Globalization gives companies access to new markets, thus facilitating a process wherein one can choose to produce, buy resources or sell in different countries according to their specific attributes.
Multinational company outsourcing creates jobs in countries where the wages are lower compared to the country where the products are manufactured. Both the new employees and the company benefit from this situation as the company saves money and the workers can avail of pay packages in tandem with the current industry rate or even one that exceeds the average.
Paul Glewwe's study shows that Vietnamese people working in foreign –owned companies are often paid twice the average salary. If we think about it, we realize that the savings enable the company to be more competitive on the global market, and thus earn more profits and develop itself. Development of a company is often synonymous with hiring, which can be executed at the headquarters of the company or in any country where the company runs its operations.
Outsourcing is a type of foreign direct investment that economically strengthens the country receiving the money. The choice of the countries where the companies invest depends on the trust the companies have in that particular market: the political situation and the business opportunities. Countries do everything in their power to gain political stability and create economic advantages such as lower taxes for foreign companies on their soil.
In 2006, the most significant flows could be observed between the European Union, which received €421 billion in 2006 according to the CNUCED, the United States, €136 billion, (the same year) and Japan. Tradewise, they constitute the leading countries or region; China (€54 billion in 2006) is positioned fourth. Trade agreements between countries such as the European Union (EU) or the North America Free Trade Agreement (NAFTA) encourage foreign direct investment as a firm in a country A is more likely to invest in country B when both A and B conclude agreements on tariffs regarding raw materials or manufactured goods.
[...] Selective and harmonizing phenomenon In addition to the negative side effects described above, globalization is a localized phenomenon leaving people behind and tends to harmonize the way of life of people having a very rich and different culture with that of the Western one. Unfortunately globalization does not benefit everybody equally despite the efforts of non-governmental organizations, charities and the mass hiring of workers. Some people are still left behind depending on their geographical situation (Bhagwati and Srinivasan, 2002). This is particularly the case in India and China where some people benefit from the trade and economic growth by having a premium wage per year of the gross domestic product for China and per year for India) and suitable living conditions. [...]
[...] International TV channels feature documentaries on conflicts of ideas in some countries, on ethnic groups explaining the underlying differences in order to better understand the world today and to enlighten people about the needs of the poor countries. Interest in less affluent countries is on the rise as Westerners now travel more and gain first-hand experience of the constraints facing the people of such nations. Charity associations acting on a global scale are the result of the wide spread of culture and the reaction of the citizen to inequality. [...]
[...] company benefit from this situation as the company saves money and the workers can avail of pay packages in tandem with the current industry rate or even one that exceeds the average. Paul Glewwe's study shows that Vietnamese people working in foreign –owned companies are often paid twice the average salary. If we think about it, we realize that the savings enable the company to be more competitive on the global market, and thus earn more profits and develop itself. [...]
[...] This overwhelming leadership by the Western countries in relation to the rest of the world creates issues, for example, when an American movie is exported to a Middle East country, which doesn't adhere to the same norms, values, and beliefs, as America does. American movies are broadcast across the globe, thus promoting its culture. In the Netherlands, local TV shows only English movies at the expense of Dutch movies. Aware of this, the French government has introduced the “Exception culturelle française” or ‘French Cultural Exception' which allocates subsidies to French movies and promotes French culture around the world. [...]
[...] When it becomes public that a company has been employing children, (sportswear firm Nike was at the center of such a scandal) it creates a fall in sales and the brand image takes a huge battering. Often, companies bent on realizing maximal profits don't hesitate to abuse people in need. A sweatshop is a place where people work in very difficult or dangerous conditions, they are paid a little or no wages and forced to work long hours. Present in 150 countries and a workforce comprising 27 million refugees, illegal workers and people in dire economical need, sweatshops might grant a wage to the worker but imposes a sub-standard way of life upon him, severely restricting his purchasing power, thereby slowing down the growth of the country. [...]
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