Pros and Cons of Globalization Dianna L. James
MBA607
November 22, 2014
Jeff Knott, Instructor

Abstract
Within this writing, we had to research the pros and cons of globalization. However, one needs to know the definition of globalization. Globalization is a process in which we trade with other countries in the stock market or imports/exports of goods and services. However, globalization is not as easy as saying the word, there are many issues that are important to know, one is the laws of any given country. Korea is a good example where they have non-flexible laws that a business that wish to produce their good though their country they need to be abided by in all sense of the word. When visiting the country you need to be well aware of the culture differences and conform to the culture of the country you are visiting. There is one basic question associated with the pros and cons that needs to be answered. “How can firms and governments help to reduce the amount of resistance that might result from its implementation” (From instructions for week one assignment)? Key Words: Trading, Country, Laws, Pros, and Cons, Globalization

Pros and Cons of Globalization
Within this writing, we had to research the pros and cons of globalization. However, one needs to know the definition of globalization. Globalization is a process in which we trade with other countries in the stock market or imports/exports of goods and services. However, globalization is not as easy as saying the word, there are many issues that are important to know, one is the laws of any given country. Korea is a good example where they have non-flexible laws that a business that wish to produce their good though their country they need to be abided by in all sense of the word. When visiting the country you need to be well aware of the culture differences and conform to the culture of the country you are visiting. There is one basic question associated with the pros and cons that needs to be answered. “How can firms and governments help to reduce the amount of resistance that might result from its implementation” (From instructions for week one assignment)
Dr. Ismail Shariff
Dr. Ismail Shariff stated that globalization is made up as a worldwide process of homogenizing prices products, profits, rates of interest and wages. Many of the companies that were located in the United States have taken business overseas to be manufactured. What Dr. Shariff stated tells me why many of those business went overseas to manufacture their products, they can get more money in their pockets by manufacturing overseas and pay less in wages as in the United States.
Definition of Globalization
Before Dianna James (I, me, and myself from this point forward) can address the pros and cons of globalization, I need to address what the definition is. According to Merriam-Webster Dictionary, it was stated that the term globalization was first used in 1951. Additionally, stated globalization is a process that is experienced in everyday life. Furthermore, process is marked by the distribution of commodities and innovations from around the world. “Factors that have contributed to globalization include increasingly sophisticated communications and transportation technologies and services, mass migration and the movement of peoples, a level of economic activity that has outgrown national markets through industrial combinations and commercial groupings that cross national frontiers, and international agreements that reduce the cost of doing business in foreign countries” (Merriam-Webster Dictionary, Date Unknown). With globalization it can offer massive profits to trading companies and countries, however, this process if not necessarily easy due to the complicated expectations, cultures, values, standards of living and legal system within each country. For more information, one can search free trade to get another aspect of globalization.
Pros.
There are many benefits from free trade and/or foreign investments. I found two very good sites that covered the pros and cons on globalization. One country that would invest in a foreign exchange has the ability to profit from the market. However, if you are located in a poor country and wish to trade on the open market you will want to do business with a wealthy market. By trading your goods and services to a wealthy country when you are a poor country, the people of the wealthy nation is more likely to pay more money for your good and services that those in your own country. Below in quotations are nine pros for globalization:
1. “The proponents of global free trade say that it promotes global economic growth, creates jobs, makes companies more competitive, and lowers prices for consumers. It also provides poor countries, through infusions of foreign capital and technology, with the chance to develop economically and by spreading prosperity creates the conditions in which democracy and respect for human rights may flourish.
2. According to libertarians, globalization will help us to raise the global economy only when the involved power blocks have mutual trust and respect for each other’s opinion. Globalization and democracy should go hand-in-hand. It should be pure business with no colonialist designs.
3. Now (sic) there is a worldwide market for companies and consumers to access products from different countries.
4. There is a world power that is being created gradually, instead of compartmentalized power sectors. Politics are merging and decisions that are being made are actually beneficial for people all over the world.
