Pros and Cons of Globalization

       

When it comes to globalization, businesses are often quick to discuss the positives while governments have a tendency to talk about the negatives.  We have visited several businesses on this study tour, with many of them highlighting the positive effects of globalization. To further reinforce the idea that globalization has more benefits than drawbacks, Simon-Pierre Rhéaume discussed a few success factors of globalization.  The drawbacks of globalization have yet to be discussed on this trip, however we learned in our in-class sessions that these factors should not go unnoticed.

       According to Mr. Rhéaume from the Canadian embassy, some success factors of globalization include; access to international markets, innovation, and workforce benefits associated with cost and labour.  Having access to international markets boosts the opportunity to grow a company and have your products available to potential customers. This is highly beneficial to companies as it increases profits and encourages innovation. By branching into international markets, companies have the opportunity to adapt or invent new products to further increase their revenue and market share. When companies expand into international markets, there is no doubt that labour costs decrease, while the opportunity to obtain a more diverse employee skill base.  These three factors can help companies continue to grow in foreign markets while keeping product and production costs lower.

       When it comes to globalization, some negatives include; interconnectivity leading to decreased country independence, overly competitive job markets, and country specialization.

When companies globalize, it is often times because they excel in one area of production and are looking to decrease costs.  When they take their operations overseas, however, it increases the dependency that company has to a company in another country.  This becomes a problem during times of political uncertainty or war, when a company becomes stuck in a country.

There are positives and negatives to every new venture, especially for a business looking to expand into the global market.  Thanks to the positives aspects of globalization, we are able to enjoy Ottakringer beer back home in Edmonton.

-Lindsay and Matt