Globalization is the process of expanding globalism and denotes the increasing of economic, communication, and culture across national boundaries. As such, globalism is the world’s underlying primary network “while globalization refers to the “dynamic shrinking” of the factors that divide the world economically and socially.
According to the above definition, globalization has transformed the economic, political, cultural, communication and other aspects of human life in a fast and robust manner. Moreover, national boundaries of the countries are increasingly melted; thereby, time and space have become fluid. Indeed, globalization is not a new concept. It is coming over the century because of both men and women have had globalization ambition from the past. Nowadays, globalization is rapidly changing with the development of technology in respect of the modern world.
On the other hand, globalization is a multi-vocal concept, and it is multidimensional. There are four dimensions of globalization such as economic dimension, political dimension, cultural dimension and ecological dimension. Under the economic dimension, there are three perspectives which are internationalization of trade and finance, the enhanced role of international organizations such as IMF, World Bank, WTO and increasing power of transnational companies. In this global economy, transnational companies are working as movers and shakers in respect to the globalization process. Transnational corporations are playing a vital role in the globalization process. The main driving forces of economic growth are the activities of transnational corporations.
When it comes to the term of transnational corporation, i.e. an economic entity operating in more than one country, whatever their legal form and does not consider any particular country it’s corporate home. Apple, Nestle, Unilever are a few TNCs.
AS mentioned earlier, it is not wrong to say that TNCs are the shapers and drivers of globalization. According to Fitzhardinge, Holder, Wheatley and Clarke (n.d.), TNCs drive and shape globalization in different ways like,
Through Cheap International Marketing.
TNCs have emerged in highly industrialized North Countries. But, with the introduction of neoliberalism and international trade organizations like WTO, TNCs spread their activities in South Countries as they found out that there is ample cheap labour and underutilized resources in South. So, the TNCs establish most of their manufacturing plants there. TNCs regularly use the huge assets of individuals for modest work in LEDCs, for example, China and different pieces of Asia and Africa. There was an argument saying that this result in a decrease in employment opportunities for TNCs mother countries. But, most of the higher positions of the TNCs established in the South, is secured for people in the mother country. They hire people from the South only for cheap labour.
By investing in a developing country
Most of the South Countries don’t have a minimum wage limit. So, through this, TNCs can benefit from cheap labour. This will reduce their production costs and increase production efficiency. As TNCs cost of production is low, they will end up gaining more profits than local companies. This helps TNCs to secure their position in the market as market domains. Even though TNCs give employees a wage, they most of the time, exploit their labour. This creates sweatshops. Recently, Nike was blamed as a sweatshop. Some African countries depend a lot on these TNCs. Another critical aspect of these investments is that some of the large transnational companies have an annual revenue more significant than the GDP of some countries.
Through the concept of the ‘Uninformative Product.’
This is the concept where a company launches one single product, one after the other. This creates a desire among people to have the most recent product. This is what Apple Inc did. They launched iPod Classic at first, followed by iPod Nano, iPod Shuffle, iPhone and iPad etc.
By destroying local competitors in the LEDCs
With the benefits they gain from cheap labour, TNCs cost of production remain at a low level. So, they gain huge profits compared to local companies, and this often makes TNCs market dominants. Most of the local companies shut their operations as they can’t compete and survive with TNCs.
Through the use of advertising
Most of the products of TNCs are advertised through creative advertisements. For instance, Philips is a TNC that originated in the USA, and Unilever is a British-Dutch TNC. But they have spread their operations and sales in tropical countries. To attract people in tropical countries for their products, they seek the help of celebrities like Bollywood actors. Not just their products, they have also promoted ideas and concepts through advertising. This helps TNCs to embed their products in peoples’ mind. For instance, Sunsilk is a Unilever shampoo brand, and it promotes women empowerment through advertisements.
By improving the quality of living
Here, through TNCs, lots of global products come to the market. With that, people tend to buy those stuff, at least to try those. Also, with employment opportunities, TNCs create means of income generation to people.
