Globalization can be viewed as one of the major influences for the world’s progressions over the past centuries. It is comprehended that globalization has the potential to make countries and societies richer via free trading or little trade barriers providing knowledge and information to people around the world. Others perceive globalization negatively and view it as a major factor to exploit the poor while the rich gets richer around the world.
Ultimately, international trade has brought global integration with the desire of a free global market with little trade barriers granting competition across borders. This paper will describe in depth the definition of globalization; identify the associated challenges and the opportunities that lead the world to continue to develop. Definition As a general definition Globalization is define by the dictionary as the “the process enabling financial and investment markets to operate internationally, largely as a result of deregulation and improved communications” (Globalization, n. . ).
Basically, businesses in domestics and national markets will investment their funds in international markets around the world. Their interconnectedness of diverse markets will increase international trade, economic power and cultural exchange with a minimum of trade barriers. Banking dictionaries interprets the definition of globalization as “interdependence of buyers and sellers of financial instruments in financial centers around the world” (Globalization, 2006).
Globalization has created a high demand for international banking. Banks around the world have facilitated foreign businesses with alternative to cash management payment. Today, business has the facility to exchange payments with banking documents such as Letter of Credits which secures payment in exchange of goods minimizing risk of lost. Technology also plays an imperative role in the performance and effectiveness of international banking and their interconnectedness between overseas banks and customers around the globe.
Improvements in information processing, telecommunications, and financial technologies have facilitated greater geographic reach by allowing institutions to manage larger information flows from more locations and to evaluate and manage risks at lower cost without being geographically close to the customer” (Berger, Dai, Qinglei, Ongena, Steven, & Smith, 2002). Globalization Challenges Globalization brings various challenges that countries and businesses will have to address. First, governments will have the challenge to make sure that the advantages of globalization are evenly expanded thru the nations.
Secondly, businesses and other identities will have the challenge to learn to overcome the fear that globalization will lead them to instability; especially in third world countries. Third, countries and businesses will have the challenge to overcome their fear based on the consequences that increased global competition will bring them. Many believe that increased global competition will harm employment rights, its practices, and wages. Lastly but not least, complex problems linked to globalization can not be ignore or to be utilize as motives to evade looking for alternative solutions.
Alternative solutions should always be in the best interest of countries and business. Businesses and civil societies will face the challenge to deal with complicated matters of trade, global financial barriers, and relocation. Organizations from these civil societies in the third world countries will be challenge to face repercussion contrary to globalization, which do not condone multilateral cooperation. Global bureaucracies will face the challenge to look up close how civil society groups are funded.
Civil societies refer to: foundations, financial institutions, corporations, and any other non governmental organization. Multilateral institutions which are governmental institutions will face the challenge of being question about their transparency and participation. Furthermore, these multilateral institutions do not consider any civil society participation when making a decision. At last, countries that practice in globalization such as the “Group of Eight” will face the challenge to discuss how to maximize benefits and minimizing costs.
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Opportunities Associated with Globalization There are a wide variety of opportunities that come along globalization. The Small Business Encyclopedia references to it as “the process by which the economies of countries around the world become increasingly integrated over time. This integration occurs as technological advances expedite the trade of goods and services, the flow of capital, and the migration of people across international borders” (Globalization, 2008). First, Globalization brings the opportunity to free trade which brings a subsequent effect on the global economy.
Free trade will encourage more trade which increases financial flows. By having increased financial flows, business and countries will have financial power that can be redistributed to pull impoverish countries up from the bottom. Secondly, globalization will give the opportunity to create transnational regulatory frameworks; “a system of regulations and the means to enforce them, usually established by a government to regulate a specific activity” (Regulatory Framework, 2009). It will prevent countries from having less control over their particular economies and industries.
Globalization has had an increasable positive effect on businesses and nations world wide. Globally, it has generated a wide number of jobs and has made various goods reachable and affordable in the West Hemisphere. It has help to develop third world countries by creating affordable utilities services such as phone services to their society as well as the internet which is the strongest link to interconnect and interchange data from different hemispheres at a faster pace. Finally, globalization has relocated millions of dollars from wealthy countries to under develop poor countries bringing to them debt relief.
Now, it is extremely important for the leaders of these countries to maintain a high level of governmental and economic stability in order to maintain current foreign investments and future ones. Otherwise, corruption will take over these under develop countries. Conclusion In conclusion, globalization has impacted the world’s economy and cultures. Third world countries have benefited with an increase in manufacturing of goods and services especially for international trade with very little trading barriers.
The integration of global trading has opened the doors to civil societies from powerful developed nations to outsource and invest their funding internationally. For instance, Multinational Corporations outsource across the hemisphere in order to maximize benefits and minimizing costs by finding cheaper labor, flexible regulations, and raw material. Globalization has helped develop third world countries communications giving faster access to negotiate and trade. Globalization has its pros and cons and societies must be in the look out to prevent hindrance; either way globalization will always benefit the world.