5. There is more influx of information between two countries.
6. There is cultural intermingling. Each country is learning more about other cultures.
7. Since we share financial interests, corporations and governments are trying to sort out ecological problems for each other.
8. Socially (sic) we have become more open and tolerant towards each other, and people who live in the other part of the world are not considered aliens.
9. Most people see speedy travel, mass communications and quick dissemination of information through the Internet as benefits of globalization” (Collins, 06/28/2010).
I went to McDonald’s website to see how many restaurants they have in different countries other than the United States. Just imagine what the world would be like with access to their famous Big Mac, Chicken Nuggets or even a happy meal (with a toy) for the kids According to McDonald’s our story and became the first page of their history that was written by Ray Kroc back in 1954 when he went into a restaurant located in California. It was stated that they are proud to say that they are one of the leaders in restaurants that have sprung up across the globe. They are located in over 100 countries, and they have more than 35,000 restaurants that serve some 70 million people every day.
Subway is actually the leader in international restaurants and McDonald’s comes in second. Subway has opened some 40,000 restaurant overseas. According to an article that was published on August 28, 2013 it was stated that they had opened 1,761 restaurants and plan on opening another 10,000 more by the end of 2017. Additionally, Subway is expanding faster in overseas markets like Brazil, France, Russia, and United Kingdom. Don Fertman, who is the Chief Development Officer, stated that there is still room for growth in the United States. He said that there are markets in the United States that are considered underserved such as Boston and Philadelphia. Finally, he also feels that they can reach 100,000 by 2030, according to visions that the company has developed.
Subway is not shy about putting stores in a very small space to serve the people of the given country. They are noted to have a restaurant in health clubs, Laundromats, and/or movie theaters. Additionally, they will put a small restaurant inside a store, in fact, they will open a restaurant inside of Wal-Marts, and, McDonald’s has restaurants inside of Wal-Mart stores. The 40,000th restaurant that Subway opened was located inside an “AppleGreen gas station in Ipswich, England” (Wong, Davidson, 08/26/2013). Subway grew from a single restaurant back in 1965, located in Bridgeport, Connecticut to a global market. As of August 26, 2013, they were located in 102 countries, which included Iceland and Zambia. More amazing was it is an impossible market for McDonald’s has issues getting into.
Today it is much easier to sell items in different countries because of the abilities of travel. We are able to send merchandise by ship, aircraft, and even trucks across one country to another. For instance, the United States can put a shipment from Texas Instruments on a semi, and have it delivered to Canada in a short period. However, that same shipment can be loaded on an airplane going to the United Kingdom, and arrive at customs within twenty-four (24) hours. Even the internet has made the process much easier, because we are able to communicate in ways that we were not able before the internet. We now have Skype and email, Skype is actually a nice internet feature that we are able to communicate face to face with a person(s) via the internet. You can have conference calls through Skype and see the faces of everyone in on the call; you will have the input of every individual. Either before that, the only way to conference call was by a telephone system that enabled conference calls to be set up, or you had to travel to the given country that a scheduled meeting has been set beforehand. Because of new technology, it has made business much easier.
Additionally, even money flow has become much easier and more efficient than it was ever before. Money can be electronically transferred now, compared to years back when you had to wait for the check to come in the mail for the order that was shipped out to another country. Today they can have your money is less than twenty-four (24) hours with electronic deposit. Furthermore, you can electronically deposit funds for a shipment that you have order from another country. Today with globalization the goods and services from around the world has become more available than it ever had before. We can look at globalization as a tidal wave going on that is sweeping the economic environments from all over the globe. However, this tidal wave never stops and for that, there will always be the pros and cons. It will always have an economic impact on a countries financial status.
Cons.
It is interest to see what the cons are with globalization. The cons consist of eight disadvantages with globalization.
1. The main use with globalization is the wealthy continue to get wealthy, which making the poor continue to stay poor, or even get poorer. For managers this is wonderful because they continue to make the money, while the worker get paid little money and can have an impact on nature.
