Globalization: Perspectives, Causes and Effects

Introduction

Globalization is a phenomenon that dates back to the period before the two world wars. However, numerous studies attest that it intensified in after the Second World War. Today, the phenomenon forms an important aspect of the twenty-first century. The effects of globalization have been felt in many areas including the international economic growth, financialization, public administration, and technology, particularly in the telecommunication and transport industry, among other public and individual dimensions. Such elements of globalization can be categorized into economic and non-economic aspects. The research paper discusses the different perspectives on globalization, influencing factors, causative agents, and its evidence as witnessed in its effects on areas such as public administration and economic growth.

Perspectives on Globalization

Globalization is a common subject in many disciplines including economics, sociology, and political science among others. The concept of globalization and world order intensified after the Second World War as nations sought for international peace, restructuring, transparency, and cooperation.1 The meaning of globalization varies amongst individuals, societies, and institutions due to the development of diverse perceptions of the phenomenon.

However, the different definitions depend on the disciplines from which they are derived. For instance, in economics, globalization refers to the integration and convergence of international markets. On the other hand, political scientists view it as the borderless world where state-based demarcations have been buffered as people seek a common practice in governance, economy, identity, and communism. In this case, the world is commonly referred as a global village. Globalization has also been defined in different perspectives.2

Firstly, globalization as internationalization refers to the cross-border relations among organizations that are witnessed in international trade and other economic and political aspects. In this perspective, the public policy and administration have been highly transformed since the end of the Second World War. This set of circumstances can be seen in the emergence of the United Nations, which is an international organization that brings together all the member states to tackle security and humanitarian issues. Secondly, globalization as border openness refers to the removal of state jurisdictions and regulatory barriers with a view of encouraging inter-state interactions in matters such as financial transactions, communications, trade, and cultural interrelationships among others.3

Today, this aspect forms the backbone of the global economy and governance. It also defines international culture and its influence on the public administration. The invention of the Internet and technology has accelerated the phenomenon of borderless societies to an inexplicable state. In fact, the two factors are the most critical accelerators of globalization. Global communication, the spread of information, and technology play a central role in the creation of the commonly known global village.

In addition, globalization has been viewed as a process that takes place over time. Since the nineteenth century, the process of globalization has been taking place as seen in the transition from early competitive capitalism to the modern monopoly capitalism. As an ideology, globalization has been defined as the transfer of ideas between nations. Dissemination of information and the sharing of ideologies amongst the developed economies and developing countries comprise globalization. The spread of ideas such as freedom, individualism, free enterprise, and plural democracy also characterize globalization.

Causes and Accelerators of Globalization

Globalization can be attributed to various causative agents that include economic factors, the influence of dominant states, technological innovations, human expectations, and domestic constraints.4 The most crucial factor that contributes to globalization is the capital accumulation of multinational corporations (MNCs). The rise of transnational companies seeking cheap labor in developing nations has contributed significantly to globalization. Such corporations have taken investments from the dominant and developed states to the less developed countries. This situation as considerably influenced the economic growths of the receiving nations.5

MNCs bring about globalization through numerous ways that include job creation, financial transactions, technological transfer, ideas, and cultural influence in the foreign countries among others. Capital accumulation is a concept given to the economic aspirations of the transnational enterprises as they venture into global markets. The MNCs employ diverse growth and capital accumulation mechanisms that result in rigorous capitalism.

Secondly, global marketing, cheap labor, and favorable production territories have played a central role in the movement of human resources, information, and technology across transnational boundaries. Foreign markets have always provided immense and attractive profitability for transnational corporations since the nineteenth century. Globalizing firms are increasingly sprouting, especially in emerging economies, in a bid to scale up their growth. Consequently, globalization is the ultimate product whose effects continue to be felt mostly by the receiving countries. Since 1992, most advertising firms, especially in the Great Britain and the United States, have continually specialized in commercials of global scale by targeting the furthest consumer in the globe.6

Since the 1990s, globalization has been regarded as a necessity for the success of many businesses. Numerous studies have revealed that the phenomenon is intensifying as the MNCs compete for global markets. Over the last three decades, the growth and global investments by the MNCs have been on the rise since they have strived to colonize and fill the market gaps in third world countries. As a result, developing countries have become increasingly dependent on the multinationals for jobs and other economic benefits. Nevertheless, this set of circumstances has only created room for more international investors to enter the foreign markets.

