Globalization, technology, and the shifting global economy

Globalization

International Trade

Globalization is in high gear right now and it takes on many forms. Whether it be culture, trade, transportation and technology, the world is made much smaller given the modern methods, preferences and ease of communication of today's society. Even repressive countries like North Korea and Iran are having a hard time insulating themselves from the effects of globalization and this is becoming more and more obvious by the day. While concerns about culture and uniqueness of each country and its parts is a noble thing to consider, the people of societies should be able to absorb the culture, products and media that they wish because freedom should be a common thread of all countries and globalization is just one way in which that can manifest.

Questions Answered

Changing Nature of Global Economy

Given that the planet is getting much more accessible and smaller due to communication and transportation technologies advanced at the clip that they do, the global economy has begun to shape-shift as well. Once upon a time in the United States, everything was basically made and used within the United States unless the resources did not exist. Now, the United States imports a lot more and manufactures a lot less of what they used to and indeed the United States economy has shifted from a manufacturing-based juggernaut to a service/knowledge sector behemoth with a lot of the manufacturing being done in countries like Mexico and China.

However, manufacturing is not the only thing that has shifted within this changing global economy. Where companies go to fulfill their business needs has changed as well. A lot of work previously done in the United States and in Europe in the countries in which firms are based are now relying heavily on countries like India to save money on labor costs, much the same reason iPod's are made in China and not in the United States (Walter, 2012). This is done to push down costs and push up profit margins and many companies are effectively doing this outsourcing by necessity lest they fall behind their competitors that will do the outsourcing with no hesitation or regret.

Political & Economic Differences

To see the changing world more in focus, one can focus on China and the United States. The United States is a blend of socialist and capitalist policies that is very capitalist in nature as it relates to economic policy and such. China, on the other hand, is Communist in its governing but they are quasi-capitalist in terms of their economics. The United States has racked up a lot of federal debt and a lot of the bonds for that debt have been snapped up Chinese investors to the tune of $1.3 trillion (Yoon, 2013). China has roughly three times as many people as the United States but their wage and hour laws are non-existent compared to the United States and much the same thing can be said about its work safety practices. The two countries are very different politically and economically but yet they rely on each other in a very symbiotic way. The United States has their debt bought by the Chinese but the United States purchases or has manufactured a gargantuan amount of goods in China and both countries benefit mightily from this arrangement.

Managerial Best Practices

As for what managers can do to be at their best, they have to realize that the globalization of the culture and economic planes on the planet Earth are nothing new and they are not going away. There are massive flows of goods, communication, workloads and people from one country to all of the others around the world and managers have to be on board with that if they want to work at a company that relies on that fact being what it is. This means being sensitive and embracing of diverse workforces, cultural mishmashes, heavy reliance on foreign goods and/or foreign labor, the globalization of industry parlance, social media and so forth.

Something else major to keep in mind is that there can and will be pushback and it will manifest itself in a number of ways. More than restaurant, as an example, has had to tiptoe quite a bit when marketing to a new country. For example, a franchise like McDonald's cannot just jump into a country like India and change nothing, the primary reason being of course that Indians general eschew the slaughter and consumption of beef which is the primary meat staple used in the United States market. There are also major potential pitfalls when speaking about similar issues in areas like the Middle East and Northern Africa, especially in light of the terrorism events of the last few decades and some wars that have been waged. The point is to not be culturally or racially tone deaf about how the firm, its home country or its people are perceived and received because that certainly matters in terms of the bottom line of any prospective or current business venture.

Conclusion

There is a firm dichotomy, both within the business world and outside of it, regarding whether globalization is a good thing in terms of culture, business or international trade in general. Some sources bemoan if not attack those that favor globalization while others embrace it. Others embrace it selectively based on the individual circumstances. It is true that there is not much wrong with giving people the choice, and not a mandate, to embrace the global sphere but the people that suppress that yearning are almost always acting in error based on their own preconceived notions. However, managers and businesses should be careful to not validate the concerns of those naysayers lest they be proven correct all along.