Introduction
As corporations continue to internationalise, new markets keep opening up, as well as diversifying their assets and gaining talents from all over the world. However, there are specific issues with the regulations for international law and businesses that are not well done, and this can cause problems and lead to consequences for both the government, corporate citizens and civil society; as such, moderating the behaviour with effective rules needs to be put into action.
For domestic companies, most of the problems that an international organisation would face would not come up because of the domestic law because they are the legal obligations that domestic companies are to follow, for example, labour and environmental law. Hence, they can be held liable for the beaches of these obligations. After all, although companies cannot be imprisoned in most states, they can be sentenced to other criminal stations such as fines. However, when referring to international companies, the companies themselves are responsible for their own wrongful acts as of now, and the government cannot actually punish them for such unlawful actions. Hence rules or regulations needed to control their activities must be explicitly designed. This paper was written to study the critical processes identified within globalisation debates and identify the changing pressures being placed upon companies and governments.
Multinational Corporations
The rising influence of multinational businesses is one of the most critical problems that nations must deal with. The transition for many campaign organisations away from focusing on governments and toward companies suggests that they identify a different focus of power. Thus, they seem to hollow out the entire force of the industry, which significantly impacts society. This may be because more people are moving away from politics. Due to their participation in the vast majority of economic development of a country, multinational companies (MNCs) have a significant impact on the global system. Consequently, it is crucial to comprehend how multinational firms affect international relations to pinpoint the causes of certain occurrences accurately. Chances are, if the policy is created without a thorough grasp of the global order, it will do more damage than good.
The capacity of multinational firms to effectively operate, organise, and control interactions between governments is a significant source of their influence. MNCs may move manufacturing from states with the highest expenditures to states with low prices in the interest of effectiveness. Since MNCs have the potential to control industry and, eventually, the wealth of the state, states should be worried about their dominance (Clegg, Geppert, and Hollinshead, 2018). After all, the lack of an MNC is much scarier for a state than its existence.
Through political activity, MNCs can also reduce the degree to which countries can control them by trying to take advantage of often manipulable legislative procedures. For instance, states establish property rights for both people and groups to guard against damage to one another’s property. People and organisations compete continually for greater security and more equitable availability of resources. Thus, successful businesses can influence laws, increasing others’ transaction fees so they may profit from the resulting rents.
A global organisation that may have a significant impact on the economy and the administration of a state has also been effectively developed as a result of the growth of the MNC. If a state tries to challenge a multinational business, the firm has the political sway to change the world and the economic heft to have a catastrophic impact on that state’s economy. Given that the multinational company is a contemporary idea developed to satisfy the demands of the modern day, conflicts between MNCs and nations would unavoidably arise (Kim and Milner, 2019). On the other hand, the state is still founded on old-fashioned ideas that are insensitive to the requirements of a complicated reality. States with a strong sense of national identity will be deeply offended by the rising levels of FDI and the resulting cultural deterioration.
Privatization of Traditionally Public Utilities
The political events on a global scale have eliminated or significantly changed some preconceptions about the influence and wealth distribution role of utility companies. The fall of the iron curtain also eliminated some of the business strategy justifications for maintaining strict state ownership over utilities, particularly in Europe. Public construction supply has fallen out of favour due to the typically subpar quality of government utilities and shifting perspectives on the functions of the state in the economy. Cash-related restrictions have constrained the potential for government support, and grew and developed even more. Organisations’ services are increasing necessary investment projects, which has given additional incentive for the transformation in the government’s plans to such investment opportunities.
The financial institutions needed high-quality stock to meet the rising demand from private pensions and other financial intermediaries. Neoliberal economics has brought new providers of capital reserves into cross-border investing, making a personal supply of utility companies conceivable (Kuzemko, Goldthau, and Keating, 2017). Last but not least, technical advances in the telecommunications and energy generating sectors have decreased the economic efficiency and lead times associated with the supply of services, increasing the opportunity for competitors in areas formerly controlled by a monopoly.
Privatisation is frequently regarded as a valuable tool for a policy that promotes more significant benefits. Privatising public assets gives them new value and broadens the nation’s pool of privately owned money. Commercialisation is a critical component of most structural adjustment programs run by the IMF or World Bank suggests that academics believe privatisation has some financial benefit (Hodge, 2018). However, residents of developing nations where utility companies are now privately owned appear to strongly oppose it. Governments that include commercialisation in their reforms utilize it as a tool to achieve several macroeconomic and budgetary goals.