Moreover, universal production and commodification are crucial actors in globalization. Today, national fabrication of products and services has exceedingly become replaced by global production since manufacturers can outsource raw materials from other countries regardless of their geographical positions on earth. With global financialization, obtaining production material from other countries has been enabled. Therefore, the location of a company in the contemporary world is no longer an obstacle to production. As a result, the idea of developing global factories was coined to build the aspect of interdependence between countries.

The net effect of such undertakings has been the development of international relations and globalization as the trade partners establish a common understanding of each other for mutual benefits. The growth and spread of intangible industries such as the global markets for cultural artifacts are considered unique and new. The consumers of such products continue to form part of the global convergence. This phenomenon is known as commodification.7

Furthermore, the Internet and technology are deemed key accelerators of globalization. The Internet has become a crucial instrument in linking up businesses and international markets. It has the facets of international business environments and the globalization process significantly. The Internet facilitates the transfer of knowledge by providing access to vital information about external business environments, particularly the international dynamics of firms as they seek to go global. Various qualitative studies indicate that the Internet has become an important medium for both small and medium firms (SMEs).8

Indeed, the concept of e-transformation is increasingly becoming a standard measurement for the growth of contemporary firms. Today, e-commerce and online presence are common practices for not only international investors but also domestic firms. Firms that are seeking to venture into global markets can retrieve crucial information for suppliers and target consumers from online sources. Many organizations use the Internet to reach global clients as they provide information on their products and services in turn.

This way, the aspect of globalization comes in. Technological advancement is another component of internationalization. Telecommunication in the twenty-first century has grown to unimaginable heights since people can communicate virtually regardless of the physical distance between them. Communication and spread of ideas are important aspects of globalization. With the emergence of high profile technology in approximately all aspects of humanity, people around the globe have increasingly continued to be alike due to the use of similar technology.9 For instance, the use of mobile phone technology, which is a recent innovation, is now a common global culture.

Another important factor leveraging globalization is the establishment of trading blocs such as the European Union (EU) and capitalism. Through capitalism, many national and international trading entities have been formed with a view of articulating various agendas to governments and foreign corporations. The concept of international integration has led to the formation of many institutions such as the International Monetary Fund (IMF), the World Bank, the G8/G12/G20, the World Trade Organization (WTOI), and the Organization for Economic Cooperation, and Development (OECD) among many other regional institutions.

The institutions focus on forming a common pool of resources and decisions for international matters such as security, conflict resolution, world oil prices, peaceful negotiations, environmental conservation, disease control, tourism trade, and combating terrorism among other key functions. International integration and general concern for a common agenda have accelerated the unbeatable wave of globalization.

Effects of Globalization

Globalization has brought both positive and negative consequences. Despite its effects, states continue to persist with bureaucracy, having remained unchallenged since the emergence of internationalization. However, numerous researchers have affirmed that the territorial state will not decline because of globalization.

Positive Effects of Globalization

According to Farazmand, the relationship between business and politics, capitalism and the state and public administration will continue to coexist as it has been for millennia.10 At the outset, globalization has brought about global financialization that involves the persistent integration of different national economies within global monetary markets that yield growth in commercial relations and transnational financial flows on a global scale. Secondly, internationalization represents a considerable transformation in the environment where financial entities develop their businesses. As a result, it has important implications for the corporate governance of financial bodies that strive to measure up to the changing situations.11

As firms go global, they have to employ various measures to attain particular international standards for their operations ranging from production, communication functions, and regularization of product quality. In addition, globalization fosters a comparative advantage to different nations as they specialize in areas where they have become more competitive.12 Specialization leads to maximization of benefits. It promotes international trade since consumers can trade what they have for what they need from the best producers. This situation is the basis of the Ricardian theory of comparative advantage in international trade.13

Furthermore, globalization sets the pace for economic growth as it unleashes the energies of a latent economy. It has led to a commercial interdependence amonsgt many states. The developed countries invest in transnational corporations and SMEs in developing nations. Developed countries have the capital energy to exploit the untapped resources endowed by the developing countries. For instance, the extraction of natural resources in African states is done by MNCs from countries that have the technological capabilities and expertise in mining. The countries where the resources are found benefit as some form of employment is provided and the circulation of the financial transaction between the MNCs, employees, and money transfers that occur amongst the involved states. This relationship can be viewed as mutual interdependence among the nations.

