Impacts of Economic Globalization
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Globalization takes various forms that mainly include social globalization, economic globalization, and political globalization. Economic globalizations is characterized by rapid movement of information, goods, technology, and services across the world. Such an integral aspect of life comes with positive and negative effects on different sectors. Success of any business depends on the impact of economic globalization. Every business has to find a comfort zone in the global market so that it could enjoy global trade. Those firms that have survived economic globalization experience both negative and positive effects.
In this case, ports are major players in economic globalization because they are the gateway to various countries. Through Shanghai Port of China for example, millions of goods are moved by the hour. Without this busy port, China's export and import business would come to an unpleasant standstill. The port depends on functions of numerous labor, technology, and organizations to run efficiently. If one of vital areas of the port fails, there is no connection among activities causing losses to clients and stress to labor force (Richardson 2005). There has to be enough equipment to facilitate proper movement and handling of goods. The port of Shanghai has been labeled world’s busiest port due to huge throughput every day. Being such a busy port, it has been influenced by economic globalization in more ways than one.
This is arguably the biggest petroleum business globally. Petroleum products are essential to many human activities including farming, automotive, industrial, and cosmetic. Shell Petroleum has spread out its wings in almost every country of the world, commanding a huge amount of the GDP. The business is concerned with import and export of petroleum and has many service stations all over the world (Cragg, 2005). Shell Petroleum employs many people annually and significantly contributes to a regional economy. Impacts of economic globalization have been felt by this company mainly because of its reach and the nature of its business. The company works to meet world's energy demand, which is growing day by day. Company's core values are integrity, honesty, and respects for clients and employees.
Impacts of Economic Globalization on Shell Petroleum and Shanghai Port
The port and petroleum business have experienced common effects of economic globalization through the years. Like a double edged sword, globalization brings forth positive and negative effects but not in equal amounts (Gugler, 2004).
- High speed development to accommodate increased movement of goods. Shanghai port has resorted to the use of technologically advanced tools to manage the number of containers passing through. Shell Petroleum, on the other hand, has upgraded its equipment so that the company could handle petroleum products in its stock.
- Economic globalization has created the need for better communication equipment. This is to enable the companies to handle high influx of communication among various participants in the businesses.
- There has been increased international trade between countries leading to profits for the businesses.
- A ripple effect of economic globalization is that better equipment to handle movement of goods and services increases employee satisfaction and eventually leads to better performance.
- Rapid economic globalization has resulted in a petroleum and port sector major benefits as it creates better cooperation with businesses as well as customers due to improved productivity.
- Through economic globalization, ports and petroleum businesses become integrated with international logistics, which in its turn provides an avenue for them to deliver better services and increase modernization of the businesses in question.
- This may not be a direct impact of economic globalization on ports, but with increased interdependency among nations of the world come improved diplomatic relations, which help create an enabling global business environment.
Both Shanghai port and Shell Petroleum have experienced bad impacts of economic globalization (Loh, 2005).
- Economic deterioration is a result of inadequate measures to handle waste that comes from rapid movement of goods at the port or poor disposal of petroleum waste, for example, massive BP oil spill that affected the ocean ecology. Such an incident resulted in huge losses for the businesses. China also has experienced major pollution due to activity of the port.
- Trade port barriers affect movement relations between some countries. ‘Made in China’ products are the most affected due to poor legislation on free cross border trade.
- Economic globalization sometimes causes cutthroat competition in poor taste. A rush to reach more customers brings out the worst in some businesses, which might in turn damage international trade agreements.
Contrast Unique Impacts of Economic Globalization on Shanghais port and Shell Petroleum
- Profits for the port have gone a notch higher due to increased movement of containers trough it. In 2007, the port experienced a rare container throughput of more than 100 TEUs. Positive effects of this are felt throughout the economy, making life better for the residents.
- Better management is now enjoyed at the port as corruption greatly reduces proper movement of goods.
As the workload increases, there is a need for more labor. This is a positive effect of economic globalization as many people in China are in constant search for work. Better still there are new opportunities each day for both skilled and unskilled workers (Priest, 2007).
- Better access to the port led to increased demand for petroleum, and this way the company is bound to make profits. However, economic globalization led to increased global oil prices, which in its turn resulted to a huge dip in sales.
- Another unique impact is reduction in jobs because the company had to restructure. Modernization reduces the need for manual laborers thus denying people much needed jobs.
- Countries have opened up their borders to free trade and this cuts down overhead costs for the company as their products can move freely through customs.
- Heavy contamination is on the rise as the company is overwhelmed by the speed at which products move that there is little attention to dumping and proper handling of products.
- Power imbalance is evident among top players in the company, which leads to poor performance.
Effects of economic globalization can take any turn, but if handled well, this may be the way for the world to experience better trade with various partners. By making trade easy across the globe, even the most remote parts can access vital goods and services. Through easy movement of goods, services, and technology, world’s population is able to share ideas and contribute to the economy (Marcotullio, 2001). By opening up borders for trade, more jobs are created and there is significant improvement in the quality of life. Economic globalization can be a nightmare or celebration for businesses depending on how it is received.
If the port and petroleum sectors can find reliable ways to cushion themselves from negative effects of economic globalization, the world can make a major turnaround as people focus more on doing business. It takes proper planning and dedication to avoid damaging the environment or boardroom wrangles. Power balance is achieved when resources and profits are shared appropriately among the players. All sectors of the economy are intertwined meaning that impacts felt as far as the Shanghai Port in China are likely to affect the business of Shell Petroleum in Britain. All businesses have a responsibility to manage economic globalization well if they are to enjoy positive results.
Ports and the petroleum industry will continue experiencing the impacts of economic globalization as the world approaches closer towards a single world economy regulated by the World Trade Organization. When this happens, the major question will be how many businesses will survive the great change?
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