Diverse goals have been sought by governments that have privatised. Given the widespread occurrence of the dire economic performance of public firms in many nations and the satisfactory results of their reformation, privatisation is often a way to increase market prosperity. When administrations have been unable or reluctant to maintain financing shortfalls in the public business sector, privatization may also be a tool for strengthening the public finances (Hodge, 2018). Governments with limited liquidity and budgetary constraints occasionally have privatisation to use the earnings to pay down their deficits. Additionally, privatisation may be used to create a domestic assets market, linked to growth.
In most circumstances, privatisation can result in higher manufacturing output. This is significant because, among other things, quality products are often significantly lower in emerging or transitional countries due to poor factor allocation, the use of outdated technologies, and managerial practices. Privatisation may be a way to deal with those problems. Furthermore, if practical, the higher factor production will boost growth. According to popular thinking, the profit motive will motivate private firms to enhance processing parameters in a way the government would have been unable to achieve without such incentives.
Nevertheless, financial constraints drive privatisation rather than a desire to support more effective manufacturing methods. For privatisation advocates, utility companies like those that acquire and transport water, produce and distribute energy, and offer services like telecommunications, sewage, and trash collection make for apparent targets. On the other hand, water and electricity availability are a different story. Although natural monopolies have been privatised, governments still have the power to control them. Therefore their capacity to act in these markets has not been lost. Usually, when disadvantages or natural monopolies exist, government involvement in the market is warranted. However, it is not always clear how this involvement will take place.
The Impact of Outsourcing Production on the Global Scale
The most significant advantage of these systems is that they make US and EU business successful in the global market. Companies can expand their activities and concentrate on their core business functions by taking advantage of the cheaper costs provided by outsourcing. The US mainly relies on outsourcing to make up for all the money lost to imports. Thus, the involvement of third-party specialists contributes to helping to save time and financial resources that will be required to find and hire new specialists. The United States also has to be able to support commerce from other nations since it cannot rely just on domestic sales. When the US contracts with foreign governments, it makes significant investments in those nations, enabling them to expand their economies.
Moreover, outsourcing allows businesses to save a considerable amount of money on infrastructural projects when they outsource particular services. This might be pretty expensive for companies creating AI products and needing assistance with data annotation on the global scale. Even though data annotation is a straightforward activity, hiring data features extracted and paying for office buildings and equipment would be costly. By contracting out such work, businesses save on staff pay and share some of the infrastructural expenses with the external organisation.
Internal business divisions are continuously vying for the funding necessary to adjust to changing government regulations and customer demands in the different countries. In many cases, departments can only make the required modifications after getting feedback or notice that harms the company image as a whole. Although back office duties like data entry, finances due for payment, and many more are sometimes called negative and time-consuming, they must be completed to ensure the company is operating efficiently. The negative part of outsourcing in global scale is that the single error can result in lengthy delays, uncertainty, and financial loss. This is why many businesses outsource these kinds of jobs since the phone company will be in charge of making sure that everything is completed to a high standard.
Free markets promote increasing competition, which typically benefits the economy but can be detrimental to enterprises that cannot keep up. By using outsourcing, new players can enter markets where labour might otherwise be prohibitively expensive. If they had to recruit American industrial workers, a fledgling business looking to produce electrical goods might not be able to get off the ground, but they can now readily locate a willing and inexpensive trained workforce elsewhere. Entry barriers that previously existed due to the capital needs necessary during the starting period can be significantly decreased.
Early adopters in the sector who outsourced will temporarily have a competitive edge, but as more rivals follow suit and novices are encouraged to join, that benefit will decline. The first advantage is lost as soon as everyone gets involved. By fracturing and rupturing the supply chain, outsourcing also fosters new competitors. In other words, new players may enter the market because product design and customer service may be located in one area, but production may be located in another (Kotabe and Murray, 2018). Since every aspect of a business is essentially outsourced, any new firm may engage the same contractors and create the same goods for a comparable price to that of the industry leaders.
Employees may lose faith in their company and feel disheartened if they are aware that their job might be exported to less expensive migrant labour. Even line managers cannot be sure that their employees are safe and secure since outsourcing has expanded beyond unskilled tasks to include administration and intellectual roles (Nyameboame and Haddud, 2017). Job performance and increased job satisfaction may suffer. Furthermore, if a worker or group of workers customers are mistreated or are being underpaid, they have the right to quit and join a new business that will be in direct rivalry with their previous employer. Due to outsourcing’s decreased entrance hurdles, this option is more feasible than ever.
