Forces of Globalization and Impact to Stakeholder

2681 words 11 pages

Globalization can be defined as the process of social, political, economic, cultural and technological integration among countries around the world. However, globalization is frequently confused with internationalization. Internationalization increases the importance of international trade, international relations, treaties and alliance between nations (Herman E Daly, 1999). Internationalization works by penetrating another country and adapting to the market independently and collaborating with the local government (Kanter, 1995). Adam Smith and David Richardo explained that in internationalization, the factor of production such as capital and labour are typically less mobile
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Company can save more by outsource for lower wages country and avoid tax. Company also prefer to outsource because they want to reduce the complicated process of production. They also prefer off shoring for strategic reason especially for growth strategy. By off shoring, company can penetrate into new market and expanding current business. They can hire more skilful people in that country with fewer labour rights and regulations.
For example, Nike Company used to make their shoes with Nike employees in the US. But today, they did not make a single shoe because they offshore and outsource the production of the shoes for another company in other country to cater the world market. Another example is Automaker Company that outsources their parts to other company so they have no hassle to produce specific parts.
Migration is the movement of people on the area to other places. Since globalization is associated with free migrations of goods and people, the decision to migrate depends on the individuals to improve their economic and social conditions. In 21st century individuals from developing countries tends to migrate to other countries to obtain sufficient income for survival. This income then will be sent to their families at their home countries. This situation becomes an economic staple to developing country in mostly Asia and South America. For some skilful labour and professional, they tend to migrate for better


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