2. The corporations that are multinational they are accused of “social injustice, unfair working conditions (including slave labor wages and poor living and working conditions), as well as a lack of concern for the environment, mismanagement of natural resources, and ecological damage” (Anonymous, Date Unknown).
3. Multinational corporations are manipulating decision that are making in a political arena to allow commercial activities that had restrictions in the past. It is thought that globalization will give corporations the ability to gain power of the around the world.
4. Opponents say globalization makes it easier for rich companies to act with less accountability. Additionally, claimed Americanization is overriding other countries and their cultures.
5. “Anti-globalists also claim that globalization is not working for the majority of the world” (Anonymous, Date Unknown). It was reported that there was a swift growth within global trading and investment, from 1960 through 1998. An inequality got worse during that period both internationally and within countries that both could feel the impact due to an inequity. “The UN Development Program reports that the richest 20 percent of the world's population consume 86 percent of the world's resources, while the poorest 80 percent consume just 14 percent” (Anonymous, Date Unknown).
6. Globalization is believed that communicable diseases are being spread. People that travel to countries that have HIV/AIDS is one that is believed to be spread by travelers that go to any countries that is infiltrated with the disease. Today we are dealing with a Deadly disease that has come to the United States and has claimed a life due to his travel to a country that has the disease spreading. This disease is called Ebola, and we had no known record of this deadly disease until this person arrived from a third world country. Just recently, I went to the hospital to get a Halter Monitor and was ask if I had been anywhere overseas. Even though I stated no, I had to sign a statement indicating that I had not.
7. Labor is been mistreated with globalization. Many countries use prisoners and child workers to manufacture good, and they work in some of the worse conditions (could be called inhumane). Many of the companies overlook any safety standards that are in place, just to produce a product for less cost. “There is also an increase in human trafficking (sic)” (Anonymous, Date Unknown).
8. There are safety nets in place when it comes to social welfare schemes. The safety nets are to keep pressure on in countries that are developed because of their deficits and any other ramification that can happen due to globalization.
How can firms and governments help to reduce the amount of resistance that might result from its implementation?
There are ways that firms and governments can make globalization easier during a transition period. Follow a number of instruments until you create the regulation that will work for both the firm and government. There is regulatory, and non-regulatory ways set up the policies of the company. It is more essential for the policy makers in both the companies’ country and the country in which they wish to establish a company. The government and community in whom the given company wishes to take their business identify policies makes need to have a complete understanding of what the efficiency, effectiveness, equitable. It is a contract that is legal and binding spelling out all the instruments of the company.
Two men from the Australian National University (Neil Gunningham and Darren Sinclair) derived a paper that provided the strengths and weaknesses of policy instruments. They stated, there really is no single instrument that will work by itself. Additionally, policies instruments work well only when there are a range of circumstances that are restricted.
Beyond the limitations of the “traditional systems of regulation there exists a large range of policy instruments that may not be fully considered by policy makers who may limit themselves to the types of instruments used in the past” (Gunningham, and Sinclair, Date Unknown).
There is the direct government regulations “known also as black letter law or command and control regulation” (Gunningham, and Sinclair, Date Unknown). This happens when a particular government enforces and creates a formula legislation and enforces that legislation. They spell out the specifics of the behavior that an organization or individual is required to follow.
Direct regulation is mostly used when there is a higher risk that it could be a substantial to a community. Additionally, it can effect of their economy, environment, groups, and/or individual within their country. An example that was stated in their writing was “the handling of toxic waste” (Gunningham, and Sinclair, Date Unknown). Direct regulation is even more useful where community/industry require legal sanctions before operating.
Direct regulations are more important when there is little It is also applicable when there is little consistency between an industry and the community. Additionally, it is “no effective, broad-based industry bodies limiting the opportunity for self-regulation” (Gunningham, and Sinclair, Date Unknown). Furthermore, it is taken into consideration especially with there have been a lack of compliance with using self-regulation or quasi-regulation and where communities are not in compliance which make it a higher risk.
