutions that may even intervene in the internal affairs of countries. Globalization has affected politics in the strengthening of the UN and the WTO, as the peacekeeping force (PIPA, 2000). According to current research, a very strong majority supports international cooperation to address global problems, and most Americans want the UN to play a more prominent role in the world (PIPA, 2000).

Finally, facing the affects of globalization calls for a complete change of mind-set among policymakers, planners, administrators, academicians, researchers and people alike. Overcoming these challenges will no doubt lead to a better society for individuals in all countries, whether economically advantaged or under developed.