The MNCs enjoy cheap labor in the foreign developing countries. On the other hand, the destination country gains from the creation of employment opportunities and extraction of important resources that promote the local economy. Therefore, globalization contributes to the maximization of the universal wealth whilst increasing the international economic gains. Capitalism is spread from the developed nations to developing countries. This situation in turn leads to growth and competition for growth; hence, the effect of economic development is felt. Furthermore, capitalism fosters democracy.

The realm of globalization fostered through e-transformation and the use of the Internet has resulted in significant benefits to the global consumer.14 In the wake of e-commerce, firms have an opportunity to reach global markets and advertise their products without having to travel across transnational borders. This state of affairs has immensely has benefited many consumers since they have gained access of assessing the economic value of products that are delivered by different companies. In this sense, globalization has enabled easy access to information amongst global citizens. Through the Internet, transactions have become fast and cheap worldwide. The emergence of e-banking services has lowered the costs of production substantially.15

Globalization has resulted in peaceful stability and security. As economies become interdependent, the significance of security comes to mind. Therefore, it turns out to be the concern of every state to ensure that security prevails to support the growth of businesses. Cases of insecurity undoubtedly hamper economic growth. For instance, the wars in Yemen and Syria among other unstable states are the concern of the world. Terrorism is also a major threat to humanity and travelers such as businesspersons and tourists who seek leisure in diverse global destinations.16

The world has come together to fight against terrorism in a bid to sustain the world trade and international relationships. Organizations around the world acknowledge the power of internationalization. When the world’s resources are pulled together through agencies and various governmental arms, a lot can be achieved to curb insecurity and foster international stability.17 This set of circumstances can create a favorable environment for the international trade to prosper.

Negative Effects of Globalization

While globalization is beneficial, it comes with a number of adverse impacts. AT the outset, it leads to the dependency of less developed economies on developed ones. In the third world countries where MNCs have flocked every sphere of investment, the local populations depend on them for jobs and community outreach services. The multinationals have a tendency of offering low terms of work as they seek to maximize profits at the expense of those countries. Numerous studies have revealed that others engage in criminal activities that are not easy to unravel. As a result, such countries are stage-managed to remain in dependency state; hence, hindering development and economic growth.

The ultimate effect is the loss of sovereignty since economic decisions are largely influenced by the corporations. Globalizing capitalism has contributed to a compromised state of sovereignty as many countries have given up their policy-making abilities to the MNCs. In fact, the constitutions of various countries in the developing world have provisions for regional collaborations that replace the unilateral role of states. For instance, since the 1970s, the IMF and WTO have pushed for autocratic moves on the monetary and fiscal policies of developing member states. This situation has forced the countries to make constitutional amendments to suit the agendas of the MNCs. The notion has created a cycle of dependency on corporations whose ideologies are in line with the dominant states.18

Apparently, globalization is a potential threat to democracy and community participation in international functions. Since transnational organizations such as the IMF and WTO prescribe and dictate fiscal, monetary, and other structural policies to developing countries, the citizens feel negated and alienated from their democratic rights. As a result, they are deprived of their power to influence policy preferences. Their national and human interests are buffered to favor the welfares of the multinational businesses. This phenomenon has accelerated poverty, social disintegration, and environmental degeneration. Substantial evidence reveals that multinational corporations are prone to exploitative practices with little concern for the environment and community development.19

The elected governments are also prevented from making some decisions due to the influence of the member states of the industrialized nations. The corporations assume that whatever policies passed by the dominant states are unquestionable by the less developed countries. This notion has been viewed as the modern face of colonization of the developing countries. As a result, they appear to be forcefully embracing the idea of globalization without having to undergo the gradual transition process. Consequently, the countries can only survive in the era of globalization through dependency. This state of play results in underdevelopment and lack of innovation. Moreover, community displacement in many less-developed nations is a common practice influenced by globalizing corporations.20

For instance, hardworking and self-sufficient farmers whose activities served and sustained their local communities and contributed enormously to the national economy have been displaced and their fields taken over by globalizing agribusinesses. Not surprisingly, such disarticulations have been supported by the collaboration of subservient governments and administrative elites. As a result, the farmers end up in urban places seeking undignified wage-earning jobs. This set of circumstances exacerbates the existing urban dilemmas.

