• Home
  • Business
  • Title: Why are governments and Businesses Crucially Important to a Globalized Society?

Title: Why are governments and Businesses Crucially Important to a Globalized Society?

  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    Masters
  • Page:
    5
  • Words:
    3255

Title: Why are governments and Businesses Crucially Important to a Globalized Society?

Executive Summary

The purpose of this essay is to discuss the roles of governments and businesses in the globalized society by exploring the partnership between the former and the latter in enhancing the increase in globalization. The review of academic journals, textbooks, government sources, magazines and quality websites were used as sources in the compilation of this report. The essay has discussed the role of civil society in ensuring that the voice of the people is heard in business and government decisions. The collaboration between the civil society organizations and government ensures that the interests of all stakeholders are considered in national dialogues. The civil society has taken advantage of the growth of internet in sensitizing the public on the public space available for national dialogue. The partnership of businesses and governments has resulted in enormous growth in international business which is an important ingredient to a globalized society. Governments and businesses have worked together to enhance the growth of a globalized society. In this essay, the civil society plays the role of arbitration to make sure governments and businesses are held to account for their operations and decisions that they make. It is argued that collaboration between governments has led to elimination of barriers that hinder trade development. A globalized society cannot exist without stable governments that ensure businesses operate peaceful without using the pretense of protectionism to wade off competition from other players in global world. The essay concludes that businesses and governments are the fabric that a globalized society is built on.

Table of Contents

Executive Summary 2

Introduction 4

Discussion 4

Conclusion 10

References 11

Introduction

This report traces the history and forces behind globalization that include internet technologies, access to computers by households, increase in capital flows, economic liberalization and financial deregulation. The formation of international organizations like the World Trade Organization has been identified as one of the move that enhanced international business. Barriers created by individual governments were huge impediments to the growth of businesses prior to the formation of international organizations such as the World Trade Organizations (WTO). The report identifies and explains the role of the government in the growth of a globalized society. The collaboration between governments and businesses has resulted in increased globalization through elimination of trade barriers and formulation of policies that favour international businesses. The role of the government in directing the force of globalization has been discussed. The cruelty meted on animals in Indonesia and the outcry from animal rights organizations indicates why governments are important in regulating business. The report demonstrates how businesses and governments propel the increase in forces behind globalization. The report explains the role of the civil society in holding businesses and governments accountable and ensuring the rights of the marginalized are considered in every national dialogue. Activism and revolutions have been a result of ignoring the needs or voice of the oppressed. The report concludes by recounting the role of businesses and governments in building a globalized society.

Discussion

Globalization is a terminology used in the description of various worldwide phenomena. It has received positive connotations from people who lobby for more economic integration beyond national borders whereas it has been greatly opposed by those who see it as a threat to social cohesion as well as encouragement of unfettered capitalism hence undermining the welfare state (McGrew & Lewis, 2013). Globalization has a great impact on the nation-state and it cannot be wished away. In the last two decades, the internet has brought about enormous opportunities and benefits to economies and societies around the world. The internet has given voice to communities and individuals hence enhancing accountability and transparency and encouraging collaboration among people (Dunning, 2014). It has prompted economic development, bringing new products, new markets and services as well as transforming the manner in which business is carried out. It has offered simple and instant access for many people to communication, information, entertainment and education. Computers have invaded millions of households leading to acceleration of globalization. This move has been supported by the emergence and development of internet technologies. The role of computers has been extended besides being just a tool for state as well as business organizations but furthermore as an electronic appliance for retrieval of information and processing, for entertainment, for education and for communication. Communication has enhanced human and technical ability to access; interpret as well as application of information (McGrew & Lewis, 2013).

