Globalization is a trend that has been fully embraced by some and treated as an unwelcome guest by others. The concept of globalization entails the need for change and further development in order to meet its widespread market pressures. Understanding globalization creates a stronger framework for understanding how it impacts international business and underlying perceptions of human capital. Through the development of a greater understanding there is the possibility of better management of global alignment.
Globalization was first mentioned in 1983 when Theodore Levitt explained how technology would drive the world into a single conversational platform that would result in global markets and brands (Govil & Rashmi, 2013). Markets begin to consolidate and new forms of business develop in order to compete in and traverse those markets. Those businesses that do not factor in the changing market and its globalizing effects may be end losers in the international game.
There are many different ways in which to view the concept of globalization. Globalization can be seen as moving a national state into a global state (Stojanov, 2012). During such transition local workers align skills to the needs of the international community and are capable of working within firms that have international products and services. Companies seek out such local candidates when considering choices of expansion and international investment.
Globalization is a concept of free trade that fits within a Capitalistic structure (van Meerhaeghe, 2012). Such free trade comes with the movement of products, money, labor, and businesses from one part of the globe to the next. Countries are no longer defined simply by their country of origin but become defined by a more transient global business environment. More competitive structures create more business interest and investment.
As these products, business, labor, and investment shift from one place to the next there will be locations that naturally lose out on the benefits globalization has to offer. For example, income equality can result in places like South-East Europe or the Commonwealth of Independent States (Elmawazini, 2013). This is due to the loss of investment, poor governmental structures, tax structure, human capital, infrastructure and other factors that make such places more difficult to conduct business and therefore less lucrative for investment.
As a by-product of greater global awareness human rights and worker rights also become more globalized. For example, globalization of law, legal accountability, human rights, conflict resolution, and doctrines of equal standings become more common (Brysk & Jimenez, 2012). Economics and value systems exist together and as economics become porous across borders the concepts of ethics and human rights also become defined by those new economic assumptions.
At present, there is no single way to measure globalization. Some indexes measure investment, some economic output, some educational attainment, and others human capital earning power. Each of these indexes has advantages and disadvantages but is limited in scope and effectiveness. Using multiple indexes of important key indicators is more accurate than relying exclusively on a few single benchmarks.
Globalization has both positive and negative effects on economic strength. Those countries that are more capable of aligning their systems to the new global structure are more likely to succeed in the long run. As this transition occurs there will be challenges of basic assumptions, adjustments of wealth, needs for new skills, and times of political upheaval. What we believe today may not be what we believe a few decades down the road. Times are changing and with this come new opportunities for success or failure.
Brysk, A. & Jimenez, A. (2012). The globalization of law: implications for the fulfillment of human rights. Journal of Human Rights, 11 (1).
Elmawazini, K., et. al. (2013). Trade globalization, financial globalization and inequality within south-east Europe and CIS countries. Journal of Developing Areas, 47 (2).
Govil, S. & Rashmi, J. (2013). Globalization of Markets. Advances in Management, 6 (6).
Stojanov, D. (2012). Dialectic of globalization and economic science. International journal of innovations in Business, 1 (4).
van Meerhaeghe, M. (2012). Globalization: concept, outcome, future-a continental view. European Journal of Law and Economics, 33 (2).