Moreover, globalization has detrimental effects on the values, beliefs, and audacities of different communities. As the global culture takes shape, people share common values, ideas, and norms worldwide. As a result, the traditional beliefs and practices fade. For that reason, it leads to erosion and downgrading of cultures that have united the communities for many years.21

This unity is increasingly breaking up as people adopt westernization. Distinct people who possess unique cultural attributes such as language and other traditional ways of life have abandoned their customs to be assimilated into the wider global humanity ethos. Cultural elements such as food, language, history, and social relationships define an individual’s heritage and identity. It has been affirmed that people, and nations stand to lose their identity without their national cultures.

Effect of Globalization on Public Administration

Predatory globalization affects public administration in that it threatens state sovereignty, democracy, and public interests. In addition, it contributes to mass poverty and broadening of the rich-poor gaps in the developing countries. Substantial evidence suggests that globalization expands the division between powerful and powerless nations. As the dominant countries colonize the developing economies in the name of corporations, state democracy procedures continue to fade. The corporations act for the best interest of the dominant states. The powerlessness of the less developed nations exacerbates the gap between them and the influential nations.22

The result is an overdependence on the powerful nations. This state of play lowers the dignity and sovereignty of the developing nations. Numerous researchers posit that public administration has survived and will continue to thrive even as globalization intensifies. However, they have indicated that it is undergoing a transformation in terms of character and behavior because the administrative welfare is being absorbed by the coercive corporatist states. Globalism is regarded as a natural phenomenon of capitalist development that is shaped by a rapid transformation in favor of the dominant states. This state of singularity is called predatory globalization.

The concept describes the greedy behavior of corporations as they seek to maximize profitability at the expense of the democracy, sovereignty, and dignity of the less powerful states. Multinational corporations achieve their latent growth and capital accumulation by focusing on market deregulation campaigns, cheap labor, disregarding environmental protection, and affordable resources among others. This behavior is a threat to the near future of public administration regardless of the aforementioned benefits of globalization. Predatory capitalism asserts that corporations recognize a borderless society with no rules of the game to control their investments other than their own. Their sole aim is reaping absolute profits. As much as globalization benefits are recognizable, it will continue to face criticism because poor countries are not involved in core decisions.23

The wave of globalization has caused numerous effects that have in turn placed an enormous burden on governments of the affected countries. Such demerits include massive unemployment, weakened economies, spreading poverty, enormous national debts, escalating prices of goods and services, and shrinking opportunities. Moreover, the impact has extended to social and political control apparatus, militarization, and securitization of the globe that have in turn thrust more people in fear of uncertainty, insecurity, and dependency as many people continue to work as more or fewer slave laborers.24

Dealing with Globalization

The above discussion evidences that the world has witnessed the development of globalization processes combined with the plurality of unequal economic development of the diverse regions and countries as economic crises continue to occur repeatedly. Under such circumstances, it becomes significantly necessary to direct the national economies towards overcoming the adverse effects of globalization whilst building on the advantages of their positive effects both in the near future and in the long-term. For that reason, this article proposes innovation as the key strategy that developing countries ought to employ in an attempt to safeguard their sovereignty and promote their economic sustainability.

Innovation can be embraced various sectors with a view of altering dependency on multinational corporations. To achieve self-dependency through innovation, there is a need for capacity building in areas such as public administration to redefine the national policies regarding economic growth, poverty reduction, education, healthcare, and security among others. The creation of an enabling environment for local investment and innovation is the stepping-stone to dealing with the negative impacts of globalization. 25Furthermore, the developing countries need to rise and put public participation first as a way of upholding democracy even in matters relating to transnational corporations such as the WTO and IMF. The people’s voice must be represented in the policies outlined by such corporations.

