Effects of Globalization: Culture, Economy, and Market Entry

Introduction to Globalization

Globalization is the global alliance in matters of trade, economy, and culture. In the literal sense, globalization is the transformation of a regional phenomenon into a global one. It can also be described as the process by which people around the world become unified to form a single society that functions together. Globalization heavily depends on worldwide expansion and integration. Due to advancements in technology, the world has effectively shrunk into a village, as globalization has swept away boundaries in politics. Globalization in general is a combination of technological, economic, socio-cultural, and political forces. This paper analyzes the effects of globalization while comparing cultural differences in the Middle East, Europe, and America, and also presents a SWOT analysis on how to develop a country market entry strategy.

Globalization has many definitions. According to Palmer (2003), globalization is "the diminution or elimination of state-enforced restrictions on exchanges across borders and the increasingly integrated and complex global system of production and exchange that has emerged as a result."

Effects of Globalization on Economy and Society

Globalization affects the world in several ways, including its impact on industry, competition, and information. Globalization has brought insecurity and ever-changing working conditions rather than steady, higher-income jobs. Outsourcing is one of the factors that has made job security a thing of the distant past. The effects of globalization are manifold; it affects various aspects of the world economy, bringing about overall financial change (Rugman, 2003).

The impacts of globalization exert an intense influence on the financial conditions and industrial sectors of nations. Globalization gave rise to markets based on industrial production all over the world. This in turn widens access to a diverse variety of foreign commodities for consumers, owing to the marketing strategies adopted by multinational corporations. In today's global economic arena, globalization has facilitated the formation of common worldwide markets based on the liberal exchange of both currency and goods. As far as political globalization is concerned, it has helped form a world government framework to normalize interactions between countries. It has also encouraged the emergence of economic and social globalization (Rugman, 2003).

Globalization has caused job erosion in almost every country and has fueled unemployment. In many cases, employers threaten to move jobs abroad to cut costs, leaving employees afraid of layoffs and pay cuts. White-collar jobs have become particularly vulnerable to this risk. This scenario frequently causes emotional unrest and disorientation among affected individuals (Rugman, 2003).

Globalization has brought about the borrowing of culture among different states. This can be both an advantage and a disadvantage. It is an advantage in that it allows people from one state to learn about the cultures of others, enhancing bonds between nations and encouraging mutual appreciation and respect. It is a disadvantage in that some people may fully adopt another culture at the expense of their own. This may lead to the fading away of a particular culture when its people have embraced a different one and abandoned their original traditions. This situation should be avoided so that people do not lose their original roots (Rugman, 2003).

Globalization also appears responsible for the ever-rising gap between an impoverished majority and an affluent few. This growing resentment does not bode well for society. Globalization tends to make large multinationals and corporations powerful enough to interfere with national policymaking, jeopardizing the interests of ordinary citizens. Globalization has also contributed to ecological risks alongside rising global inequalities (Rugman, 2003).

Globalization has thrown out varied challenges: inequality among different nations has grown, volatility in financial markets has intensified, and environmental conditions have worsened. Many third-world countries remained on the margins until the early 1990s, when globalization processes were still guarded by trade and financial barriers. The economic integration brought about by globalization enabled a freer flow of information, technologies, and people. This integration brought with it new cultural, political, and socio-economic dimensions (Rugman, 2003).

Globalization worldwide has created enormous trade imbalances that are proving unsustainable. Most countries have globalized labor and capital, but have not equally globalized consumption. Workers in low-wage countries who benefit from globalization often do not earn enough to purchase the kinds of products they produce. As a result, consumers in developed countries such as the United States are expected to drive the factories of lower-wage nations like China (Rugman, 2003).

Globalization has also contributed to world economies in positive ways. Advances in science and technology allow most businesses to cross territorial boundaries with ease. Many companies have become highly productive and competitive, raising the quality of products and the living standards of people worldwide. Additionally, companies from developed countries have established foreign operations to take advantage of lower labor costs in poorer countries, providing an influx of investment funds to less-developed nations (Rugman, 2003).