When looking at business regulations direct regulation is clearly the best to enforce firms that are more identifiable and accessible by any given counties lawmakers (city, county, state, country). This is a great way to state the above “Kagan refers to the difference between regulating elephants and foxes: it is harder for elephants to hide. It is not as effective in dealing with transitory, mobile (sic) and/or remote firms” (Gunningham, and Sinclair, Date Unknown).
There are advantages to using direct regulations is because it has some major strength in dependability. Additionally, provides monitoring and enforcement of wrong doings. The expectations are clearly defined and allowing any given firm or government complete understandings of their production policies. Furthermore, the legal aspect can be identified and if a breach is found it can be handled with law enforcement. “This provides regulators with defined operational standards and individuals and firms with a clear understanding of their regulatory obligations” (Gunningham, and Sinclair, Date Unknown).Disadvantages
The use of direct regulations they are required to let all applicable regulators access to a complete and accurate understanding of what work will be conducted within the industry or group. For example, if regulators are required to set targets for, say, pollution reduction they may need to engage in lengthy and intricate information gathering exercises” (Gunningham, and Sinclair, Date Unknown). We all realize that economies, technologies, and populations, continue to change and grow, and if regulators can get it correct, it is possible that at any given period one or all of those things change. Even if the regulations are amended, it will take a large chunk of time to make those changes.
Direct regulation is one of the more costly regulations to enforce and for it to reduce noncompliance of effectively. There was a good example used from my reference “It can elicit defiance and resistance; Anderson has used the expression ‘shoot, shovel and shut up’ to describe the response of some USA farmers to federal endangered species legislation” (Gunningham, and Sinclair, Date Unknown). Significant resistance can happen, when regulations are not spelled out so both the regulators and regulates cannot fully understand the consequence of a violation.
Sometimes the best way to get the most accurate regulation is by mixing the two instruments together. However, depending on the type of business you is they may not be appropriate to mix. One may work better than the other may.
What you want to do is research for what parts would work for your firm and the government of any given country(s). You may have to have one for the United States and one for China that spells out the respective laws on importing and exporting. Many possible instruments can be combined to create a more complex regulation and will be more accurate to the type of business you would be conducting within any given country.

Conclusion
In conclusion, this writing there was a lot of information that was not realized about globalization. When one thinks of globalization often times we thing of climate change. However, it has a lot more that climate change, it is relevant to trading with other countries around the world. We have started to rely on technology today, because we can talk to anyone in the world at any given time. The question that was posed, it was interesting finding any reference that would hit the nail on the head. However, Neil Gunningham and Darren Sinclair gave a great example of various regulations that are between a firm and a governing party. They described how each regulation could work either by itself or together. If there would be a breach in a given regulation that was set forth for your firm/business/corporation/industry, there will be action taken by lawmakers.

References

Anonymous, (Date Unknown), Globalization, Retrieved 11/21/2014, from http://www.it.iitb.ac.in/~prathabk/pages/tech_archives/global/globalization.pdf
Anonymous, (Date Unknown), McDonalds Story, Retrieved 11/21/2014, from http://www.mcdonalds.com/us/en/our_story.html
Collins, M, (06/28/2010) The Pros And Cons Of Globalization, Retrieved on 11/21/2014, from http://www.manufacturing.net/articles/2010/06/the-pros-and-cons-of-globalization
Gunningham, N., and Sinclair, D., (Date Unknown), ARCHIVE: Smarter policy - choosing policy instruments and working with others to influence behavior, Retrieved on 11/22/2014, from http://www.apsc.gov.au/publications-and-media/archived-publications/publications-archive/smarter-policy
Merriam-Webster Dictionary, (Date Unknown), Globalization, Retrieved 11/21/2014, from http://www.merriam-webster.com/dictionary/globalization
Wong, V. and Davidson, S., (08/26/2013), Subway at 40,000: Fast Food's Global King Keeps Growing, Retrieved on 11/21/2014, from http://www.businessweek.com/articles/2013-08-26/subway-at-40-000-fast-foods-global-king-keeps-growing