Good and bad effect of Globalisation Give AnSwEr
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Globalization has brought benefits in developed countries as well as negative effects. The positive effects include a number of factors which are education, trade, technology, competition, investments and capital flows, employment, culture and organization structures
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Explanation:
positive effects
Global market
The privatization of industries owned by the state has enabled the emerging markets to be successful. Most of the companies are increasing the consumer demand through extension and expansion of their value chain to international levels. As a result, the positive effects of globalization are expressed by the rising transactions across the borders.
Globalization has resulted in the formation of multinational corporations. The concentration of corporations in specific geographical economies has led to investment in other new geographical areas, where market competition is very high. Due to increased competition, the corporations continue to enlarge their market, in order to enjoy the economies of scale. This is because globalization enables economies to compete fairly at all levels, hence attracting investors.
Competition
Competition in the market is largely due to globalization. As a result, the positive effects are visible, since global competition leads to products of high quality. The enhanced quality of both products and services are based on production approaches of customer demands and customer services.
For domestic companies to survive in the market, they are forced to raise their customer satisfaction levels, as well as their standards, while fighting competition from foreign companies. Besides, a global product must live to its goodwill when it gets into a new country. For example, the competition between Samsung and Apple has raised the market standards, as well as the customer service. Also, the two brands are living on their goodwill to survive the competition.
Culture
Globalization has resulted in numerous positive effects on culture. There is no single civilization that had all good practices. Instead, the coming together of various cultures has made the world today a better place. The welcoming of people from various backgrounds and civilizations has resulted in the creation of new cultures, thus leading societal growth.
negative effects
Environmental Damage
Increased production means increased utilization of natural resources. Besides, increased trade results to increased transport, which uses fossil fuels. As a result, pollution has increased, leading to climate change. The changes in climate are now a serious threat to humanity and the future of the world, all because of globalization.
Fluctuation in prices
Globalization has led to increased market competition, hence leading to fluctuation in prices. For example, developed countries like the USA have been forced to reduce their products prices, because countries such as China offer the same products at cheaper prices. This is because the production cost in China is lower than in the USA. As a result, for developed countries like the US to withstand the competition and have customers, they are forced to lower their prices. The impact is adverse, as the ability to sustain social welfare in the US gets reduced.
Job insecurity
Due to globalization, most global economy jobs are insecure and temporary. The impact is mostly felt in developed countries since they can outsource cheaper white collar and manufacturing jobs. For example, wages and manufacturing costs are lower in India and China, making countries like US and UK to outsource cheaper labor. The effect is people in developed countries losing or having fewer jobs.