The Pros and CONS of Globalization

1
The Pros and CONS of Globalization

• Where do you stand?
• Key themes to consider
• Impact on Labor
• Impact on Equality
• Impact on Government
• Impact on the Environment
• Impact on Culture and Community

2
Impact on Labor

• Positive effects
• Increased job opportunities
• Upgraded education system
• Increased training

• Negative effects
• Job displacement
• Loss of industries or economic groups
• Lowered labor standards
• Downward wage pressure
• Decreased union power
• Diminished social contract

3
Impact on Equality

• Positive effects
• Increased income / reduced poverty
• Increased wages for education or technically
  skilled
• Improved economic conditions
• Rich become richer
• Greater access to goods
• Lower cost of goods
• Increased food supply (in some countries)

• Negative effects
• Greater disparity between haves and have-nots
  within and across countries
• Some downward pressure on wages for the poorly
  educated or unskilled
• Worsened economic conditions in marginalized
  countries
• Poor become poorer

4
Impact on Government

• Positive effects
• Increased economic development
• Expanded infrastructure
• Transfer of modern management techniques
• Greater interdependence among business partners

• Negative effects
• MNC power increased
• MNCs externalize cost to countries
• Competition results in too many concessions
• MNCs influence local policies
• Companies incorporate in low tax countries
• Pressure to reduce social benefits

5
Impact on the Environment

• Positive effects
• More efficient use of resources
• Increased demand for and transfer of more
  efficient technologies
• Increased incomes lead to greater concern for
  environmental protection

• Negative effects
• Increased consumption
• Advertising creates artificial needs
• Greater use of fossil fuels (increased travel)
• Increased surplus and scarcity
• Increased degradation from unregulated businesses
• More factories require more infrastructure

6
Impact on Culture/Community

• Positive effects
• Increased cultural exposure and understanding
• Closer cross-border ties

• Negative effects
• More mobility disrupts social life, particularly
  in remote or rural communities
• Disintegration of local communities
• Cultural homogenization and monoculture / reduced
  cultural diversity

7
Globalization Pros and Cons

• Globalization as moral conflict
• Impacts of Globalization
• Increases economic interdependence
• Creates winners and losers
• Implications of the debate
• For academics
• Need for more objective research
• Need to question assumptions and be open to
  alternatives
• For companies
• Be aware of multiple stakeholder interests
• Follow the guidelines of the UN Global Compact
• Consider the triple bottom line

8
Implications for Managers

• Need for lifelong learning
• The most valuable asset is the ability to learn
  how to learn (Thomas Friedman, The World is
  Flat)
• Responsiveness
• be alert for changes and quick to respond
• Adaptability
• know how to work with others
• be comfortable with uncertainty and ambiguity
• Having a global perspective
• see the big picture (global economy/whole
  organization)
• Having a local perspective
• understand the details of operating at the local
  level