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Management and Organisations in a Global Environment

Holmes Institute

Table of Contents

Management Summary. 3

Introduction. 4

Analysis. 6

Pankaj Ghemawat ideas on Globalisation, World 3.0. 6

Anthony Giddens’ ideas on globalisation. 9

The “End of Poverty” movement and “Trade NOT aid” as a  measure for more globalised world. 12

Conclusion. 15

References. 16

Management Summary

This report focuses on the concept of globalisation and how it is affecting the economies worldwide. Globalisation can be defined as the Globalisation can be defined as the process of amalgamation of culture, economies, market, industries, and policy-making around the globe. It helps in economies to grow. The economic activities along with culture is shared among economies. This helps in improving the living standard of people, and in reducing the poverty.

Globalization is not a new procedure which has started recently. Globalisation began and quickened quickly after World War II, and it is affecting many individuals, the earth, societies, national governments, financial improvement and human prosperity in nations around the globe. Lately, the term globalisation has started being used more frequently. It is been linked with the concepts like trading, export, import, foreign investment, tourism, communication etc.

There are many contrasting theories about Globalisation. According to economist and professor, Pankaj Ghemawat, Globalization is a catchall term which can be used to define the much of modern financial and societal developments, by the happening of outsourcing with the attractiveness of fusion. According to Pankaj Ghemawat, some data shows that the world is not as interconnected as it seems to be to the people. People overhype the level of globalisation in the world. Whereas the actual facts and numbers shows that we are not so interconnected as seems to be.  According to him, the world is semi globalised. There is need for further integration. The companies look for global market when their local market gets saturated. They should strategise their international strategy not only by seeing the similarities among countries but they should also give importance to social, cultural, political and geographic differences so as to succed in the new country. This can be done with the help of CAGE model. Assignment Help for HI6005 MOG Assignment for Holmes College in Australia.

The views of socialist Giddens, is very different from Ghemawat. According to him, there are many social, political and economic change in the world. He has explained this phenomenon which explains the changes in the environment as globalisation which is just a restructuring of various organisation, civilisation, structure of governance, politics etc. The globalization can be defined as the strengthening of the global social relation which links the distant localities in a way that the happening the local environment is affected and shaped by the events which have occurred thousands of miles away from the place According to him, each of the attempt to  classify the process of globalization, leads to further simplification and reduction in complexity of globalization. Gidden has defined four major dimensions of globalization as capitalist economy, the country state framework, world military order an industrialisation. One of the most essential impacts of industrialism has been the changes in the technologies of communication around the globe

There have been attempts around the globe to reduce global poverty. There has been significant decrease in poverty in last 2 decade, where extreme poverty has been decreased from 40% to 20% but it is observed that these attempts were not sufficient to reduce teh poverty. World bank has promoted investment in developing countries (since they contribute to almost 60% of world poverty) to reduce poverty in these countries and it also gives higher yield to the investment of the companies/countries as the rate of return in emerging economies is much higher than the developed countries. Another concept which is interlinked with remove the poverty movement is trade not aid concept. It emphases on the fact that the developed countries should support trade from developing countries so that the developing countries can earn revenue which will help in reducing the poverty. Both these concepts focus on investment in developing country and they promote global trade and hence they are helpful in globalisation.

Introduction

Globalisation can be defined as the process of amalgamation of culture, economies, market, industries, and policy-making around the globe (Anderson,  Cavanagh,  and Lee, 2005).

Globalisation can be described a progression by which regional, and national economies, cultures and societies can be integrated by means of a global association of trade, transportation, communication, and immigration (Bhagwati, (2004). Globalisation can be considered as a continuous process which helps in linking people, cities, neighbourhoods, regions and countries in a closer way then these things, people were before (Hicks,and Holden, 2007). It has caused the lives of people to be more influenced by people of all parts of the globe in various ways like the way people eat, the way people speak, the clothes which they wear, the choice of music, the ideas, information which people get etc. Buy Holmes College assignment help in Australia with Punjab Assignment Help.

This interconnectedness among people on the earth is some of the time additionally alluded to as the ‘worldwide town’ or a global village where the obstructions of national and global limits turn out to be less important and the world, allegorically becomes a littler place (Held, 1999) . The procedure is driven monetarily by global money related transactions and exchange, innovatively by data innovation and broad communications diversion, and fundamentally, additionally by human means, for example, social trades, migration, movement and universal tourism. As one reporter commented, we now live in a networked, interconnected world.

