Introduction
It is clear that the world has continued to experience change from one generation to another generation. One obvious thing is that a lot has changed in the last one hundred years; the manner in which business was done in 1912 is completely different from how it is done today. At the end of the 19th century and at the beginning of the 20th century, there was introduction of new world systems that were clear with features and mechanisms that got manifested gradually.
This process of manifestation occurred after the end of the Second World War and extended into the 21st century through what is commonly known as globalization (Wild, Wild & Han, 2012, p. 26). It became the framework of influence, affecting the society at local, regional and international level. Additionally, the mechanisms of these systems were viewed to be dominant within the context of whatever that preceded the achievements of the international community in cultural, economic and political spheres.
It is therefore evident that this approach had an array of implications including negative and positive results. This essay explores the concept of globalization with regard to its definition, history, contributing factors, current status and its overall impact on what has become a global village.
Globalization
Notably, globalization does not have a single definition. This is because of its complex nature that encompasses a wide range of thoughts, ideologies and contexts. Different people therefore developed the description of this phenomenon based on a particular set of prevailing factors.
For instance, politicians, sociologists and economists have their own definitions that are based on an area of specialization. By the fact that a conventional definition of any term is imperative, globalization is generally described as the process of accelerating and intensifying integration and interaction, which exists between people, governments and businesses from different countries around the world (Wild, Wild & Han, 2012, p. 28).
As a result of this definition, it is envisaged that globalization may open national borders and undermine the sovereignty of certain countries due to existing variation in economic stability and power. From the above definition of globalization, it is clear that the concept does not only revolve around international trade but it is coupled with several theories of anthropology, economics and politics among other fields. As it shall be discussed later in the essay, globalization has a significant impact in the world today.
The History of the emergence of globalization
Like several concepts in life, globalization cannot be considered to a new phenomenon in the world, as its history dates back in the ancient days. It can be traced from the time when trade and financial relations between nations emerged, even though this was later transformed into a more elaborate system based on the following three axes (Wild, Wild & Han, 2012, p. 28).
The first axis denotes the general size of trade exchange around the world, which may include the number of countries involved in advancing their business interactions. The second axis is expressed in the volume of the flow of funds between various countries of the world, aimed at realizing better returns than those available locally. This is achieved through several ways like acquisition of treasury bonds or shares and the development of companies and branches in foreign countries.
It is commonly referred to as foreign direct investment and involves a mutual business agreement between the investor and the host country. The third axis of economic globalization is manifested through the size and movement of labor resources between different countries engaged in the business or other economic entities (Wild, Wild & Han, 2012, p. 29). It is from this background that stronger global economic ties, allowing economic interaction on a world-wide scale.
Globalization in the first age from 1850 to 1914
As mentioned above, the history of globalization dates back in the 19th century when little was known about technology. During this time, the world experienced several challenges with political ideologies playing a crucial role. The superiority of nations equally determined their wealth even in foreign states (Waters, 2001, p. 7). Emigration was common especially between 1880 and 1910 when the total number of emigrants from Europe exceeded twenty five million people.
The concern about distance among people was high as leaders sought to establish a solution that was to promote regional economic growth. Consequently, political leaders strategized to eliminate several barriers and boundaries that had become obstacles towards successful trade between countries. This step was to create opportunities for increased economic development, adoption of other states and promotion of international peace by controlling wars (Waters, 2001, p. 10).
During this time, treaties played a major role as they defined future relationships between countries. For instance, the Conference Bretton Woods agreement of 1945 was ratified to establish a framework for financial and international trade and also to allow the establishment of international financial institutions that were to oversee the implementation of the globalization process (Osterhammel & Petersson, 2005, p. 1).
Among these institutions was the World Bank, which has remained a major player in the continuous globalization process. At its inception, the World Bank was mandated to facilitate the process through reduction of international trade costs. The bank acts as a global donor and supports initiatives to advance economic growth around the world (Wild, Wild & Han, 2012, p. 38).
Additionally, the 1947 General Agreement on Tariffs and Trade (GATT) treaty was essential in advancing the ideology of realizing a global economy. The treaty was designed to augment free trade through lowering of tariffs to promote international trade (Osterhammel & Petersson, 2005, p. 127).
