Globalization's micro and macroenvironmental effects on contemporary society

International Business Environment

Today's micro and macroenvironments are developing at rapid paces, paces which are sometimes difficult to keep up with. The modifications in all socio-cultural, economic, technological or political backgrounds are affecting all features of the everyday life, forcing the individual to adapt along. Some of these modifications have made the life of the individual easier, whereas others have hardened it. Probably the most relevant examples in this instance are offered by the technological field. Innovations such as steam vacuums or dish washers have improved the quality of life, whereas personal computers and laptops (when used mainly for online communications and gaming) have damaged the relationship between parents and their offspring, further deepening the gap between generations.

The list of positive and negative modifications which have affected the individual and the society is endless, but what must be, however, remembered is that most of these modifications are generated by the forces of globalization. Ultimately then, one should discuss these forces in light of the contemporaneous society. Great emphasis has yet been placed on the topics of globalization and the specialized literature is filled with praises as well as disclaims. One way to address the issues of globalization is an analysis through the lens of a quote:

Globalisation and the resulting increase in competition harm people, as international companies play one government against another to get the best deal possible. Meanwhile, governments continually ask for greater concessions from their citizens, demanding that they work harder and longer for less pay."

2. About Globalization

The term globalization emerged during the 1980s and gained popularity throughout the 1990s, becoming a buzzword of the contemporaneous society. A first attempt to define the term globalization "envisaged a situation in which information travelling at electronic speeds would replace language with instant non-verbal communication, creating an 'all-at-onceness.' [...] a globalized world is one of increasing instantaneity, where communication media enable people in disparate locations to experience events simultaneously" (Ray, 2007, p.1). Justin Ervin and Zachary Smith (2008) strive to define the concept of globalization from a broader perspective, and in their venture, employ the fact that the individual is no longer isolated, but that he becomes affected by the "actions of distant others" (p.2).

Globalization101 website defines the concept as "a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world."

To conclude the findings in the specialised literature, globalization could be simply defined as a process in which information and practices transcend the national boundaries and manage to affect individuals in various geographic locations. To better explain, the travelling information could belong to the fields of sociology, culture, economics, politics or technology and could affect these particular fields in another country.

The forces of globalization have generated numerous implications, of both positive as well as negative nature. This nature has sometimes been determined by objective reasoning, whereas in other instances it has been subjective. Some pro and con arguments relative to globalization are presented below. This endeavour is necessary for the ability to respond to the quote, in terms of agreeing or disagreeing with globalization generating negative aspects upon societies and individuals.

4. Disadvantages of Globalization

The general blame that can be brought against the forces of globalization refers to the fact that they reveal their benefits selectively. This idea is sufficient to explain the controversial findings of economists relative to the benefits and limitations of globalization. To better understand, "globalization proceeds selectively, including and excluding segments of economies and societies in and out of the network of information, wealth and power that characterizes the new dominant system" (the International Institute for Environment & Development, 2002, p.4).

The selective effects of globalization primarily mean that while some individuals and groups will feel the advantages, others will be subjected to the disadvantages. This is most obvious in terms of income in the meaning that globalization makes the rich get richer and the poor get poorer. In a more scientific formulation, the forces of globalization foster an environment which embraces an uneven distribution of income and a greater income inequality across countries and individuals.

Aside the economic aspects, globalization also poses threats upon the natural environment. By allowing corporations to benefit from the advantages of various nations, it also allows them to pollute the waters, engage in deforestation, consume the energy, generate pollution and greenhouse gases and so on. Otherwise put, globalization damages the natural environment (Lane, 2006).

As Frederic Mishkin pointed out in the Next Great Globalization, the effects of the globalizing forces upon the financial markets are highly controversial. Whilst some economists only tend to see their upside, others also reveal the limitations. In this order of ideas, a financial globalization could lead to financial crises, which will in turn lead to disastrous socio-economic effects, such as high unemployment rates, increased costs of living, culminating even in violent manifestations. "Opening up the financial system to foreign capital flows can lead, and has led, to disastrous financial crises, which have resulted in great pain, suffering and even violence" (Mishkin, 2006, p.9).