Globalization is not a new procedure which has started recently. Globalaisation began and quickened quickly after World War II, and it is affecting many individuals, the earth, societies, national governments, financial improvement and human prosperity in nations around the globe (glitz, 2002). A considerable lot of these effects are valuable, however Jimmy Carter, a previous Leader of the USA, has called attention to that many individuals are losing up a major opportunity for these advantages.

Lately, the term globalization was frequently essentially centred around the financial side of the world, for example, exchange, foreign direct investment and flow of capital worldwide, but now the term has been extended to incorporate a more extensive scope of zones and activities, for example, culture, media, innovation, Cultural-social, political, and even natural variables, e.g. environmental change (Reich, 2007).

After the fall of the Berlin Wall, some talked about the rise of a “one world route” of doing business and living, but more recent events have suggested that those thoughts were misplaced as we see the success of a number of varying economic and national system (Steger,2009).

These issues make the advancement of comprehension of globalization, its different incorporated structures, its driving forces and its effects very important. Such a comprehension can furnish youngsters with basic insights into the social, social and political effects of the globalizing effects of monetary reconciliation and technological advancements and additionally furnish them with abilities to evaluate the expenses and advantages in their lives a groups and those of individuals in different parts of the world.

Analysis

Pankaj Ghemawat ideas on Globalisation, World 3.0

According to the economist, Pankaj Ghemawat, Globalization is a catchall term which can be used to define the much of modern financial and societal developments, by the happening of outsourcing with the attractiveness of fusion. According to professor and economist, Pankaj Ghemawat, some data shows that the world is not as interconnected as it seems to be to the people.

He has made a comparison of the number of foreign facebook friend or say a twitter follower an individual have outside his or her country. The percentage pointed by Pankaj Ghemawat was very less, it was even lesser than what people expected.

He has explained in his book, World 3.0, that the world is semi globalised. It is not as global as people think it is. According to him, the world currently is short of full integration. There are many new, interesting and happening things which are occurring across the globe. From the time of Karl Marx and communist Manifesto, people have been thinking that the world is becoming globalised. But the cross border component of things which are happening as a percentage of domestic movement and similar things are very small percentage of total. In facebook, the chance of an American randomly becoming the friend of another national is very low, as low as 20-25%. The cross border flow of the same is 16%. Similarly if we analyse the other cross border flow, the percentage is even lower than the numbers shown in facebook. Only 2% of voice calling minutes is utilized by Americans for international calls. Ghemawat also analysed the non information flow across borders. The export in USA is around 30% of GDP. Many of these export are counted twice or thrice for example, an iPod or an iPhone component which is first shipped from japan to China and then shipped to USA. Such items are being counted twice. Similarly, this issue can occur in many other commodities which exaggerates the export figures. World Trade Organisation is working to  guess the current number of trade/exports. Simlilarly, if one observe the students of the university, as low as only 2% of the individuals are there who are studying at a country which different from their resident country of which they are citizens of.

 On the basis of such similar data, Ghemawat have commented that the Word is not yet fully globalised, it is till semi globalised. This semi implies that the world is partially globalised. Ghemavat has advocated that the complete liberalization will help in globalization. Complete globalization of trade will help in getting a return of 0.5% as compared with otherwise return of0.1%. Value can be more effectively created by reshuffling resources across countries and potential volume gain across nation by means of absolute cost differences.

Customarily excluded components can help in increasing the profit from liberalization from 2% to 3%. Service liberalization can further increase it to around 4% to 5% which can further be increased by the flow of other services , capital, flow of  people, products and flow of people.

Big profit can be generated by the flow of people. There was a research conducted by few individuals of Stanford, which suggested that the world’s GDP can be doubled by means of liberalization of immigration. There are other studies also which suggested that the global GPD will be increase as a result of liberalization of immigrant.

There are few non-economic estimates associated with it as well. There is a belief that globalization increases with increase in openness on political front. If the fact that the world is only globalised around 10 to 20% is recognized then non homogenized implication of mixing can be generated. At the margin where two oceans are lapping, we can observe some new phenomenon like complementarities.

The immigrants are a means to increase the trade between the country where they have moved to and  the country from where they belong to. Globalization can grow 10% higher every year as compared with the previous year and at the same time, economies may have grown faster  which also needs to  be considered.

Globalisation is about multiple parallel efforts and diversity, not single-track uniformity. In a completely integrated market, things will be same every where is is not the case currently.

There are two reasons to avoid to a phenomenon ‘Globaloney’. The first one being the potential of large  gain to increased integration and other one being that the strategy one size fits all is not suitable at business level and there can be managerial biases (Veseth, 2005).

