Positive Effects of Globalization

Globalisation is considered to be a process which is based on the integration and interaction between the companies, people and the governments all over the world. The growth of globalisation has mainly taken place with the help of advances in communication based technology and transportation. Increase in global interactions is mainly based on the ways by which international trade, culture and ideas have shown immense growth. For example, the world’s thirteenth largest economy Australia has shown a growth of 2% in import and export based operations. Globalisation is thereby considered to be an economic process which is based on the integration and interaction of the cultural and social aspects in an effective manner (Ahn, Minshall and Mortara 2015).

Diplomacy and conflicts are important negative aspects of globalisation. The process of globalisation thereby involves various aspects including, services, goods, economic resources based on capital and many more. The four basic aspects of globalisation were thereby identified in an effective manner with the help of International Monetary Fund which include, investment and capital movements, transactions and trade, dissemination of the knowledge and the movement and migration of people (Auer, Borio and Filardo 2017). The work organizations and businesses are thereby affected in a huge manner by the globalisation processes. The major challenges which have been created due to globalisation in different countries include, air pollution, global warming, cross-boundary water, over-fishing and many more (Altomonte, Zaurino and Colantone 2015).

The report will be mainly based on the ways by which globalisation is able to affect different developed and developing countries as well. The positive and the negative cases related to globalisation will be analysed in the report with the help of different facts. The changes which have taken place in trade based relationships between different countries will be studied in the report as well. The trade based transactions which have taken place in between different countries like, Australia, Japan, China, US, UK, Germany, Indonesia, Korea will be a part of this analysis related to globalisation (Bayne 2017).

Globalisation mainly aims at providing a competitive position to the organizations which operate in different countries all over the world. The major areas which have been affected in a huge manner by globalisation based activities include, the technological advancements, environmental developments, socioeconomic developments and many more. For example, the entry of global organizations like, Aldi in the retail sector of Australia has brought in new technologies. The companies of different countries which operate in a global environment are thereby able to gain a lot from greater number of products, consumers and services as well. The major approach to competition is mainly gained with the help of proper globalisation based activities (Belyi 2016).

Negative Effects of Globalization

The process of diversification of the resources is also facilitated in an effective manner by the globalisation in different areas of the world. The major components that form an important part of globalisation include, industrialization, GDP of gross domestic product, human development index. However, the globalisation based activities have different effects on the developed and the developing countries all over the world. The levels of recognition that are brought with the help of globalisation are effective at the national, international and the sub-national levels as well (Bende-Nabende 2017).

The capitalist social and economic relations of different nations are also affected by globalisation based activities that have taken place. The positive and negative effects of globalisation on different countries will be discussed further. The analysis of globalisation will be analysed with the help of the analysis of two countries Australia and India and sector that will be considered in the report is retail industry of the countries (Bryant and Javalgi 2016).

Figure 1 – Source – (Bryant and Javalgi 2016)

The process of management of business organizations has become easier due to various globalisation related activities. The different positive effects of globalisation are as follows,

• Global markets– The emerging markets which exist in various developed countries are mainly based on the privatisation related steps that have been taken by the global companies. The companies are thereby aiming at increasing their revenues with the help of expansion to the other countries or areas. The increase that has been experienced in the transactions that take place across the border is an important factor (Butt 2017). Globalisation has also played an important role in increasing the levels of competitiveness among the organizations which operate within an industry. For example, the competition within domestic and international companies have also increased due to globalisation. The entry of online multinational companies like Amazon has been able to affect the sales of retail organizations which are already operating.The multinational corporations are also a result of globalisation which has increased in the modern business environment. The multinational corporations have a central role in globalisation. The retail sector of Australia has been affected by globalisation and the organizations are thereby experiencing high levels of competition from various other global organizations like, Tesco (Charron 2016).

Figure 2 – Source – (Charron 2016)

• Cross-cultural management –The levels of interaction between different types of people have increased with the help of globalisation. The highly popular cultural force which has been created with the help of globalisation has also played an important role in developing unique abilities of global companies. For example, in case of the Australian retail based sector, the different global companies have changed the choice and preferences of the consumers.The consumer culture that has been developed in different developed countries have affected the revenues of the global organizations (Coyle 2016). The technological changes, changes that have taken place in mass media and the marketing campaigns are all based on the needs and demands of the global customers. The transformation has also taken place in the ideas and attitudes of consumers all over the world have also been affected by globalisation. Customers play a major role in the retail sector and the companies in this sector are ready to take the necessary steps in order to fulfil their needs and demands (Hopper, Lassou and Soobaroyen 2017).