Directly linked to the previous disadvantage and the basic definition of globalization, is the fact that the interdependence of sectors and institutions increases in a global market. In this instance then, a financial crisis within one country or within one institution is likely to generate negative effects upon its partners. The most relevant example of chain reaction to a financial crisis is the current situation, in which the global community is threatened with economic collapse due to the financial difficulties of the United States. The situation is similar in terms of politics or the social environment.

Globalization has often been assimilated with Americanization, meaning by this the desire of the American corporations to transcend boundaries and get access to cheaper resources (Rollin, 1989). Otherwise put, globalization promotes the interests of multinational organizations, which can simultaneously benefit from various comparative advantages, creating economies of scale. These scale economies are situations in which one company (or a unified group of organizations) has access to resources and the power to implement its own prices. The most relevant example in this instance is Wal-Mart. The retail monolith has often been accused of destroying the local economies by employing uncompetitive prices. The situation is similar in regard to globalization, when large corporations become present in small communities and has best been stated by Grzegorz Kolodko (2003, p.12) as the "dying off of some traditional branches of manufacturing in certain countries due to their low competitiveness, which creates rampant unemployment and poverty."

Following the same line of thoughts, globalization has also been accused of generating fierce competition in the international environment. While this may be perceived as an advantage as it forces national industries to develop, it also poses the threat that the national companies will be unable to adapt along. "The disadvantages of globalization are that a firm might not be able to survive the global competition. The cheaper imported goods will kill the domestic industry. This will bring about problems of unemployment and current account deficit to the affected industry" (Suryadinata, 2006, p.206).

Fact remains the national economies do not become discouraged by the global competition and continue to intensify their efforts. A most relevant example in this instance is given by a situation in which the global corporation sells imported goods at uncompetitive prices. The local manufacturers will strive to increase their competitive position by making personal and financial sacrifices. Their efforts will either be repaid or not, but their existence is a proven fact.

The power that these corporations could come to own in the end is yet another reason for concern and materializes in a "threat that control of world media by a handful of corporations will limit cultural expression" (Dark September Rains). This could then lead to violent manifestations, with the aim of preserving the cultural heritage. Then, another disadvantage is given by increased migration (also generated by the corporations' search for cheap and skilled workforce), which could increase the risks of contagious diseases being transported from a location to the other. Then, relative to Americanization, the post-war economic growth was based on consumption, an unrealistic and unsustainable model of economic growth, which could be transferred to the emergent Asian and European countries (Dark September Rains).

5. Discussion and Conclusions

Globalization is the buzzword of the twenty-first century. The concept basically refers to a free movement of information and resources across countries. Its effects are numerous and multifaceted and affect all features of the everyday life, including the social, cultural, economic, political, technological or environmental backgrounds. The specialized literature on the topic of globalization presents the reader with a multitude of sources and opinions, some defending the process, others disclaiming it.

Among the most significant benefits of globalization, one could point out a more efficient allocation of resources or the increased opportunities of economic growth and development through a better access to capitals, technologies, commodities or labor force. Some disadvantages however revolve around the downside of fierce internationalized competition, materialized in the death of national industries (in the face of scale economies and uncompetitive prices), further generating job losses, increased unemployment rates, reduced living standards and even violent manifestations. In this line of thoughts then, the initial quote seems relevant by presenting a real situation.

The literary references to the role that governments play in addressing the threats of globalization are reduced, generally because this role is reduced. The quote however suggests that governments are as much to blame as the multinational corporations. This is probably because the corporations reveal a growing power relative to the government. For instance, out of the largest global economies, 51% are corporatists, and only 49% are governmental. As a result then, governments tend to support the growth and success of corporations (Leonard). Then, another specification to be made is that governments look at globalization as an external force, in the face of which they have no power. Therefore, the sole stand they can take is to adapt along. "Governments portray globalization as an external force that confronts them and leaves them few choices. They have to adapt. Globalization is a reality, not an option as former U.S. President Bill Clinton expressed it. EU commissioner Leon Brittain said: Resisting globalization is an impossible proposition" (Holm). Ultimately then, governments do seem to dance to the songs of the corporations, which are able to play the federal institutions against each other. And their tunes indicate increased competition which does harm the individual citizens. In making this statement however, one has to remain objective and still remember the benefits of the globalizing forces, against its threats.