Most of the companies goes global when the opportunities in local market is saturated. For instance, Walmart has expanded in multiple market thinking they are the best retailer in the world. This is the biggest mistake which can be committed by international businessmen.  With everyone revolving around the concept of flat world, they should also remember the differences among different economies.

Ghemawat explained that the cage model can be used in understanding the people and economies in global environment.  CAGE analyses the differences in businesses which helps in strategizing. Usually researchers focus of any one of the concepts like cultural factor, geographic factor, political factors etc. The CAGE framework integrate it all and identifies the Geographic, Cultural, Economic and Administrative differences amongst countries and it tries to identify the focus area where companies should focus while going international and hence help in formulating internationalization strategies.

The regulation and integration should coexist instead of having gobalisation and integration in one hand and protectionism and regulation in the other hand. People believe that the integration is so much more than what it actually is. People consider the level of globalization by their own experiences rather than by actual facts. Ghemawat suggests that the world is becoming largely integrated but there still exist significant barriers which should be considered. Businesses should give importance to the law of distance. The success of business to a large extent depends on understanding the importance of borders. Companies should initially expand in the economies where they can relate to their own culture and political value. Regional integration is the future of business. Businesses should not only identify and acknowledge differences but also should bring in strategies to deal with those differences (Ghemawat, 2011).

 Anthony Giddens’ ideas on globalisation.

According to Giddens, we are living in a world of social political and economic change. The phenomenon which explains the changes in the environment can be termed as globalisation which is just a restructuring of various organisation, civilisation, structure of governance, politics etc. The globalization can be defined as the strengthening of the global social relation which links the distant localities in a way that the happening the local environment is affected and shaped by the events which have occurred thousands of miles away from the place (Giddens, 1991). Vice versa is also true. Each of the attempt to  classify the process of globalization, leads to further simplification and reduction in complexity of globalization. Gidden has defined four major dimensions of globalization.

The most evident dimension of the globalisation is the world capitalist economy. “The fundamental focuses of power on the world economy are capitalist states – states in which capitalist monetary endeavor is the main type of production. The local and global financial approaches of these states include many types of control of monetary action, however their institutional association keeps up a “insulation” of the financial from the political. This permits wide extension for the worldwide activities of business organizations, which mostly include a home base inside a specific state yet may create numerous other local associations somewhere else. The greatest transnational organizations today have spending plans/ budget bigger than those of few countries. In any case, there are some key regards in which their power could not equate the power of states – particularly imperative here are the elements of territoriality and control of the methods for violence. It can be said that If country states are the main “actor” inside the worldwide political order, companies are the prevailing actors inside the world economy” (Giddens 1991). The impact of a specific state inside the worldwide political request is unequivocally molded by its level of monetary influence (and the association amongst this and military quality).

The country state framework, which is the second dimension of globalization, has since quite a while ago took part in the reflexivity characteristics for innovation all in all. “The very presence of sovereignty ought to be comprehended as something that is reflexively observed. Sovereignity is connected to the substitution of “Frontiers” by “borders” in the early improvement of the country state framework: self-governance inside the domain guaranteed by the state is endorsed by the acknowledgment of borders by different states.” (Giddens 1991)

The third dimension is the world military order. Because of the enormous damaging energy of present day weaponry, all states have military power which is far in overabundance of that of even the biggest of pre-modern civilisations. Many economist have claimed that teh third world countries are more effective in managing military. At the time of cold war, the two most powerful militarily states, the United States of Americaand the Soviet Union, formulated a bipolar arrangement of military unions of really global extension. The nations engaged with these unions fundamentally acknowledge the limitations associated with it over their opportunities to produce autonomous military procedures remotely. (Giddens 1991)

The fourth dimension of globalization consist of the industrial development. It can be explained by means of the extension of the worldwide (global) division of work, labour which incorporates the differentiation amongst increasingly and less industrialized territories around the globe. Modern day industry is characteristically in view of division of work, on the level of occupation and job task undertakings as well as on that of local/regional specialization regarding kind of industry, skills required, and the generation of raw materials. There has, without a doubt, occurred a noteworthy development of global interdependence the distribution of work after the Second World War. One of the fundamental characteristics of the globalizing ramifications of industrialism is the overall dissemination of technologies and advancements. The effect of industrialism is doubtlessly not constrained to the area of production, but rather influences numerous parts of everyday life, and additionally affecting the non specific character of human interaction with the material condition. Yet industrialism has likewise conclusively adapted our exceptionally feeling of living in “one world”. For one of the most essential impacts of industrialism have been the changes in the technologies of communication around the globe (Giddens, 1991).