Figure 3 – Source – (Hopper, Lassou and Soobaroyen 2017)

• Resource imperative –The resource based needs of developed countries are normally fulfilled with the help of low cost labour and raw materials that are available in the developing nations. The economies of the developed countries are highly dependent on the developing nations all over the world. The organizations of the Australian retail sector are highly dependent on the developing nations like India for the raw materials and cheap labour (Kakabadse, Kouzmin and Kakabadse 2017).
• Competition – The levels of competition that existed among the organizations in different industries have increased due to the globalisation. The companies have started implementing the concept of customer is the king. The production processes are thereby based on the improvement of the quality of services and products. The domestic organizations now have to face tough competition from the foreign companies. The Australian retail industry has also faced huge levels of competition from the various global organizations which have started their operations in the country (Lambregts, Beerepoot and Kleibert 2016). The global organizations which operate in the country mainly include, Aldi, Marks & Spencer. The online retail organizations like Alibaba and Amazon have also played a major role in reducing the revenues of domestic organizations.
• Culture – Globalization has been able to impact the culture of an organization in many ways. The people of all different countries have thereby started following a similar culture which has affected their choices and demands as well. The societies all over the world have become larger than the previous business environment. The culture of a particular country is affected in every manner by the others in the global business area. The culture that has been adopted by the Australian retail sector has been affected and has been able to cause many changes in the ways by which the demands and needs of the customers are fulfilled (Maskus 2014). The online shopping culture has increased in the Australian retail sector after the entry of Amazon. This has led to the organizations like Woolworths to start their e-commerce based operations.

• Legal effects –The increase that has been seen in media coverage has been helpful in reducing the cases related to violation of the human rights. The growth of global economy has been facilitated with the help of globalisation. The promotion of openness has played an important role with the exchange with prosperity and greater democracy (McCann and Acs 2015).

Globalisation has some major positive impacts on the retail sector of Australia. The levels of competition in a developed country like Australia were increased due to the entry of many multinational corporations. The two major competing retail organizations in Australia mainly include Wesfarmers and Woolworths. The changes that take place in the currency levels have affected the prices of services and products. For example, the value of Australian Dollars had weakened in the year 2014 and further led to the losses of the retail organizations.  Globalisation has significant effects on the developing countries like India. The globalisation related activities have been able to affect the Indian retail industry in a beneficial manner (Naghavi and Prarolo 2018).

The increase of globalisation has increased the speed of the progress that has been made in field of technology. The retail sector of the country has also been affected in a positive manner by the increase of globalisation. The levels of unemployment in the country had been reduced and increased levels of competition had further provided more power to the consumers. The consumers are able to bargain more for the services and products that are provided to them by the domestic and the multinational corporations as well (Pazienza 2015). The foreign direct investments have also increased in the current business environment in India and this has led to the increase in huge employment based opportunities in the country. The developed and the developing countries have been able to benefit from the ways by which globalisation has created a marketplace for services and products that are offered by different organizations (Reese, Rosenmann and McGarty 2015).

Trade Relationships and Activities

Globalisation has been able to make many changes in the operations of different multinational corporations in the world. The developed nations have also faced major negative effects based on the implementation of globalisation. The different factors which are able to affect the developed nations are as follows,

• Job insecurity – The citizens of developed countries have started facing major job insecurity with respect to the outsourcing based activities that are performed by the multinational organizations. The manufacturing based processes of organizations have been outsourced to different developing nations. The organizations of the developed countries like, Australia have started outsourcing the production activities to developing countries like India (Renzaho 2016). This has a negative effect on the people of different developed nations. Globalisation has thereby led to the exploitation of the labour from different developing nations all over the world. The safety based standards have been ignored by many multinational corporations leading to the avoidance of social responsibilities (Slaughter 2017).
• Fluctuation in the prices – The globalisation based activities have also led to huge fluctuations in the prices of services and products that are offered to the customers globally. The increase in levels of competition in the market of developed countries has further led to the outsourcing of production activities to the developing countries. The cheaper production of goods has been an important part of the operations of multinational corporations in order to maintain an effective customer base (Tridico 2016).
• Unemployment – The increased levels of unemployment is a major negative effect that has been caused on the developing countries all over the world. The economic integration based processes have increased the levels of competition in the market for jobs. The macroeconomic policies which have been developed in different countries have been an important part of the industrial relations (Watkins et al. 2015).

• The over influence of Western culture on the developing countries has affected the local culture in an adverse manner. The people are thereby unable to follow their own culture in an effective manner. The culture of people in India has also been affected in an adverse manner by the influence that has been caused by the Western countries (Zajda and Ozdowski 2017).

• The trade based tariffs of developing countries have increased in a huge manner due to the recent reforms that have been implemented. For example, the in India the trade policy is an important aspect related to globalisation which has been able to affect the income levels of people in a negative manner (Reese, Rosenmann and McGarty 2015).

