We Must Reduce the Negative Impacts Associated with Globalization

Globalization has transformed the world economy over the past years. The spread of ideas and technology across borders has facilitated new avenues of trade, creating new markets and expanding others. However not only has the world benefitted

One of the primary reasons Wal-Mart owners purchase foreign-made goods is that those imports are often less expensive and have great bargains. In the late 1970’s and early 1980’s, Sam Walton, the founder of Wal-Mart, went overseas looking for goods to sell in Wal-Mart stores.1 “Low cost imports from Asia became a vital compound of Wal-Mart’s low opening price point strategy,” says Hendrick Smith, an esteemed journalist from the New York Times.2 Hendricks’s research shows that Wal-Mart stores make more profit on the items manufactured in China than on items that are manufactured in the United States. Other big brand retailers, such as K-Mart, Home Depot, Target, etc… have followed Wal-Mart’s example and long since turned to foreign production. Wal-Mart’s power has made a tremendous impact on American made companies, giving them no other choice than to negotiate on the very low prices for their products. Gary Gereffi, a Duke University professor who studies global supply chains, said in a PBS interview, “Wal-Mart is one of the key forces that propelled global outsourcing - off-shoring of U.S jobs - precisely because it controls so much of the purchasing power of the U.S. economy,” Wal-Mart used its buying power to force local small businesses into squeezing their costs and keeping their profit margins very

After reading the history of this person, I experienced different feelings in the first pride that in this world there are still such people, secondly the sadness that I as a person still failed to do something extraordinary for this world. From what I have read, I have noticed, to a large extent, the positive aspects of globalization. Even Samir himself speaks about this that they greatly influenced him “Globalization has had a very strong effect on me. It has allowed me to live with my friends and extended families that live in very different cultures and settings.”

Every single major company, not only in the United States, but in the world, has contributed to globalization. It’s hard to find a large organization that has not opted to outsource for materials or labor. Businesses and consumers find themselves enjoying most of the effects of globalization. With the countless benefits of it, the drawbacks are often not discussed. This video did a great job of explaining how globalization might be negatively impacting our economy; however, the video also did not undermine the clear advantages.

Trade policy continues to be an important aspect in globalization at least in some of the lower income developing countries. Widespread use of computers, faxes and mobile phones, introduction of the internet and e-commerce, are quicker and cheaper means of transportation. In some cases offered in opportunities to developing countries, but in other cases between global firms and traditional industries globalization opened up other opportunities for developing countries to create jobs and expand exports. In practice, many developing countries competing for foreign investors offered longer tax holidays, costly subsidies, and various incentives for multinationals. The competition among developing nations reduced positive net effects of globalization or, furthermore, delayed them.

Advocates of economic globalization state that “globalization offers a number of opportunities for individuals.” These “supporters” promises that globalization has the potential to make the world a better place and that it can, handled properly, solve world-wide poverty and unemployment. Also, these same individuals are for free trade, which is said to promote economic growth, create jobs, lower consumer prices and encourage competition. Because of globalization, free trade offers unlimited opportunities for business undertakings to create trade all over the world. There are several way in which trade is linked to globalization. The first way includes the extraordinary progress of foreign country investments. This progress has been permitted by worldwide internet accessibility. Another way, is the increased competitive advantage, through a diverse labor source. Different countries have specialized labor that goes along with in their manufacture goods. The evolution of technology modernization has also been subjective by trade on a worldwide

Additionally when choosing suppliers, Wal-Mart has the upper hand because “Wal-Mart will only pay the most competitive prices” (Ehring 4), meaning that if Wal-Mart finds a supplier that will give them a lower price, the current suppliers will lower their prices to match it (price matching). One aspect of Wal-Mart that sets them apart from other corporations is how they manage their relationship with their suppliers. Wal-Mart is a dominant force and has become such an important account for their suppliers that they have managed to eliminate Supplier Power therefore they can pursue achieving their goals and concentrate purely on their Cost Leadership Strategy, which serves the consumer with "Everyday low prices."

4. Relations with Suppliers- Wal-Mart has in place a system that helps to achieve their goal of lower prices. This Information Technology system includes computers, networking, and internet that cuts inventories and waste and helps with speedy delivery. This system also helps Wal-Mart to keep in constant contact with suppliers by transferring the data that suppliers need so they know what Wal-Mart needs. Wal-Mart also works with suppliers to improve their production and squeezes the best prices out of its supplier. The video referred to Wal-Mart as the customer’s agent. All of this focus Wal-Mart puts on suppliers reduces costs and lowers prices. Wal-Mart’s technological/logistical leadership remains unmatched by competitors (Web, 2005).

