Marketing Planning Group Assignment

Debate on globalization

Though global business has been growing rapidly in recent decades and globalization seems

inevitable, it is not without controversy, and the critics offer a few key arguments.

1. Some people lose while others gain, both in absolute and relative terms.

2. Countries diminish their sovereignty.

3. National cultures change and become diluted.

4. Governments have fewer ways to monitor companies and hold them accountable.

The debate on globalization will continue as people try to make sure that the benefits of global

trade outweigh the costs for all countries, not just a select few. Through the process, global

organizations like the WTO and UN will work to provide a framework to level the playing field

for all countries, promote and protect the rights of workers and basic human values everywhere,

and encourage companies to be responsible global citizens.

Every day we hear people talk about how the world is shrinking. Advancements in

transportation and communications are bringing people from all over the world in closer contact

with each other, making them more aware of what is available and what they might sell to

people abroad. They may argue about borders, religions and politics. But, take a look around

and you will see many people are demanding goods and services from the same countries that

they may have felt so uncomfortable coming into close contact with. They are sipping Cokes,

paying for meals with American Express cards, driving Toyotas and Mercedes’s and wearing

shoes made in Italy, Vietnam or Brazil.

Global business has been growing rapidly in recent decades because of technological expansion,

liberalization of governmental policies on international trade and resource movements,

development of institutions needed to support and facilitate international transactions and

increased global competition. Because of all these factors, companies increasingly use foreign

countries as a source of both production and sales.

Globalization has become inevitable. All countries permit some level of foreign trade, although

some permit more than others. Most governments have conclusively decided that global trade

and investment can benefit their countries and their people. Private companies have also

realized that the best opportunities for growth and profits often come from outside their home

countries.

Despite the pervasive influence of globalization, it is hard to pin down one definition that will

suit everybody. For our purposes, globalization refers to an interdependent world economy in

which people in one part of the world interact with people in another part as buyers, sellers or

intermediaries.

1. Some gain some lose

Despite the growth of global trade and investment, there’s very little consensus on whether

globalization has benefitted the majority of people it has impacted. Advocates of global trade

and investment, who often come from developed areas like the United States, Canada and

Western Europe, argue that globalization, by giving consumers more choices and forcing

companies to compete, has created economic growth and millions of jobs. This growth has

provided investment for building roads, airports, factories and basic infrastructure in less

developed countries. During the 1990s, foreign investors poured over $1 trillion into developing

countries like India, China, Brazil and Mexico, raising the standard of living faster than most

thought possible in a single decade.

Despite this progress, critics argue that increased globalization has contributed to income

inequalities–both between and within countries. Critics also argue that when companies move

production from a developed to a developing country to take advantage of cheaper labour

supply, they barely improve the economic well-being of their new workers while causing

immeasurable hardship to the workers they displaced. Although this displacement is similar to

what occurs from technological changes, workers react differently. In developed areas like the

United States or Europe, frustration from workers displaced by globalization has lead to

increased support for protectionism rather than job retraining. Critics also claim that the costsavings

from using cheaper labour go mainly to shareholders in developed countries rather than

to consumers or to stake holders in developing countries.