Besides this, GATT worked towards eliminating nontariff barriers, which limited the quantity of importing goods from another country. Due to its inability to establish international trade rules, GATT was limited in its effectiveness to promote globalization, leading to the birth of the World Trade Organization in 1994 (Wild, Wild & Han, 2012, p. 31).
Its main role was to enforce rules that were to govern international trade. Since its establishment, WTO has maintained its three major goals, which are: facilitation of flow of trade, intervention for market opening and settling of emerging trade disputes among its member states (Osterhammel & Petersson, 2005, p. 99).
Globalization in the current era
It is important to mention that globalization movement declined with the beginning of World War I, a process that continued during 20s and 30s of the twentieth century. However, a new globalization growth phase began at the end of World War II. Until today, globalization is driven by three aspects, which include ideologies, institutions and technological innovations (Beck, 2000, p. 1). Ideologies entail decisions made and ratified by leaders to advance trade on a global scale.
On other hand, institutions refer to organizations that have been put in place to advance the course of international trade. As mentioned before, some of these include but not limited to the World Bank, the leading world lender and World Trade Organization (Beck, 2000, p. 1). Of the three drivers, technological advancement has been applauded for its immense impact in promoting globalization in the current era. To be specific, information technology has grown exponentially, defining the world as a global village.
For instance, the evolution of the computer technology has led to the use of more effective and faster means of information transfer, like email and video conferencing. Email communication promotes instant communication among people within different time zones. On the other hand, video conferencing allows managers in different locations to meet virtually and transact business without necessarily meeting physically.
This saves time and allows strong ties between business entities. Moreover, the internet also plays a pivotal role in international trade (Beck, 2000, p. 1). It allows companies to stay in touch and monitor businesses with a lot of ease. Through websites, companies can market their products and reach out to international customers within the shortest time possible. Coupled with affordable international connectivity and media advancement, technological innovations remain significant drivers of globalization.
Advantages and disadvantages of globalization
Based on the impact of globalization in the world, it is evident that the issue has its merits and demerits. While some countries may be enjoying the fruits of globalization, it is doubtless that this progress might have detrimental impact on some economies. Proponents of globalization argue that it has improved living standards and created new opportunities (Wild, Wild & Han, 2012, p. 39). For instance, it increases wealth and efficiency in the world.
It is believed that globalization increases access to international trade, per capita income and overall national production. Additionally, it allows flexibility of labor within markets in developed countries. This augments job turnover as employees are shifted to sections of the economy where they are more productive (Lane, 2006, p. 4). In addition, globalization enhances economic growth especially in developing countries. This is mainly through creation of jobs and reinforcement of international trade.
On the other side, globalization has several negative effects on developed and developing countries. For example, it lowers job opportunities in developed countries. This is because better jobs are sent to developing countries in the manufacturing industry, thus limiting such opportunities in developed countries (Waters, 2001, p. 212). Besides minimized job opportunities, globalization lowers wages for employees in developed nations.
When new jobs emanate from international trade, they attract low salaries compared to initial ones (Wild, Wild & Han, 2012, p. 39). Lastly, globalization exploits workers from third world countries. Through international outsourcing, companies offer low wages regardless of services rendered. This undermines workers as they are exposed to tough economic conditions, triggered by inability to meet personal needs (Lane, 2006, p. 7).
Conclusion
From this analysis, it is clear that globalization is a complex issue that is affecting all nations in the world today. Although no single definition has been adopted for this term, its basic and conventional description gives a glimpse of its impact from the time it started, decades ago. It also emerged that globalization exists in two phases; the current era and the period before the end of World War II.
Throughout its history, globalization has been driven by ideologies, institutions and technological innovations. Coupled with formation of treaties and organizations, nations merge ideas to promote international trade and economic growth. Whist globalization has promoted significance development around the world, it is worth underscoring the fact it has a wide range of disadvantages ranging from low wages, exploitation of workers and elimination of job opportunities in developed countries.
References
Beck, U. (2000). What is globalization? New Jersey: Wiley-Blackwell.
Lane, J. (2006). Globalization and politics: promises and dangers. Farnham: Ashgate Publishing, Ltd.
Osterhammel, J., & Petersson, N. (2005). Globalization: a short history. New Jersey: Princeton University Press.
Waters, M. (2001). Globalization. London: Routledge.
Wild, J. J., Wild, K. L., & Han, J. (2012). International Business: The Challenges of Globalization. New Jersey: Pearson Education.