Global Business Environment

Assignment: 5

Name: Preeti

Student id: 500231508

Following are the drawbacks of globalization:

1. Employment Displacement: Globalization often involves moving jobs from higher-

paying countries to those with lower wages. This shift can lead to job loss and insecurity in
developed nations.

 For instance, manufacturing jobs once plentiful in the United States have moved to
countries like China, where labour costs are lower.

 Similarly, call centre jobs that were previously handled domestically are now
outsourced to countries offering cheaper labour, impacting local employment
opportunities.

2. Cultural Uniformity: As global culture spreads, local traditions and customs can be
overshadowed, leading to a loss of cultural diversity.

 For example, the widespread presence of fast-food chains like McDonald's worldwide
has impacted local cuisines, making them less distinct.

 Moreover, the dominance of English as the primary language for business and
communication globally can diminish the use of indigenous languages.

3. Negative Environmental Impacts: Increased global trade and production contribute to

environmental degradation, including deforestation, pollution, and resource depletion.

 For instance, the expansion of palm oil plantations in Southeast Asia has led to
deforestation and habitat loss.

 Additionally, shipping goods across continents generates significant carbon emissions,

contributing to climate change.

4. Weakened Independence: Participation in global trade agreements may require nations to

compromise their autonomy in policymaking. International organizations and treaties can
influence domestic decisions.

 For example, compliance with World Trade Organization (WTO) rules may
necessitate changes to national regulations or trade practices.

 Similarly, bilateral trade agreements can limit a country's ability to protect its own
industries through tariffs or subsidies.
5. Wealth disparity: Globalization can exacerbate the gap between the wealthy and the poor,
with multinational corporations often benefiting more than local workers.

 For instance, garment factories in developing countries often employ low-wage

workers, while the profits flow to multinational clothing brands.

 Additionally, high-skilled professionals in sectors like technology or finance may earn

significantly more than workers in other industries.

6. Dependency on Global Supply Chains: Interconnected supply chains are vulnerable to

disruptions, such as natural disasters or pandemics, which can disrupt production and
distribution.

 For example, the shortage of medical supplies during the COVID-19 pandemic
highlighted the risks of relying on global supply networks.

 Similarly, automobile manufacturers faced delays due to shortages of semiconductor

chips, impacting production worldwide.

7. Threats to Domestic Industries: Small-scale industries may struggle to compete with

global corporations, facing challenges from multinational giants.

 For instance, family-owned farms may find it difficult to compete with large
agribusinesses benefiting from economies of scale.

 Additionally, traditional crafts and artisanal products may face stiff competition from
mass-produced goods.

8. Talent Migration: Highly skilled professionals may migrate to developed countries in

search of better opportunities, resulting in a talent drain in their home countries.

 For example, doctors and engineers often leave their home countries for better pay
and research facilities abroad.

 Similarly, academics and researchers may seek positions in universities overseas,

leading to gaps in local institutions.

9. Cultural Dominance: The dominance of Western culture, media, and consumer products
can overshadow local identities and values.

 For instance, Hollywood movies and pop music often influence global entertainment
preferences, sometimes at the expense of local art forms.

 Moreover, Western fashion trends can shape clothing choices worldwide, impacting
traditional attire.

10. Financial Crises Spillover: Economic instability in one country can quickly spread to
others due to interconnected financial systems, leading to global crises.
  For example, the 2008 financial crisis, originating in the United States, had far-
reaching consequences for economies worldwide.

 Similarly, currency crises in one country can trigger panic and affect neighbouring
economies.

These problems with globalization are multifaceted and depend on the situation. Even though
globalization has good things too, it's important to deal with these challenges to make sure
things are fair and sustainable.