Cultural and Religious Differences: Middle East, Europe, and America

Globalization has also led to the introduction of education in states that were previously remote and lacked access to it. This is a significant benefit, as knowledge is being extended to large populations in order to combat illiteracy, which remains a major problem in developing countries. The introduction of education is also being embraced by most states in the Middle East, as they have come to recognize the importance of educating their children, though a small number still oppose the idea — particularly the education of girls.

Globalization has impacted regions both positively and negatively. Middle Eastern states have displayed varied attitudes toward different forms of globalization. Unlike Latin America or East Asia, many Islamic nations in the Middle East do not support globalization, perceiving it as a threat to their culture. According to scholar Rubin, unless the Islamic world finds something genuinely valuable in the globalization debate, continued resistance will not cease (Moncada-Paterno-Castello, Vivarelli, & Voigt, 2011).

Globalization has, however, played an important role in bringing together Muslims who had previously segregated themselves. When studied carefully, Middle Eastern participation in globalization activities is seen to be more active than it might first appear. To view globalization as mere westernization, as some Islamic scholars once argued, is to overlook tremendous developments such as infrastructure improvements and technological adoption, which have played a major role in easing tensions such as the Palestinian-Israeli conflict and bringing parties to the table to discuss regional issues. Globalization has also created a broader understanding of what Islam is and what it means to be a Muslim in the Middle East (Moncada-Paterno-Castello, Vivarelli, & Voigt, 2011).

For any state to grow economically, it must be ready to embrace new innovations that come as a result of globalization and adjust to the changes they bring. Some Middle Eastern states should become more open to globalization and use it to their economic advantage. The rift between the West and the Islamic world is partly due to a lack of proper communication. Muslims who are resistant to globalization view it as overly westernized, and so they are finding their own ways to engage globally — for instance, by allowing the use of the internet among their followers to connect with others who share the same understanding of Islam.

Many Middle Eastern states remain firmly opposed to incorporating globalization into their culture. They are resistant to certain aspects of globalization and strongly adhere to their traditions, unwilling to change with the trends of the modern world. The anti-globalization sentiment is widespread across much of the region, and there is an enormous fear of embracing it. However, the Gulf States represent a notable exception: they have chosen to embrace globalization and, as a result, have improved their economies significantly. They have leveraged the positive aspects of globalization and associated themselves with the West, which has been of great benefit to their economic growth (Moncada-Paterno-Castello, Vivarelli, & Voigt, 2011).

Being rated among the least globalized regions, Middle Eastern nations need to work harder to improve their economies and narrow the gap relative to other parts of the world. The Middle East has generally been unwilling to adopt American foreign policy, even though the two regions have maintained close ties. American globalization policy during the Bush administration had a fluctuating impact on the Middle East.

For America and Europe, the situation is quite different from that of the Middle East. They are more receptive to globalization since it aligns more closely with their own western culture. Globalization is often seen as synonymous with westernization or modernization. America, compared to the Middle East and Europe, can be seen as the most enthusiastic proponent of globalization. However, Americans were not insulated from globalization's impacts. During the Bush administration, globalization was embraced as a tool to counteract terrorism both domestically and globally, serving as a kind of strategic defense mechanism (Moncada-Paterno-Castello, Vivarelli, & Voigt, 2011).

Globalization has helped improve civic society in America by integrating citizens, building unity, and fostering cooperation that yields high-quality outcomes. It also establishes peace among states and enables interaction among people of different nations, creating links that facilitate resource sharing and trade, ultimately raising America's economic standing.

Americans have shown relatively little resistance to the influence of other cultures. According to a Pew poll from 2000, a large percentage of Americans attributed the diversity of culture to their country's success. This illustrates that when a state embraces globalization and uses it strategically, it stands a strong chance of improving its economy.

Conclusion

Globalization is very inevitable; therefore, every individual, company, and government should be urged to adopt a balanced approach in order to take appropriate steps in dealing with matters related to financial and economic gains. In all three regions — the Middle East, Europe, and America — globalization is not received with entirely open arms, as it leads to unemployment among skilled and unskilled workers alike, lower incomes, and retrenchment. This in turn increases the level of poverty. Due to lack of employment, people sometimes engage in corruption to secure work, posing a serious threat to the economic stability of any state.