It is estimated that in two decades from now there will be one billion personal computers as well as three billion telephones around the world. Technological innovations together with increased economic liberalization have made entrepreneurs especially multinationals to take advantage and open many markets in enhancing production processes around the world (Carroll & Buchholtz, 2014). Emerging economic opportunities permit greater movement of foreign capital; management and technology to a large extend by transnational corporations. Internet has revolutionized connectivity in the global world. Communication has been enhanced tremendously and allowed people to comfortably communicate without travelling. Businesses and governments have benefitted from increased connectivity. Four main forces propelling globalization include entrepreneurship, global social networks, technological innovation as well as reduction of communication costs; and trade and investment liberalization (Carroll & Buchholtz, 2014). National governments have played a major role in creating room for more interdependence as well as economic integration of particular activities by the elaboration and adoption of policies and regulations that are market oriented at both local and international levels.

The momentum of global integration picked up in the 1980s when countries’ governments moved to support economic liberalization. The latter comprised of deregulation of the financial sector, expunging controls on foreign exchange as well as increased trade freedom (Isin, 2013). Financial deregulation has prompted progressive removal of capital controls, removing of controls on interest rates, and furthermore, removing traditional barriers to entry to banking as well as other financial services. Governments’ effort to ensure free trade and enhance the removal of trade barriers have been seen in eight successive negotiating rounds of General Agreement on Trade and Tariffs (GATT) that culminated in the formation of the World Trade Organization (WTO) in 1995 (Flohr, Rieth, Schwindenhammer, & Wolf, 2010). World Trade Organization is a multilateral trading system. WTO has led to reduction of barriers to trade as well as liberalization of services and capital flows. A globalized society has been created through businesses and government effort. The WTO has emphasized keenly on an ever-growing range of policy measures that affect the terms of conditions of accessibility to markets like standards and regulations, intellectual property rights, and subsidy practices. As contrarily perceived economic globalization is not a blind force. Individual governments have formulated policies and rules of a globalized society (Isin, 2013). Economic globalization is the outcome of policy decisions that are made by individual countries that permit global market force to operate within their environment. It is essential to comprehend the political foundation of economic globalization in order to desist understanding this phenomenon as being a deterministic force without direction. Governments set rules on which partner they prefer to work with and the manner in which the least powerful can be engaged in policy-making within the international realm.

Some governments do not possess much leverage as compared to others in formulating of the international political and economic agenda owing to the existence of power imbalances among nations that are evidently reflected within international institutions. Consequently, the present form of the globalized world is hugely directed by rules that have been advanced by one region of the world: the most influential and they do not often favour the developing countries as well as countries in transition. Globalization is a dynamic and powerful force behind growth and development as emphasized in the 2000 Bangkok Declaration (Dunning, 2014). Most businesses have to register with local governments prior to being allowed to operate. The importance of registration is to define the owners’ of the company financially liability. It limits the risk involved to the amount the owners have invested in that particular organization. Registration is vital since it permits the government to monitor companies in the execution of its other functions within the business realm. The actions by the government have a significant impact on the economic value of companies (Scherer & Palazzo, 2011). Government actions like developing infrastructure as well as accessibility to capital are positive to the growth of the company finances.

The cruelty meted on animals in Indonesian abattoirs shows the need government involvement in business in the globalized world. Many people were horrified and angry at what they saw through the ABC broadcast. The Australian government considered to live exports to Indonesia. The Australian cattle industry depends on the Indonesian market for live exports. The Gillard government promised to look for market in South Australia for farmers and provide transport subsidies to access the market (Bettles, 2016). The meat processing is expected to grow Australian jobs if the Gillard government helped farmers in the short term with transport subsidies. It was argued that a flood of emails into in-boxes of politicians was not a good basis of making snap policy decisions especially where professional activists are involved without comprehending the complexity of the matter at hand. Criticisms of the proposed policy decision observed that electronic communication systems made it very easy for anyone to join a ‘lynch mob’ without necessarily leaving their desk. Investigations were deemed to be underway into the treatment of Australian livestock across the Middle East beginning 2003 and returned with the horrific mistreatment evidence (Bettles, 2016). The Gillard government considered halting the live trade to Indonesia in the light of brutality. In a globalized society businesses and government holds a pivotal role in moderating operations within the global world. Government formulates and shape policies that affect businesses in the globalized world.

