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The Pros and Cons of Taking Your Business Global

Eugene Vasilyev 
What is Globalization?

Globalization is a process of interaction and integration among the people, companies, and governments of different nations; a process driven by international trade and investment and aided by information technology” (globalization101.org). 

Globalization is not a new concept, yet with the development of information technology this process has increased to a rate that has never been seen before. This process has effects on culture, economic development, environment, and political systems. Some of its results are positive while others are negative.

Higher Quality Goods

Globalization has been able to bring about products that have a high quality. One of the reasons for this is specialized labor. Trade has increased tremendously with globalization. So a country no longer has to produce all the products that it needs but instead it can focus on producing products that it is good at. Then it can export the products that it makes and import the products that it needs from other countries that are specialized in those products. In the end both are happy and both have a high quality product.

Less Expensive Goods

Not only has the quality of the products increased with globalization, but the products are less expensive. This is due to the division of labor, very closely tied to the specialization of labor mentioned above. A country should only produce the products which can produce with a low cost compared to other countries. Also, out sourcing has helped decrease prices for companies drastically. Apple no longer manufactures any of its products. It designs and engineers the product and then outsources to Asia. They understand that they are good at engineering and design and that Asia can manufacture their products at a lower cost than they would be able to. 

Increase in Economic Development

More and more companies are taking advantage of the ease of doing business internationally. Most of the outsourcing that companies do to achieve a lower cost goes to emerging economies where labor is much cheaper. Therefore many companies are investing in the economies of countries that are poor and have a lower economic development. Over time these countries should have higher economic development and poverty should decrease. Examples of this can be seen all over the world: China, Vietnam, Brazil, and Mexico just to name a few. 

Loss of Uniqueness 

With good there also comes bad, globalization in some cases seems to destroy the uniqueness of every culture to produce one universal culture. Many people consider globalization a kind of “Americanization”. Although this statement is false, it does hold some truth. Many places that were considered unique and that have a historical significance are slowly starting to look like other places around the world. An example of this would be with Italy's historical downtown locations that are beginning to look like America with many little fast food shops arising and giving those locations a very different look and feel. Most of the time the countries with the most economic power are the most dominant and therefore their culture is spread to the weaker countries. Some cultures are in danger of extinction. 


We mentioned outsourcing as a positive effect to keep the cost down for everyone, but it also has a negative side to it. Companies often outsource to developing nations and do not pay attention to the way that their manufacturing is done. While the factories in those nations stress on getting work and do not pay attention to the pollution they produce (sometimes hazardous waste). The only thing that these factories are worried about is keeping their costs down to be the lowest bid compared to other factories or even other countries. In the US there are certain codes that companies and factories have to follow that can be very expensive. Companies can just build another factory in another country that does not have these codes. The problem still remains, pollution is still being created. 

Race to the bottom 

Companies that want to outsource are most of the time worried only about price. To give these companies the lowest price possible not only is the pollution issue overlooked but also working conditions of the people employed in those factories. Companies and countries create a downward pressure on wages and working conditions. Instead of investing and benefiting the economic development of the country, sometimes the opposite happens. Globalization- Good or Bad? 

In conclusion, with globalization come many benefits but also much harm. So is globalization good or bad? It depends what you do with it. It is our job to be aware of the complications that globalization brings and we need to be ready to address them.  





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