By promoting North culture in South
Inside of a TNC is the culture of North Countries. This is what people in the South see when they go inside those companies for jobs. So, the clothing, behavioural patterns, language etc. of the North countries is often followed by the South Countries. This is how southern culture has changed through time.
By introducing new technology
Most of the South Countries are either developing or underdeveloped. With the establishment of manufacturing plants by TNCs often help such countries to embrace new technology. It benefits south countries towards their economic growth. For instance, even the concept of division of labour was introduced to tropical countries by these TNCs to accelerate the production speed and efficiency.
Considering all these factors, we can conclude that TNCs play a vital role as the shapers and drivers of globalization.
Apple Inc. Vs Globalization
The term globalization effect on the economic, cultural, political systems and human physical well-being over the past decades. Everything in today’s world has its benefits and costs. Globalization and advancement of technology have opened the gates to Apple companies to develop their organization without boundaries across the world. But some people argued that the advancement of globalization affects minority people rather than educated ones. These advantages and disadvantages can come from different angles of dimensions such as economic, political, cultural and ecological. In the early stages, Apple was a primary company, but globalization allowed them to be a multinational company. And, with the help of globalization, Apple started to outsource their products and components at a lower cost. The invention of the iPod brought them great success. But with the impacts of the globalization negative issues also raised.
Merits of the globalization process can be better explained in different ways, from the economic perspective opened in world economies begun in the 1970s. Brand policies were developed by accelerating the globalization phenomenon. World exports increased during the 1960 to2010. These activities helped to develop the interaction between different regions. With the financial perspective, the neoliberal policies in the financed world opened gradually. This has contributed to the awakening of the global financial markets. From a cultural perspective, multiple habits, attitudes, perceptions share among local communities. And with the political dimension’s states allow companies to do their economic activities without barriers. From the viewpoint of apple, company globalization gave the following advantages, such as improving policies for free trade, and stable politics in developed countries give them chances to distribute their products all over the world. Stable economies, the rapid development of growth of the countries gave opportunities expansion of apple. Also, they have created more than 100000 jobs to people all around the world. With the mix of different cultures using mobile access started to grow. The growth of cloud computing increase in technological interact business; the growth of the mobile market is some critical pathways to the success of apple. And from the ecological aspect of business sustainability, energy efficiency trend also affects apple company to become one of the top companies across the world.
When discussing demerits of the globalization process from the viewpoint of Apple company, Donald Trump’s government regulations and tariff rates bring a significant disadvantage. Also, with the globalization, the job crisis in the US has started. The main category affected the most is middle- and low-class labour force. Income disparity became a threat because highly educated people in the USA are the ones who had employment opportunities. Also, dysfunctional culture, unfair promotions and compensations began to rise. Apple has inelastic demand for its products, so there was a risk of the downturn of sales. Competitors and innovations started to rise with the reduction of barriers in the countries. For example, apple face a new challenge from android phones from google. In the ecological side, their most significant issue is the high consumption of electricity, and in 2013 one of their suppliers in China polluted a river badly. So other than that globalization creates more disadvantages such as spreading the crisis, inequality was creating so fast also create a race to the bottom and occurring environment effects such as greenhouse gas emissions, global warming and air pollution. United nations found latest demerits they are climate actions did not accelerate for example we saw wildfires, hurricanes, extreme weather events in last years, inequality of distribution of living standards health and education affects peoples and societies. It is not wrong to say that the spread of COVID 19 pandemic accelerated due to globalization with the aid of tourism and international trade. COVID 19 pandemic also affects globalization in different ways; for example, according to the WTO world, exports will go down rapidly. Also, the collapse of international travel started to increase.
To overcome these challenges, Apple took actions such as to technology challenge they improved their products in terms of physical and technological capabilities, and they introduced a new version to overcome the competitive challenge. Also, they started to give job opportunities for employers to overcome the disparity of income. Also, in-stock these are some practical options we can get such as provide better education, training, and apprenticeship so it will help people to adapt to the pressures of the globalization effectively, governments can stable their policies and coordinate better and deepening regional economic integration. Study more…
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