The international business growth is the foundation upon which future economic prosperity across the world is built. Nation state’s barriers, their political boundaries as well as issues relating to sovereign matters can restrain the growth of international business. In order to deal with such issues, many governments are trying every means possible to facilitate international businesses which enhance a globalized world. Businesses and governments are interdependent in the globalized society and in the course of international business the interdependence has been enhanced through the globalization of economy (Henderson, 2015). The policies made by the local governments like the Australia reaction to the Indonesia cruelty scandal can have very deciding implications. The requirements and restrictions placed on business such as licensing and other regulations, formalities and taxes have a direct effect on the ease of operating a business. Every law formulated by the government come with a cost of compliance and the burden falls squarely on businesses and if the costs are exorbitant then the business becomes less profitable. Unfavourable business conditions drive away business and affect the global economy negatively. Businesses and governments have played a role in the growth of a globalized economy. In some circumstances the governments inhibit the growth of the globalized society by imposing more taxes on international business as compared to the domestic businesses (Appiah-Adu, 2013). Most governments do this in the name of protecting the domestic industry from unnecessary competition from the global players. There are also quantitative restrictions such as quotas that some countries face when exporting products to other countries.

Organizations are most likely to take part in practices that are beyond the main purpose of profit maximization as well as shareholder value and pursue broader social benefits for external constituencies when they experience institutional pressures at community levels. The pressures has intensified in the past fifteen years due the result of civil society getting more organized, use of new technologies and availability of social networking services reaching a global scale as opposed to lobbying of individual governments (Arenas, Sanches & Murphy, 2013). Lobbying from the civil society can assume the form of conflict but when organizations overcome conflict and work together civil society organizations, they are likely to be successful in taking their role as citizens who are responsible, implementing corporate social responsibility policies as well as improving the environmental and social impact of the their production processes. Collaborations can lead to partnerships between businesses and civil society organizations (Scherer & Palazzo, 2011). Working together between local communities and civil society organization is perceived as producing benefits for companies through assisting then to take control over factors to do with the environment. Transition from conflict to collaboration is crucial since it is likely to lead to critical cooperation, enhance changes in business operations and result into improved environmental and social impact. Open, potential and latent conflicts between civil society and businesses are likely to reduce in the future. More productive interaction is likely to develop. Civil society activities like media campaigns and consumer boycotts usually need a response from companies and this may involve entering into a dialogue to look for ways of mitigating or resolving the conflict (Arenas, Sanches & Murphy, 2013). Conflict-resolving represent a type of cross-sector collaboration.

It is vital to see that throughout the Arab Spring as well as electoral revolutions prior to that, civil society was trying to lobby towards smooth, non-violent and peaceful transition to democracy. Contrary, the post-revolutionary duration showed that many broad social movements did have a lot of trouble in reorganizing themselves to purpose their role within the new environment. After the colour revolutions failing in Georgia and Ukraine failed to transform the collective energy into moderate, organized power, some of the movements were converted into political parties and tried to sail through elections to parliament (Kudlenko, 2015). In Georgia, a huge part of the civil society was absorbed by the state. Civil society failed to succeed in its primary society of monitoring and constraining the state both in Ukraine and Georgia since it was alienated from it. Alienation does not translate to autonomy that is needed to the success of the civil society. After the ousting of President Ben Ali in Tunisia the state was more accommodating and inclusive to the civil society. Young revolutionaries and actors in civil society were allowed to be heard by the government. However, the identification of secular civil society organizations and organizations that are religiously affiliated deepened after the Arab Springs hence reducing the contribution of civil society to reforms (McGrew & Lewis, 2013). Furthermore, associations by women as well as human rights activists continue feeling excluded from the much needed dialogue with the authorities. There was a boom of civil society organization in Egypt after the Arab Soring and the old comprising organizations disappearing. Democratization is a very long process and there is room for change for the better. There have been changes in the international approach to actors in civil society in Georgia, Ukraine, Egypt, and Tunisia (Kudlenko, 2015). This is an important step towards success. The struggle for democracy does not stop with the revolutions.

