The term globalization refers to the process of integration of governments, cultures, economies and technology. Such integration happens due to the trade agreements and treaties between two or more countries. Globalization have different impact on different social institutions, groups, and cultures. For instance, it provide expansion opportunities for conglomerates and culturally it may results in ethnocentrism, zenocentrism and cultural diffusion. Moreover, Globalization also results in social evolution, most rural societies evolve into urban societies because of globalization.
The globalization strategy has been spread in the world with unprecedented pace. Governments have promoted globalization via fiscal policies and trade agreements (Such as NAFTA). Moreover, technology has also played its part in promoting globalization. People are more aware of economic trends and investment opportunities than before, because of information technology. Thanks to IT now transfer of financial assets between two counties are simplified and quick. Because of Globalization the operating cost of the conglomerate have reduced by hiring cheap labor in developing counties and easy access to raw material. Furthermore, cross border trade, communication channels have improved between the countries over the years, which have lowered the transportation cost.
Pros and Cons of Globalization
Globalization was a strategy pitched for the betterment of living standards of people in developed and developing countries of the world. In other words, the strategy was designed for the betterment of whole world. Globalization provides job opportunities in developing countries, multinational corporations invest in developing countries and provide different job opportunities to inhabitants. Job opportunities change the living standard of inhabitants, they can afford to buy different products from the market, dine in restaurants and can fulfill their basic needs. Furthermore, it also benefits the state economy, companies pay taxes to government which helps to increase GDP. On the other hand, it may have had negative impact on the lives of the people living in developed countries. Particularly, Blue collar job holders suffered in developed countries because most of the conglomerates have shifted their manufacturing units in developing countries, because of cheap labor. Due to which, many people have lost their jobs or possible job opportunities in developed countries. Whereas, many people also have benefited from globalization in developed countries because now they can buy cheap products which is made in developing countries thousand miles away.