The public administration should not surrender the country’s sovereignty to the influence of the multinationals. Instead, the national identity and interests should define any agreements that permit MNCs to operate within their territories. Community development and environmental conservation should come first before any agreements are reached.26 Periodic review of the MNCs’ operations should be conducted to gauge the level of commitment to the initial agreements with a view of preventing exploitative behaviors that adversely affect the public administrative welfare. This strategy can narrow the already wide gap between the rich and the poor societies and nations.

Written prescriptions of how the country and its people stand to benefit and the means of channeling those benefits can help control the autonomy of MNCs. Poor institutional capacity that arises from corporatization, commercialization, and downsizing has led to massive institutional failure. However, institutional failures serve as a developmental strength for regulatory states since public administration ascends to address market catastrophes too. Capacity building in the numerous sectors can help countries achieve a milestone as it reaps the benefits of globalization whilst protecting them from the adversities.

The power of the Internet and technological advancement can be harnessed to promote economic growth and independence in developing nations. The public administration needs to set up the necessary infrastructure for citizens to access the Internet and technology with a view of integrating them into their daily lives. Furthermore, various key strategic human resource management approaches have been proposed to help deal with globalization. The approaches involve reform of the public sector institutions and organizations to control privatization, public investments, partnerships, civil service, and bureaucracy. They also encourage training in HRM practices and organizational leadership besides collaboration between professional elites and implementation of public national policies.

Conclusion

In the past three decades, globalization has intensified significantly. As aforementioned, the definition of the phenomenon is based on different perspectives. Regardless of the definition, the effects of globalization are undoubtedly evident as the world shifts towards a convergence of ideologies, cultural practices, behaviors, knowledge, and technological developments among other observable transformations.

Through technology and the Internet, producers, consumers, and suppliers have gained access to information and global trends. Along these lines, they have learned to assess the value of universal interrelationships prior to venturing into global businesses. The article also provides an insight into the adverse effects of globalization on the developing countries. These adversities include exploitation of resources, worsening democracy, and over-dependence on multinationals among others. The future of developing nations has also been examined with a view of suggesting some conventional strategies to deal with the effects of globalization.

Bibliography

Farazmand, Ali. “Globalization and Public Administration.” Public Administration Review 59, no. 6 (2015): 509-522. Web.

Farazmand, Ali. “Innovation in Strategic Human Resource Management: Building Capacity in the Age of Globalization.” Public Organization Review 1, no. 4 (2004): 3-4. Web.

Farazmand, Ali. “The Future of Public Administration: Challenges and Opportunities: A Critical Perspective.” Administration & Society 44, no. 4 (2012): 487-517. Web.

Klinger, Donald, John Nalbandian, and Jared LLorens. Public Personnel Management. London: Pearson, 2009. Web.

Stevens, Thomas. “Victims and Victors: Facing the Challenges of Changing Times.” Journal of Economics & Economic Education Research 11, no. 3 (2010): 87-106. Web.

Footnotes

1 Ali Farazmand, “Innovation in Strategic Human Resource Management: Building Capacity in the Age of Globalization,” Public Organization Review 1, no. 4 (2004): 3.

2 Farazmand, 3.

3 Ibid., 3.

4 Thomas Stevens, “Victims and Victors: Facing the Challenges of Changing Times,” Journal of Economics & Economic Education Research 11, no. 3 (2010): 87.

5 Stevens, 88.

6 Farazmand, 4.

7 Stevens, 89.

8 Ibid., 90.

9 Ibid., 91.

10 Ali Farazmand, “Globalization and Public Administration,” Public Administration Review 59, no. 6 (2015): 509.

11 Farazmand, 510.

12 Stevens, 91.

13 Ibid., 93.

14 Stevens, 94.

15 Ibid., 95.

16 Ali Farazmand, “The Future of Public Administration: Challenges and Opportunities: A Critical Perspective,” Administration & Society 44, no. 4 (2012): 487.

17 Farazmand, 488.

18 Ibid., 489.

19 Ibid., 490.

20 Farazmand, 491.

21 Ibid., 492.

22 Stevens, 90.

23 Farazmand, 499.

24 Ibid., 500.

25 Donald Klinger, John Nalbandian and Jared LLorens, Public Personnel Management (London: Pearson, 2009), 24.

26Farazmand, 502.