GLOBALIZATION:ITS POSITIVE AND NEGATIVE EFFECTS ON BUSINESSES.

A Research
presented to JOVINER Y. LACTAM
SAINT ESTANISLAO KOSTKA COLLEGE, INC.
Poblacion, Manukan, Zamboanga del Norte

in partial fulfillment of the

requirements for the Course General Education
(Contemporary World)

BY

BASIS, EFREN
MACION, REYZALDI
SIMAN, JERRY P.
UNDO, JO-AN
ALIA, CLENT PAUL

BSBA BLOCK 1

OCTOBER 2019
 ABSTRACT
Globalization has played a vital role in the development of international business. No
doubt, international business has a long history, but the real development of international business
was possible because of globalization. Even after that it doesn’t mean globalization only has
positive effects; it does have negative effects on business.
In this study, secondary data has been used for analyzing the effects of globalization and
for studying the extent of globalization on financial services industry. This study discusses the
following point; Globalization Positive Effects of Globalization and Negative Effects of
Globalization.
 ACKNOWLEDGMENT
First and foremost, we would like to acknowledge our ever dearest supportive
family, for not leaving us in doing this study especially in financial support. Above all we
thank God for giving us strength, knowledge and guiding us in the entire study. And to
our beloved and very humble instructor for not leaving us instead keep on encouraging
us in every time. To our friends, and to all the person who are voluntary give their support
in order to finished this study, and to the Saint Estanislao Kostka College Inc., who give
us the opportunity to be here in this institution to pursue our college education, without
you this would not be done successfully. God Bless You All and Thank You!
TABLE OF CONTENTS
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 Chapter I
INTRODUCTION

Globalization is a widely used term in different contexts. Globalization definition available

in some general dictionaries is not very clear. Some dictionaries define globalization as ‘the act of
globalizing’ or ‘to render global’ (Waters, 2001). Many people accepted globalization as a vague
concept and don’t try to define it precisely.

Background of the Study

By this way globalization is a catch all, malleable concept which can be interpreted the
way user wants (Scholte, J., 2000). Robertson (1992) says Globalization refers both the world’s
escalation and compression of consciousness as a whole. Global compression reminds the
dependency and system theories’ arguments. It points out the rising level of dependency between
countries in term of cultural, military alliance, trade, and domination.

International trade has benefited the most from the wave of globalization and has increased
the dependency among countries. The dependency of any country for other country can have both
type of effect negative and positive. It depends on the countries, how much and for what, they are
dependent on one-another. International business has increase significantly after Globalization.
But, it is not always beneficial, it can be harmful also. Before globalizing economy, a country
should understand it clearly that how it is going to take benefits out of globalization and it should
be ready with a contingency plan.

Statement of the Problem

This study aims to determine the importance of Globalization that can affects the
international and Local businesses, its negative and positive effects to the business and how it is
important for the economic growth.

Significance of the Study

This study will be able to contribute ideas for us as a future business man and
business woman that we will be able know how this globalization works and how it affects to the
businesses. It is not just for but those who can read this works, it can open their minds if they will
be able to know this study.

Scope and Delimitation

Although this study states that the title itself “Globalization” is a wide range of study, but
this study that we conducted is for the Local Businesses only. Especially the small business here
in our Municipality, though it is called as small business but they have the big impact to the
globalization in terms of economic aspects.
 Chapter 2
REVIEW OF THE LITERATURE AND CONCEPTUAL FRAMEWORK

Related Literature

Globalization describes how different world cultures, populations, and economies are
interdependent from each other. It is a consequence of cross-border business. Technology, goods,
investments, information, and services along with the labor market are the most popular components of
such activity. Nations have established worldwide integration over many centuries by enabling economic,
political, and social partnerships. In ancient times people moved to distant places to settle, exchange goods
with others, and to produce food and unprocessed materials.

Positive Effects of Globalization

It is believed that globalization has increase economic opportunity and prosperity in the world.
Now the markets are open for trade and resources are used efficiently. Due to this, prices have
come down, employment has increased, and life standard has become better.

