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Assignment 1 Organizations and society
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- Radboud Universiteit Nijmegen (RU)
Assignment 1 Organizations and society. Marked with sufficient. Radboud University master business administration 2018/2019.
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Organisations & Society - Assignment 1Globalisation, is it beneficial?
Introduction
These days, we live in a society dominated by organizations and their influence on it. It can
be state that this is not a beneficial development, because of pollution or violation of human
rights, but all those organizations are absolutely needed in order to fulfill our needs, such as
clothing, food and water, shelter and many more.
A phenomenon that strengthens this position of organizations in our modern society is called
globalization. This paper will take a closer look at globalization and the relation between
globalization and social corporate responsibility. In order to do so, there will be attention for
the definition of the concept of globalization. Besides the definition of the concept, the
advantages and drawbacks are brought to attention. At last, the relation between globalization
and corporate social responsibility (CSR) will be discussed.
Definition
A commonly used definition of the concept states that globalization is an ongoing process of
worldwide integration regarding economic, political and cultural aspects, but also countries,
companies, and even individuals become increasingly closer and interdependent. An
important result of this is a worldwide division of labor, in which the production of goods is
spread across the globe. (The Effect Of Globalisation On Corporate Social Responsibility,
2016)
Many authors, among which Joseph Stiglitz (2008), agree with the abovementioned
definition. However, there are also authors, for example, Johnson, D.G. (2002), who think
globalization is far more than trade and investment among continents. Globalisation also
includes: (1) the international flow of ideas, (2), the flow of capabilities, (3) the spread of
knowledge and (4) the flow of institutions and policies, (Johnson, D.G, 2002)
Consequences of globalization
Besides the definition, there is also an ongoing discussion about the effects and consequences
of globalization, and if these are beneficial or disadvantageous. It may be clear that
globalization may have both advantages and disadvantages, but the point of discussion is
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, which one is dominating. In this paragraph, both beneficial and unbeneficial consequences
will be brought to attention.
An author named Johnson (2002) clearly is supporting globalization, as he states that
countries which opened their economies to trade gained significantly, and that no country is
large or diverse enough not to gain from trade. Besides that, he states that the life expectancy
of all countries, either developing or industrial, has increased because of an incredible decline
in child mortality which, according to Johnson (2002), is due to the increased immunization
of people in third world countries.
Furthermore, Johnson (2002) sees an increased agricultural productivity because of improved
agricultural methods, which have spread thanks to globalization. However, Johnson also
acknowledges an unbeneficial development: an increased inequality. But he adds that this
increased inequality is not because the rich have become richer, and the poor have become
poorer. This is because the rich have become much richer than the poor.
However, as we all may know, globalization also has a darker side, as mentioned by Stiglitz
(2008) who even states that globalization did not live up to its potential. According to Stiglitz
(2008), there are several reasons for this. At first, the advanced industrial countries are
causing a lot of damage through worldwide trade, far more damage than the aid they give.
Secondly, according to Stiglitz, money is supposed to flow from rich to poor countries.
At this time, the opposite can be seen, because rich countries transfer the risks to the poor
countries, and also take their money. For poor countries, this will result in debts, which they
cannot pay off while the rich countries are becoming richer and richer. As a consequence of
these events, Africa is seeing per capita incoming going down. In other words, poverty in
Africa will increase, which will result in a growing inequality.
According to Stiglitz (2008), there are three underlying problems that cause the
abovementioned issues of globalization. At first, because of the globalization, people,
countries, companies, etc. have become more integrated and interdependent. However, the
(democratic) institutions and mindset do to this effectively are missing. The second problem
finds its origin in the Cold War, characterized by a tension between Communism and
Capitalism. Because of this, American companies tried to get a foothold in the developing
countries. Something that was not always beneficial for those developing countries.
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