Negative Effects

Here we discuss the positive and negative effect of globalization
NEGATIVE EFFECTS
Globalization also have its side effects to the developed nations. These include some factors which are
jobs insecurity, fluctuation in prices, terrorism, fluctuation in currency, capital flows and so on.
The first one is
JOBS INSECURITY.
In developed countries people have jobs insecurity. People are losing their jobs. Developed nations have
outsourced manufacturing and white collar jobs. That means less jobs for their people. This is because
the manufacturing work is outsourced to countries where the costs of manufacturing goods and wages
are lower than in their countries. They have outsourced to developing countries like China and India.
Most people like accountants, programmers, editors and scientists have lost jobs due to outsourcing to
cheaper locations like India.
Globalization has led to exploitation of labor.
FLUCTUATION IN PRICES.
Globalization has led to fluctuation in price. Due to increase in competition, developed countries are
forced to lower down their prices for their products, this is because other countries like China produce
goods at a lower cost that makes goods to be cheaper than the ones produced in developed countries.
So, in order for the developed countries to maintain their customers they are forced to reduce prices of
their goods. This is a disadvantage to them because it reduces the ability to sustain social welfare in
their countries.
Now I discuss the positive effect of globalization
Postive effect of globalization :
It would be rather difficult to discuss the extent of the positives that globalization has had on the world
at large. But still, here are some of the positive effects of globalization
Foreign trade
Globalization has created and expanded foreign trade in the world. Things that were only found in
developed countries can now be found in other countries across the world. People can now get
whatever they want and from any country. Through this developed countries can export their goods to
other countries.
Foreign investment
One of the most visible positive effects of globalization is the flow of foreign capital. F0R EXAMPLE A
lot of companies have directly invested in India, by starting production units in India, but what we also
need to see is the amount of Foreign Investment Inflow that flows into the developing countries. Indian
companies which have been performing well, both in India and off the shores, will attract a lot of foreign
investment, and thus pushes up the reserve of foreign exchange available in India. This is also one of the
positive effects of globalization in US and other developed countries as developing countries give them a
good investment proposition.
Competition
One of the most visible positive effects of globalization is the improved quality of products due to globe
competition. Customer service and the ‘customer is the king’ approaches to production have led to
improved quality of products and services. As the domestic companies have to fight out foreign
competition, they are compelled to raise their standards and customer satisfaction levels in order to
survive in the market
Culture
The world that we live in today is a result of several cultures coming together. People of on e culture, if
receptive, tend to see the flaws in their culture and pick up the culture which is more correct or in tune
with the times. Societies have become larger as they have welcomed people of other civilizations and
backgrounds and created a whole new culture of their own. Cooking styles, languages and customs have
spread all due to globalization. The same can be said about movies, musical styles and other art forms.
They too have moved from one country to another, leaving an impression on a culture which has
adopted them.
Global market.
Most successful emerging markets in developed countries are a result of privatization of state owned
industries. In order for these industries to I ncrease consumer demand many of them are attempting
to expand and extend their value chain to an international level. The impact of globalization on business
management is seen by the sudden increase of number of transactions across the borders. In protecting
yields and maintaining competitiveness, businesses are continuing to develop a wide range of their
footprint as it lowers cost and enjoys economies of scale (S hah A.,2009)

Negative Effects

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Negative Effects

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Here we discuss the positive and negative effect of globalization

The first one is

Globalization has led to exploitation of labor.

Now I discuss the positive effect of globalization

Postive effect of globalization :

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