A further and genuinely crucial part of globalization, which lies behind each of the different institutional dimensions that have been specified, may be defined to as social globalization. Including a fifth measurement of globalization, which is culture, gives us the below picture of five primary globalization issues (Tejada , 2008):

The major driving force of globalization is the information revolution. It is basically the way the means of communication is changing. It has changed the way of everyday life of individuals and have also led to  restructuring of many organization. The result of this communication revolution may be complex with many contradictory figures but, one can make the concet of globalization simpler with the help of three fold image.

Globalization can remove the control of national government in the areas like trade policy and economic policies. Globalisation helps in creating new political economical and cultural boundaries.

Economies in modern world should not be over excited with the positive outcome of globalization. It is continuous effort which can result in positive effects of globalization.

The sociological analysis of Giddens’ on the process of globalization not only consist of favorable conditions like world economy, advancement of telecommunication technology, but it also consist of political transformation, cultural growth and transnational growth of companies. Gliddens has focused on both positive an d negative outcome of globalization and suggested that one should learn from the mistakes of the past and grow in a way that the whole world is benefitted by the growth of new technologies.

The “End of Poverty” movement and “Trade NOT aid” as a  measure for more globalised world

The poverty of the world have been reduced from 40% to 20% along with the reduction of extremely poor people whose earning is less than $ 1.25 per day in last two decades (World bank, 2014). During this period, greater than 700 million people have surpassed the threshold level of income for poverty. According to the World bank group president, Jim Yong Kim, the world is in the right track for the eradication of poverty but there is a need to do more to achieve the same. The poverty is  reducing but the rate of reduction should be improved. The income disparity has been widened in many emerging economy in recent years. World bank has come up with two new goals and they are:

  • Eradication of extreme poverty by the year 2030
  • Increase the prosperity of the countries by increasing the income growth of the 40% poorest in all the country.

The two main group which can help in achieving these goals are teh social society and teh private sector.

To eradicate the poverty by the year 2030, private sector has to play a very important role. In the last two decades, millions of jobs has been created by private sector which has helped in reduction of poverty. 90% of these jobs come from private sector organisation which drives the momentum for poverty reduction. There has been an emerging demand for improved infrastructure and infrastructure investment which can be met by private sector only. There has been a total  foreign assistance of $125 billion in a year which is a decent amount but is not good enough to meet the targets. For instance, there is a gap of $ 1 trillion in Indian infrastructure finance which cannot be met by the foreign assistance provided to it (World Bank, 2014).

It implies that the developed nation and cash rich countries, companies should invest on new private investment in developing economies. The potential  for growth is huge in developing countries. If billions or trillions of money is invested in United states, the return would be much lower than what one have achieved by investing it in a developing economy. This concepts promote the eradication of poverty along with globalization.

The World Bank Group is engaged in helping governments to develop their business climates so as to attract increased levels of private investment from around the globe. The world bank has invested $ 20.4billion money in developing countries in 2013 resulting in the creation of more than 2.5million jobs. The return on these investments of World bank has been very high. In the last 15 years, the average returns of World bank on investment in developing countries IFC’s equity investments has been more than 20 %.  World bank promotes private sector organizations to invest their money in developing countries (UNESCO, 2017)..

For formulating a movement to end the global poverty, the component of civil society is of utmost important Civil society plays a very important role in the process of delivering the services to the poor and in making movements. For end of poverty movement, it is important to build a civil society. Civil society helps in delivering high quality of service to poor and in building movements.

The poverty state has been changed drastically from 2005 to 2015. This change is motivated by high level of sustained economic growth which was recorded in the developing world. This has helped to achieve United Nation Millennium Development Goal of reducing poverty to some extent. The economies of developing countries have grown by more than 50% in rael  terms even after the great recession. There have been growths in the countries with large number of poor people. Countries like China, India, Bangladesh, Uganda, Tanzania, Vietnam, Uzbekistan, Ethiopia and Mozambique have been together home for more than two-third of the poor population of the world in the year 2005. The report suggests that more than 300 million people will surpass the threshold for poverty in another four years.

The trade-not-aid strategy is formulated on the concept that the free trade with rich countries can help developing countries to generate more reliable income and then they will be less dependent on the external aids provided to them for development projects. International trade can help in raising the income level and the standard of living as poor/ developing countries will be able  to export their goods and services which will lead to the path of economic development by means of trading and sales of goods to the developed country  who are interested in buying their product. In this way, the trade not aid theory will help in aligning the poverty reduction theory with itself as both of these theories focus on the significance of increasing the  export opportunities in these countries to increase the development and income.

