THE PROS AND CONS OF GLOBALIZATION

1. 2.

Where do you stand? Key themes to consider

a.
b. c.

Impact on Labor
Impact on Equality Impact on Government

d.
e.

Impact on the Environment

Impact on Culture and Community

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

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

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

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

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

Globalization: Pros and Cons

Globalization as moral conflict Impacts of Globalization

Implications of the debate
For academics

Increases economic interdependence Creates winners and losers

For companies

Need for more objective research Need to question assumptions and be open to alternatives Be aware of multiple stakeholder interests Follow the guidelines of the UN Global Compact Consider the triple bottom line

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