Globalization has helped to remove poverty form the developing countries, in 1980 – 2001 people
living on $1 or less than that per day has come down 1.1 billion from 1.5 billion (Burande, 2007).
It’s not the developing countries who has benefited from globalization, developed economies have
also enjoyed the fruits of globalization. It’s very difficult to explain all the positive effect of
globalization on culture, human mindset, trade, employment, capital market and on the other fields.
Still, we have tried to summarize the positive effect of globalization. Some of the positive effects
are following;

Free Capital Market – With the introduction of globalization countries opened their capital market.
This helped companies to operate easily in many countries, as they could change the currency as
per their choice to get it out of the country. It also helped to attract foreign investors to invest in
their capital market which provided funds for developing infrastructure (Rugman, 2002).

Common Market Regulations – In the era of globalization when it became very difficult to operate
in multiple countries due to different requirements of regulation, then countries felt need of easing
regulations and agreed for common market regulations (Rugman, 2002). Now, many countries use
same accounting and tax standards by which it become easy for companies to operate. Later on
countries formed groups according to their trade needs like OPEC, NAFTA, etc.

Wide Operation Field – Globalization widens the operation field of a country, the people of a
global economy can operate in many countries, thus it opens door of opportunities to increase their
market size and profit. Within the country an organization wouldn’t get much scope for increasing
it operation but in a globalized economy it can go mile for increasing its operations (Tanzi, 2004).

Spread of Education – Education is the best positive effect of globalization. Today one can go
around the world for best learning and training facilities. If one is interested in the subject that is
not available in the country, one can go to the country for learning that indigenous subject and
spread the knowledge in one’s home country. There are several examples where people learnt the
subject from other countries and earned name in their own country (Kulkarni, 2009).

Boosts Export – Globalization helped in two ways to boost export; first by free capital flow, and
open market for increasing operation. Some countries set-up special economy zones for giving
extra boost to export (Rugman, 2002). In these zones companies where given tax shops and
subsidized facilities with the condition to export the maximum production form these units.

Flexible Labour market – Globalization helped people to learn multiple skills, while doing
different jobs. By this people moved from one job to another easily. It shows a more open and
flexible labour market with a regulated system to increase investment. When companies moved
from one country to another, they also shifted their people and trained people from that country to
get their work done (Carbaugh, 2008).

Curb on Inflation – When companies moved from one country to other in search of market, they
launched their product on competitive rates. The availability of cheap consumer goods helped
those nations to lower down inflation, which was disturbing their economic growth. Because of
their increasing influence the domestic companies also searched for innovative and better
technology for reducing cost (Carbaugh, 2008).

Economies of Scale – Large companies may not be able to utilize full capacity of their
manufacturing units due to closed economy and small market. Globalization provided score to
these large companies to operate with full capacity, which helped them to reduce cost further
(Rugman, 2002). By globalization not only the companies were able to get economies of scale but
also the consumers.

Technological Improvement – Countries those adopt globalization, opens doors for advanced
technology. When large companies start their operations in developing or under developed
countries, they use advanced technology for operations. Govt. can also access new technology by
agreement with large groups after negotiation for their operations in their countries. Technological
improvement is also possible by to running R&D programme in collaboration with big companies
and by providing training to its people (Tanzi, 2004).

Better Uses of Resources – Resources are scare but still the countries were not able to utilize them
efficiently, in the lack of technology. When they got access on technology, the proper use of the
resources was started. Companies started use capital intensive technology on the place of labour
intensive technology, which saved on cost and helped them to use the man force in other productive
activities (Carbaugh, 2008).

Spread of Culture – Globalization has also affected culture! It is not that every civilization has all
good practices. Today the culture, in which we live, is the contribution of many cultures. Humans
tend to pick new and correct things from other cultures and drop the flaws in their culture.

Societies welcome people from other cultures and backgrounds to form a new culture. Languages,
cooking styles, customs, and dressing styles all have spread from globalization. The other cultural
forms like movies, music and art are also affected by globalization. Now, movies are launched
worldwide, which leave an impression on people and culture (Kulkarni, 2009).