Many people may ask the same question: “Is Wal-Mart good for the economy?” or even “What are Wal-Mart’s standards for suppliers?” Wal-Mart is currently holding over 4,000 stores in the United Stated and maybe about more over 3,000 worldwide. As many people may know, Wal-Mart is and has been the largest retailer in the world for many years now. In the year of 2004 Wal-Mart had accounted for 6.5 percent of the retail sales or so that was documented. The well-being and wealth of specialists over their production network is the Mindful Sourcing bunch 's top need, which may be the reason of why Wal-Mart suppliers are contractually needed to sign their “Benchmarks for Suppliers” before they can even be endorsed to

Strengths of Wal-Mart include their ability to control operating costs, immediate restocking of shelves, and everyday low prices that they pass on to the consumer. Weakness of Wal-Mart includes the perception of crushing “mom and pop” stores in communities they enter and a lack of workers’ rights. These weakness are minor compared to their distinct advantages concerning cost, and are vigorously defended against. Wal-Mart’s bargaining power with suppliers is immeasurable. Whereas traditionally, retailers like Wal-Mart would make requests and wait for orders from suppliers, due to the sheer size and reach of Wal-Mart, they dictate to suppliers the terms, and often have increased clout concerning prices of units they wish to carry. Wal-Mart can make or break suppliers due to the reach they have with the American consumer. It is estimated that everyday one-third of Americans shop at Wal-Mart (Zimmerman 2008). Thanks in part to their dominance in the industry and

Wal-Mart had a very sophisticated IT infrastructure in place to help integrated its suppliers into its supply chain. This IT system was a source of competitive advantage for Wal-Mart in the US allowing it to be a top notch negotiator and lower prices from vendors (Kim R. B., 2008). In Korea, however, Wal-Mart met with resistance from its distributors regarding integration into the IT system and ultimately did not create a nation-wide distribution network. (Kim R. B., 2008) The managerial style of Wal-Marts executives, especially their direct demands for lowering prices while negotiating and having distributors pay to have their wares displayed in good shelf space were direct causes for the soured relations between Wal-Mart and its vendors in Korea (Chang, 2008).

Over the past ten years, Wal-Mart has become the world’s largest and one of, if not the most powerful retailer with the highest sales per square foot, inventory turnover, and operating profit of any discount retailer. In its transition from regional retailer to global powerhouse, the organization has become extremely successful with supply chain management. Wal-Mart began with the goal to provide customers with the goods they wanted whenever and wherever they wanted them. The company then focused on developing cost structures that allowed it to offer low everyday pricing. Walmart then concentrated on developing a more highly structured and advanced supply chain management strategy to exploit and enhance this competitive advantage and assume market leadership position.

Across the world, globalization is one of the most significant aspects that has occurred over the last fifty years. It allows a country to integrate economically with other countries through a global network comprised of people, trade, and transportation. With the global landscape only becoming more intertwined, globalization and its inherent pros and cons seem to be here to stay. In many areas, global powers tend to lack in rectifying the negative aspects and only focus on the positive side. America, for example, is a leader in the globalization efforts, even though it has greatly effected job opportunities at home, widening income gaps, and an increased standard of living due to fluctuating world markets.

Today, Walmart is a superstore empire with 11500 retail units in 28 counties and employs 2.3 million workers. To reach this success, Walmart has mastered their supply chain management strategy and system that has allowed them to cut costs and allow consumers to save money. One technique that Walmart uses is to have fewer links in the supply chain. Walmart started working directly with the manufactures to save money and be able to have more control over its supply chain. They used a method called Vendor Managed Inventory which made manufactures responsible for managing Walmart’s orders and keeping them in stock from them inside Walmart’s warehouse. [2] Walmart only sought out strategic vendor partnerships. Walmart would only buy from suppliers who had the best price and were in a position to meet demand. They then negotiated lower prices by offering to order from them long term and to make high volume purchases. Walmart then created communication and relationship networks with the suppliers which allowed

Economic globalization refers to interdependence of economies around the world as a result of flow of Capital, Labor, Natural Resources, and Technology across borders. The development of communication and transportation technologies coupled with digitization of all processes is resulting in fast expansion and integration of market economies. Globalization of the financial sector has become the most rapidly developing and most influential aspect of economic globalization. The Multinational corporations (MNCs) have become the main carriers of economic globalization. They are globally organizing production and allocating resources according to the principle of profit maximization. Their global expansions are reshaping macroeconomic mechanisms of the operation of the world economies. Globalization has positive and negative impact on developed and developing countries however the loss of lower skilled job in developed countries is sensitive impact however there are overall positive impact in the world.