Unfortunately, the rich countries have high cost on goods which the developing countries exports like clothes than the manufactured goods which these countries produce themselves. This implies that for selling the goods in developed county, the developing country has to pay higher taxes which results in increase in prices of these goods when they go to the market.  Developed countries also engage in the practice of subsidizing their own industries in order to keep prices of locally manufactured goods at lower level, hence keeping the competition from developing countries out.

For instance, Middle Eastern nations confront normal apparel tariff of 15 percent on the $4.2 billion worth of merchandise they export to the USA every year (Reuters, 2009; United States Trade Representative,2009). Whereas, France experiences duties of just two percent on produced products, which represent $34 billion in yearly export to the United states of America (Reuters, 2009; Central Intelligence Agency). As Progressive Public Policy Institute,, even though Middle Eastern nations send out less stock to the United States than France, they pay the same amount of money in the form of taxes This is on account of the United States charges higher duties on garments than on fabricated merchandise, making an impediment for emerging nations, where apparel is frequently an essential export industry (Reuters, 2009).

Conclusion

In this study, we have observed various contrasting views about globalisation. Globalisation is not a new concept which has started recently, but it has emerged after world war 2.  Globalisation can be considered as a continuous process which helps in linking people, cities, neighbourhoods, regions and countries in a closer way then these things, people were before. It has caused the lives of people to be more influenced by people of all parts of the globe in various ways like the way people eat, the way people speak, the clothes which they wear, the choice of music, the ideas, information which people get etc.

We have studied various contrasting views about globalisation in this research. According to Economist Pankaj Ghemawat, Globalisation is a overhyped world and we have not achieved that level of globalisation which people say. Many a times, same trade gets counted twice or thrice increasing the total volume which is not true. The companies should focus on integration. Currently, the world is semi global and the globalisation can be achieved by means of integration  and by giving importance to the difference in social, administrative, cultural and economic factors of the economies. While , Giddens identifies 4 dimensions of globalisation which helps in integrating and further growth of the economies. World bank promotes the poverty reduction movement which can in turn promote globalisation as for poverty reduction, investment in developing economies has to be made. Similarly, the trade not aid model also focuses on investment in developing countries to make them able and to increase their earning. Hence, with the help of these contrasting studies, we have analysed the concept of globalisation, its impact on society, economies and the measures to overcome the hurdle in the process of globalisation.

References

UNESCO, 2017, Globalisation, Teaching and Learning for Sustainable Future

Ghemawat P, 2011, World 3.0: Global Prosperity and How to Achieve It

Giddens, A (1991): The Consequences of Modernity. Polity Press. Cambridge. (70-78)

Tejada G, 2008, The four dimensions of globalisation according to Anthony Giddens

World bank, 2014, Building a Movement to end Poverty

Reuters, 2009; United States Trade Representative

Anderson, S., Cavanagh, J. and Lee, T. (2005) Field Guide to the Global Economy, 2nd edition, Institute for Policy Studies, Washington DC.

Bardhan, P. (2005) Globalization, Inequality and Poverty: An Overview, University of California, Berkeley.

Bhagwati, J. (2004) In Defense of Globalization, Oxford University Press, New York.

Held, D. et al.(1999) Global transformations: politics, economics and culture, Stanford University Press, Stanford CA.

Hicks, D. and Holden, C. (eds) (2007) Teaching the Global Dimension: Key Principles and Effective Practice, Routledge, London.

Reich, R. (2007) Supercapitalism: The Transformation of Business, Democracy, and Everyday Life, Vintage Books, New York.

Richardson, R. (2004) Here, There and Everywhere: Belonging, Identity and Equality in Schools, Trentham Books, Stoke-on-Trent.

Steger, M. (2008) Globalisation: A Very Short Introduction, Oxford University Press, Oxford.

Steger, M. (2009) Globalisation: The Great Ideological Struggle of the twenty-first Century, Rowman and Littlefield, Lanham MD.

Stiglitz, J. (2002) Globalisation and Its Discontents, Norton & Company Inc., New York.

Stiglitz, J. (2006) Making Globalization Work, Norton and Company, Inc., New York.

Veseth, M. (2005) Globaloney: Unraveling the Myths of Globalisation, Rowman and Littlefield, Lanham MD.

Wolk, M. (2004) Why Globalisation Works, Yale University Press.

World Commission on the Social Dimension of Globalisation (2004) A Fair Globalisation: Creating Opportunities for All, International Labour Organisation, Geneva.

 

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