Negative effects of globalization

Globalization has both positive and negative effects. But, for the poor and developing
countries negative effects seems very large (Future-econ, 2009). Economic, political and social
unification was expected from globalization. But, strong and developed economies continue to
exploit underdeveloped and developing countries on the name of business sharing. Power
reallocation is happing in the form of technological and industrial competition (Borade, 2009).
Most economists argue that the positive effects of globalization are more than the negative effects
(Future-econ, 2009). Whatever is the truth behind all these arguments can be analyzed by
discussing these points:

Dumping – Dumping has emerged as a big problem in front of developing countries. By dumping
the developed countries exploit the market in the developing countries by charging low price for
its products, on which price local producer can’t sell its product. In this way, the developed and
advanced countries get a large share of market for their products (Boudreaux, 2008).
Unemployment – Globalization helped many countries to develop technology very fast. Due to
use of advanced technology the use of labour reduce significantly. Because of that the unskilled
employees lost their jobs. Use of capital intensive technology also helped to reduce production
cost, but most of the benefits were retained as increased profit by the manufacturers. One more
reason, behind unemployment was shifting of job location in search of skilled and cheap manpower
(Carbaugh, 2008).
Environment Disaster – Climate change has become a “hot” topic. Global warming is also a part
of global economies. In search of advance and capital intensive technology, countries have
established many industries; those industries are increase pollution rapidly (Lane, 2006).
Traditional labour intensive technologies were based on low power and machines, so the pollution
was not an issue from those industries. Moreover, the products of factories are also polluting the
environment.
Limited Natural Resources – In the race of globalization and development, every country is
exploiting its natural resources extensively, due to that in near future these resources will be
finished. Petroleum is a very important source of energy in present but it will not last long if the
alternative source of energy is not searched (Lane, 2006).
Competition – To globalize their economy countries opened their market for foreign companies,
these companies were large and were using high technologies. Domestic companies were not able
to produce goods on that cost, which put a question mark on the sustainability of these companies.
Competition increased with the entry of new companies in the market. Many home companies
were not able to compete with these multinational companies, so they have to close their business.
Dumping also enhanced completion in these markets (Lane, 2006).
Spread of Diseases – Globalization helped first mobility, due to that unknowingly diseases are
spreading very fast from one country to another (www.darkseptemberrain.com). When people
enters into a new environment he may faces several types of health problems, because of change
in environment. Recently H1N1 flue was also a result of fast and increased movement of people.
Earlier when where no such health facilities were available people used to consume homeopathic
medicines but now on one side where the health facilities have improved a lot the fear of fast
spread of transmittable diseases have also increase (Lane, 2006).
Inequality – Economic development is successful in reality, when it is able to generate equal
opportunities without any consideration. But globalization has increased inequalities, now the gap
between the poor and the rich has increased. No, doubts there are improvement in the overall living
styles but the way it was expected to improve that couldn’t be achieved. Inequality has also
increased in terms of skilled jobs. Those who are skilled can get better jobs, but those who are not
updated with new skills find it difficult to change their jobs (Sharma, and Starik, 2002).
All these points clearly indicate the negative and positive effects of globalization. Like any other
thing globalization also has both aspects which are bad and good for mankind. It the human being
who has created this global phenomenon, so he can also control it and use it for the betterment of
the world without any discrimination.
Financial services industry
Financial services industry provides services related to money, for money, with money.
Financial services are utilization, manipulation, management, storage, and creation of money.
There are many companies to serve the market for financial services for different needs, but no
single company has the dominance in the financial services industry (Global edge, 2010a).
Financial services industry is more open than ever before.
Definitely globalization is one of the reasons behind this growth. The member countries of WTO
opened their economy for increase world trade and free market. International trade needs currency
transactions, which is not possible without global financial services. When we say global financial
services, it means any one can access the services in any country any time after paying the
applicable charges.

Information technology is playing a crucial role in delivery these services. Plastic money
has made transaction easy which carrying cash. It not only helped to access financial service round
the clock but also around the world (Dolan and Lindsey 1991). This was possible because of
globalization of financial services and financial industry.
Globalization affect on financial services industry is not equal in all the countries and regions.
Where in some countries it is intensively used, in some countries financial services are still the in
the infant stage. Globalization is not simply about the presence of any business in many countries
around the world.

Conceptual Framework

The impact of globalization in the changes a lot in terms of the culture, values, and
economy. It also helps the improvement of infrastructure in the Philippines. It gives more
opportunities to all Filipino to work abroad and help each country to stay connected.
Globalization has also helped to let know the people about global warming, climate change, and
the natural resources of the Philippines.
 The effect of globalization can help a flexible communication and greater understanding
in terms of improvement and development of each country condition. It also helps the local and
international market to create flexible labor across the miles. Globalization affects the
international market and enhances economic growth.