There is need for continued activism to consolidate the gains made during the revolutions. Civil society organizations have to build better domestic networks prior to joining international ones to enhance their outreach. Enhancing cross-country and inter-regional contacts between states can be very beneficial. Without peace and stability, the globalized society can be undermined leading to conflict, suspicious and bloodshed. Business is negatively affected. Governments and businesses have to work together for a revitalized global society (Carroll & Buchholtz, 2014). The growth of the globalized society has benefitted immensely from the collaboration between the government and businesses. The civil society has played a role in ensuring that local communities are involved when deals and signed and companies put up. Ignoring the voice of the marginalized can lead to more strive and conflict in future (Appiah-Adu, 2013). If governments are not held to account in a globalized society, it is recipe for civil strife in the future. The challenge of the government is to perform its functions within a responsive and balanced way and collaborating with all other stakeholders. Governments that have a tendency of intervening disproportionately in the market can constraint innovation, restrict free flow of ideas that could benefit citizens, reduce investment as well as limit the potential social and economic benefits that are provided through the internet (Haufler, 2013). Policies targeting establishment of a robust network has to be supported by multi-stakeholder consensus and avoid protectionism or any other policies undermining the rights of other users. Governments have a big role to play in enhancing business with an important part of the globalized society.

Conclusion

The growth of the international business and interconnectivity is the hallmark of a globalized society. Increased communication and internet connectivity in households across international boundaries have enhanced the growth of a globalized society. The actions by the governments can undermine or enhance the growth of a globalized society. Businesses thrive where there is government and political stability. Marginalization of part of the society can lead to civil unrest as was the case during the Arab Spring. Revolutions emerge due to people feeling that they are oppressed and ignored in the national dialogue concerning their fears and needs. Governments and businesses is the fabric through which a globalized society is established. Without proper governments it is almost impossible to talk about a globalized society. The corporate social responsibility is important for businesses to make sure that they stay in touch with the needs of the community and meet government requirements. Excluding some groups from the national dialogues is cause for civil strife if it goes on unchecked. Civil society has played a big role in agitating for the needs of marginalized groups and ensuring that businesses do not only focus on profit-maximization but also in the development of the welfare of the society. Governments have a role in eliminating barriers to trade and ensuring that businesses proper within the country. Globalization has being guided by government and businesses working together to achieve development goals.

References

Appiah-Adu, K. 2013, Governance of the Petroleum Sector in an Emerging Developing Economy, Gower Publishing, Ltd.

Arenas, D, Sanches, P and Murphy, M. 2013. Different Paths to Collaboration between Businesses and Civil Society and the Role of Third Parties, Journal of Business Ethics 115 pp. 723-739.

Bettles, C. 2016. “Indonesian Live Exports Scandal Revisited” in The Land, 30 May 2016: http://www.theland.com.au/story/3936826/indonesian-live-exports-scandal-revisited/

Carroll, A.B. and Buchholtz, A.K., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education, London.

Dunning, J.H., 2014. The Globalization of Business (Routledge Revivals): The Challenge of the 1990s. Routledge

Flohr, A., Rieth, L., Schwindenhammer, S. and Wolf, K., 2010. The role of business in global governance: Corporations as norm-entrepreneurs, Springer, New York.

Haufler, V., 2013. A public role for the private sector: Industry self-regulation in a global economy. Carnegie Endowment, London.

Henderson, D., 2015. The Role of Business in the World of Today1. Business, Capitalism and Corporate Citizenship: A Collection of Seminal Essays, p.14.

Isin, E.F., 2013. Democracy, citizenship and the global city. Routledge, New York.

Kudlenko, A. 2015. From Colour Revolutions to the Arab Spring: The Role of Civil Society in Democracy Building and Transition Processes, Journal of Contemporary Central and Eastern
Europe 23:2-3 pp. 167-179.

McGrew, A.G. and Lewis, P. eds., 2013. Global politics: globalization and the nation-state. John Wiley & Sons, London.

Scherer, A.G. and Palazzo, G., 2011. The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy. Journal of management studies, 48(4), pp.899-931.