Homogenising Cultural Space
The consequences of global cultural homogeneity in a technologically dependent world and global cultural equilibration have significant ramifications for the obligation to people in other regions of the world who are far away. It is not difficult to comprehend the central importance of the mainstream press to these procedures if internationalisation can be characterised as applying the correct characteristics. The worldwide connectedness between cultures, civilisations, organisations, and individual people; the compaction of spacetime; and the lack of national sovereign rights. This is especially true when people consider technological advancements like the digital revolution found in the outer.
Homogenisation of the cultural space by ubiquitous global brands can occur without showing the negative impact of this process. Therefore, businesses have more reasons to engage with consumers who live far away because of more global brands, worldwide goods like software, and global service sectors (Pieterse, 2019). The global business then encourages travel and friendships worldwide, encouraging non-business interactions between individuals engaged in those enterprises and their families. All these positive changes thereby contribute to the unification of cultural characteristics and the dissemination of the vision of culture as a common characteristic of society.
Media imperialism theories view media as functioning within a single international market, contributing to the homogenisation of culture, as they help spread unified cultural values. They are governed by the international demands of multinational businesses and ubiquitous global brands under the direction of the United States and West European nations when they criticise global dominance. The role performed by the communications-cultural companies is essential to economic control (Pieterse, 2019). The exact economic requirements that control the whole system’s production of commodities and services serve as the primary determinants of television programming. In addition to information, they have an ideological function by fostering support for the principles and institutions of capitalism.
The potential to purposefully or carelessly influence people’s lives in other areas of the world is one of the repercussions of globalisation which, additionally, contributes to the homogenisation of culture. National laws serve as their primary guide to what is suitable and wrong for many individuals. However, it is typical for national laws to stay quiet regarding some deviant behaviours and to impose restrictions on actions that are not universally viewed as immoral. The morality they are meant to maintain, and legal provisions thus have an imperfect relationship. In addition, national regulations often lag behind technological advancements due to legislative delays, creating policy gaps.
The growth of the Internet has perhaps been the most successful ICT application for ubiquitous global brands. Hacker activists have been creating methods to circumvent those regulations, forcing oppressive governments that have long dreaded the Internet to find a way to provide access to it while also trying to manipulate it. ICT so increasingly facilitates international communication. With the Internet, speaking with someone down the main sidewalk may be just as expensive as interacting with someone twelve hours away in a different time zone
Conclusion
Governments are constrained by globalisation because it increases the demand on their budgets. As a result, governments switch their spending away from government investments and toward handouts and subsidies. The desire of citizens to be paid for the hazards of internationalization may increase this change in spending. The concerns of the well-intentioned opponents of global economic integration stem from their view that globalisation would result in a loss of national state authority generally and a decrease in welfare state activities specifically. Depending on the perspective of the observer, this downturn on the supplier side of public social welfare decreases the effectiveness of beneficent regimes.
However, the supply side of the political marketplace is ignored by those who oppose regional economic development and unrestrained systems rivalry by concentrating on the efficiency effect of globalisation. The governments’ significant support for maximizing goals, which steer the election system forward towards the distribution of the market liberalization economic benefits, is the source of the demand-side consequences of globalisation. For instance, the expansion of social assistance programs somewhat compensates those who lose out as a result of globalisation. Thus, the effectiveness effect is undermined by the so-called compensatory impacts of globalisation, suggesting that from a theoretical standpoint, the overall impact of globalisation on the scope of national welfare systems is still unclear.
Reference List
Clegg, S., Geppert, M., and Hollinshead, G. (2018) ‘Politicization and political contests in and around contemporary multinational corporations: An introduction’. Human Relations, 71(6), pp. 745-765. doi:10.1177/0018726718755880
Hodge, G. A. (2018) Privatization: An international review of performance. London: Routledge.
Kim, I. S., & Milner, H. V. (2019) ‘Multinational corporations and their influence through lobbying on foreign policy’. Multinational Corporations in a Changing Global Economy, p. 497-536.
Kotabe, M., & Murray, J. Y. (2018) Advances in global marketing. Berlin: Springer.
Kuzemko, C., Goldthau, A. and Keating, M. (2017) The global energy challenge: environment, development and security. London: Bloomsbury Publishing.
Nyameboame, J., & Haddud, A. (2017) ‘Exploring the impact of outsourcing on organizational performance’. Journal of Global Operations and Strategic Sourcing, 10(3), pp. 362-387. doi:10.1108/JGOSS-01-2017-0001
Pieterse, J. N. (2019) Globalization and culture: Global mélange. Lanham: Rowman & Littlefield.