Research Hypothesis(es)

Globalization has its affect on every industry; the difference is in the extent of the affect
and in the aspects of its effect, positive or negative. Where globalization has some positive effect,
it does have negative effect. Because of globalization countries have opened their door for
multinational companies; market for business is free and wide now. Globalization has also
increased the gap between haves and haves not. Financial services industry is not an exception in
this globalized world. Globalization has also forced world economies to free financial market.
Most of the countries are enjoying modern and advanced technologies for financial transactions.
People of different countries from the different regions of the world have access on similar
financial service. Use of information technology and plastic money has played a significant role
in the globalization financial services industry. Financial services industry is globalized to some
extent, but the restrictions on the flow of money from one country to another limits its
globalization.

Definition of Terms
Manpower- is the total number of people who can work to get something done. How quickly you
clean your house after a big party will depend on how much manpower you've got.
global phenomenon- are major natural or human. events or processes which possess the capacity
to affect the globe or. significant parts of it, and require more than a local or national. response. A
response, which is global in scale, would usually influence the majority.
Globalization- he process by which businesses or other organizations develop international
influence or start operating on an international scale.
 Chapter 3
METHODOLOGY

While this subject may also be fruitfully studied from a historical, sociological, demographical
or political viewpoint, here the adopted methodology will be only economic, with particular
attention devoted to the applied approaches.

Research Design

This study is qualitative in nature since the research questions is answerable by yes or no, which
is an open ended questions. Specifically, The Study is correlational as it aims to determine if there
is a positive and negative effects of globalization in businesses to assess whether the degree of
association between these variables is significant. Cristobal & Cristobal (2016) defines correlation
research as the research design employed to investigate the direction and magnitude of
relationships among variables in a particular population.

The Sample

Before the study began, the research team obtain informed consent approvals or the protection
of human subjects at saint Estanislao Kostka College Inc. with a total of 100 participants.
Participants are assigned to one of three selected business man or woman or three all community
business groups, each of which range from two to three participants in each group. The sample
reported a mean age of 25 years (30-60) years. In general, participants are split rather by everyday
income and businesses ownership identification.

The Instrument(s)

The questionnaire is composed of two parts. Part one seeks to gather data regarding the
economic profile of the participants. Namely income, capital, and gross net. Part two presents the
positive and negative effects of globalization in businesses and instruct the participants to check
those statement depends upon their mode of appreciation or the factual of the statement or issues.
Possible answers are yes or no.

Intervention
 Since the researchers were not able to use an experimental research design.
Intervention(s) were not included.

Data Collection Procedure

The researcher shall seek permission from the authors of the instruments that
are adapted in the study. Obtained informed consent signed up by the instructor before conducting
a survey. The participants are signing a consent form as a proof that they are voluntarily
participating in the study. The questionnaires are distributed to the selected participants of the
population in the locality of manukan. Questionnaires shall be retrieved the same day as they were
given to ensure a higher return percentage of questionnaires.

Plan for Data Analysis

To answer the questions presented under the statement of the problem, the following Statistical
tool were employed.

> Percentages are used to present and analyze data regarding the business profile of the
participants.
 Chapter 4
PRESENTATION AND ANALYSIS OF DATA

In reporting the results, the researcher stays close to the statistical findings without

drawing broader implications or meaning from them. Further, this section includes

summaries of the data rather than the raw data (e.g., the actual scores for individuals). A

results section includes tables, figures, and detailed explanations about the statistical

results

(Based on First Question in the SOP)

Includes results and discussion relevant to the first question of the research or the

first variable of the study.

(Based on Second Question in the SOP)

Includes results and discussion relevant to the second question of the research or

the second variable of the study.

Re-conceptualized Framework

If some or all findings are different from expected, have a section on re-

conceptualized framework at end of Chapter 4 and make diagram of re-conceptualized

framework. Starting with text, cite figure (diagram) of re-conceptualized framework.

Explain changes vis-à-vis Conceptual Framework of the Study.

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 Chapter 5
CONCLUSIONS AND RECOMMENDATIONS

This chapter presents the conclusions and recommendations of the study.

Conclusions

The portion that gives meaning to your research and your results. The objective of

the Conclusion section is to examine the results, determine whether they solve the

research question, compare them within themselves and to other results (from literature),

explain and interpret them, and then draw conclusions or derive generalizations, and

make recommendations for applying the results or for further research.

Recommendations

Write recommendations for beneficiaries of results of study cited in Significance of

Study.

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References

Follow the APA, 6th Edition style for referencing.

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Appendices

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