IS GLOBALIZATION A BENEFIT OR A DANGER?

Introduction

Globalization has a great impact on individual customers, business managers, entire businesses, and the countries involved in international trade. It affects many different stakeholders, both in the home country and the host country, in many different ways. The home country is where a multinational company first sets up its operations and is incorporated. For example, China is the home country for Huawei, and the US is the home country for Apple. The host country is the foreign country where a multinational company sets up its operations as it grows internationally.

Globalization's Possibilities

• New Markets: Expanding into new markets may increase sales revenue.
• Cheaper Labor: Hiring cheaper workers in underdeveloped and developing countries will enable the company to lower the cost of production, which will result in higher gross profits.
• More Choices: Globalization leads to increased competition for both local and international businesses. Offering more choices to customers will increase their satisfaction, which will result in higher customer loyalty and repeated purchases.
• Higher Efficiency: Because of strong international competition, businesses will have to start operating more efficiently. Reductions in waste will result in lower costs, leading to greater profits.
• Lower Prices: Thanks to operating on a larger scale, the company can achieve a reduction in costs due to economies of scale. Higher price competitiveness may enable the business to lower the prices of goods and services, therefore encouraging sales.
• Multiculturalism: Globalization leads to multiculturalism, which promotes mutual understanding between people from different countries. Therefore, as a result, we will end up in a more peaceful world.
• Increased Investment: Increased investment by overseas businesses investing in the home country will speed up economic growth. Therefore, the result will be lower unemployment among citizens and better living standards.

Threats of globalization

• Higher unemployment: When domestic companies decide to relocate their operations to another country where labor is much cheaper, local employees in the home country will start losing their jobs. Therefore, it will result in increased unemployment, which will lead to lower standards of living.
• Increased competition: Local businesses in the domestic country may struggle as powerful foreign companies start to sell products at a cheaper price to enter the market and gain market share. Some of them may even go out of business, especially start-up businesses.
• Environmental damage is caused by increased demand for goods and services, which leads to pollution-generating industrialization.
• Destruction of local cultures: Globalization forces customers to conform to a standard culture where standardized products and services are offered. Therefore, this may lead to a loss of individual characteristics in domestic countries.
• Higher expenses: The marketing, distribution, and legal costs for international businesses will increase. International businesses operating on a very large scale need to conform to the laws and regulations of each country. economic growth. Therefore, the result will be lower unemployment among citizens and better living standards.
• If supplies are purchased during unfavorable times, exchange rate fluctuations may cause changes in the price of raw materials, lowering gross profits.

Conclusion

Globalization has increased product, idea, and technology trade and created a world without borders, but it has also had some negative consequences for developing countries. Flowing with globalization, India is shining in nearly every sector. India is getting global recognition and is slowly moving towards becoming a major economic and political power. Globalization cannot be ignored, as this is the need of the hour.