Globalisation has thereby been able to influence the developed countries like Australia and the developing countries like India in many negative ways. The developing countries are however facing the negative effects in a more severe manner as compared to the developed nations. Globalisation has been able to affect the income levels, the local cultures, the trade based activities and the eating habits of the people as well. On the other hand, the developed countries have faced some major employment based issues with respect to the job insecurity that is faced by the people. The people of Australia have faced some major issues related to the insecurity of their jobs due to huge amounts of outsourcing activities to the developing countries (Watkins et al. 2015).

The trade relationships that have been developed by different countries have been affected by globalisation in a huge manner. Globalisation is an ongoing process for the past few years. A formal shape was taken by globalisation after the signing of General Agreement on Taxes and Tariffs (GATT). The treaty further paved a way for the globalisation based process in an effective manner. The economy of Australia had opened up in the 1980s based on the practice of mercantilism. The process of globalisation does not similar effects all over the world. The trade activities of Australia have increased which was marked by the end of protectionism in the country. The restrictions that were placed on foreign investment by the country had also been removed after the implementation of globalisation (Zajda and Ozdowski 2017).

The trade related activities in Australia had increased after the implementation of globalisation. The development of economy has also started based on the increase of globalisation in the world. The manufacturing base of the companies have changed due to the availability of low cost labour in the developing countries. The companies have started outsourcing the production activities to the labour present in the developing countries The different multinational corporations which operate in Australia have also outsourced the manufacturing operations to different developing multinational corporations (Slaughter 2017).

The industrial organizations have thereby started operating in a different manner in the developed countries. The labour import based activities have taken place in Australia in a large manner. The organizations have thereby started importing cheap labour in order to reduce the cost of production and the prices of products as well. This has however affected the manufacturing sector of Australia in a negative manner and the GDP of the country has also been affected in an adverse manner. The retail sector of the country has gained a lot from the ways by which the trade activities have increased. The customer base of retail organizations has also increased in an effective manner due to the increase that has been experienced in trade (Renzaho 2016).

Effects on Developed and Developing Countries

The developing countries like India have also gained a lot from the globalisation and increased trade activities. The increase in trade based activities has further been able to increase the levels of foreign investment in the country. The retail sector of the emerging economy has been affected in a positive manner with the help of the globalisation and trade. The Indian economy had also experienced huge amounts of growth due to globalisation based activities. The increased need for labour in developed countries has a positive effect on India. The people of the country are thereby able to receive the best levels of services with the help of proper implementation of globalisation in the countries (Reese, Rosenmann and McGarty 2015).

The slowing down of international trade in many countries has been able to affect the globalisation related activities. The trade based activities in different countries have started slowing down from the year 2012. The growth of trade has become less than the growth of GDP. The technological advancements have been an important factor which is responsible for the lack of growth of trade in different countries. Globalisation has brought the technologies closer to production based areas of the goods. This has been able to reduce the need for trade in different developed and developing countries as well (McCann and Acs 2015).

The companies are able to implement new technologies in order to operate in the market in an effective manner. The techniques based on production and further supply of the goods have been implemented by the organizations in an effective manner which has led to the loss trade. The political issues that are faced by the organizations in different countries have been able to affect the process if globalisation. The increased use of technologies has also affected different developing countries like, India as well (Naghavi and Prarolo 2018).

The multinational corporations are thereby able to create their production plants in different countries thereby reducing the need for importing the raw materials from other areas for production. The consumers of different global organizations have however been supported by the changes that have taken place in different trade based activities. The international trade based on different offshore production processes is more likely to decrease in the future. The growth of international trade will thereby be lesser as compared to the growth that can be experienced in the GDP of different countries like Australia (Pazienza 2015).

Retail Industry in Australia

The trade based relationships between different countries are affected by the different factors which include, the exchange rates of currency in the country, the competitiveness in the country and globalisation. The countries like Australia and India which are a part of these trade activities are affected by the ways by which these factors keep changing with the changes that take place in the environment (Lambregts, Beerepoot and Kleibert 2016).

Conclusion

The report can be concluded by stating that globalisation has been able to impact the ways by which different multinational organizations are able to operate in the different industries. The developed and developing counties are also affected by the process of globalisation. The two countries which have been taken into consideration, Australia and India are affected by globalisation both in a positive and negative manner as well. The countries and the people are hugely affected by the globalisation based processes and activities in different industries or sectors. The trade activities of the companies are also affected by globalisation based process which has taken part in different countries. The retail sector which has been considered in this analysis has also been affected by globalisation in many ways based on which the consumers are served by the organizations.

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