ECONOMIC CONSEQUENCES OF GLOBALIZATION ON TELECOMMUNICATION INDUSTRY Essay

SUMMARYWhile discussing the topics of raft, victimization and political economy, globoseization is often discussed. In general, worldwideization means a process in which world economies sound highly integrated, lede to a world(prenominal) economy and highly global economic insurancemaking, through planetary agencies such(prenominal) as the World Trade Organization (Todaro & Smith, 2006). Since late 1980s, the change magnitude globalization in the manufacturing sector and service sector has also globalized the telecom industry. A tumescent number of telecom companies are expanding rapidly from their hearth countries to other countries in crop to increase their customer base and their sales, take out course. Globalization has with it many challenges and economic benefits too. For many economists, globalization can precedent serious troubles in the whole world, such as unlikeness is accentuated, environmental degradation, and dominance of rich countries etc. But at the same prison term prop iodinents of globalization are of the get a line that globalization leads to the rapid growth of cognition and innovation and improved backing standards.ECONOMIC ANALYSIS OF GLOBALIZATIONHow globalization occurred or which forces gave birth to this phenomenon? The three chief economic and fiscal indicators that take to globalization areThe international trade of goods and service, the widening and freeing of trade has led to globalization to increase at a rapid pace. The greater flow of capital because of growth of global capital markets. Globalization of financial sector is the just about influential aspect of economic globalization. The greater ride of people more or less the globe has also contributed to rapidly growing globalization, interruption down cultural barriers. Globalization means integrating of unlike markets in the global economy. Globalization whitethorn occur in different markets such as financial markets, commodity markets and even i n the service sector (Scholte, 2000). Producers and consumers and national economies as a whole benefit from the process of globalization. For example, economies whitethorn benefit from specializing themselves in particular products in which they have comparative advantage. Firms may become follow competitive through globalization by accessing to tuppeny raw materials from other countries. Similarly, benefit of economies of scale is achieved through access to wide markets and higher demand for products, thus reducing average production cost of the firm. Large transnationals are the main carriers of economic globalization. They are globally adjust their production and resources according to the principle of profit maximization.GLOBALIZATION OF TELECOMMUNICATION INDUSTRY- incident OF VODAFONEInitially telecom industry was owned and controlled by state-owned national telecommunication companies. But with the passage of time, innovation in technology and globalization has change the nature of telecommunication industry. Globalization has at large(p)ed up markets and brought competition in this sector. National telecommunication companies were creation privatized and the industry deregulated to make it competitive. All everywhere the world, the multinational companies have become the main vehicle for accelerating globalization. Vodaf unitary, a British multinational telecommunication company, is the worlds leading telecommunication having probative existence in Europe, United States, Middle East, Asia Pacific and Africa.It is one of the most rapidly flourishing global companies, which started as a holder of one of the first two fluent communications licenses in the UK and now its a dominant global brand. (Ibbott, 2007) provides a view that Vodafone created a friendly network that was involved in mergers and acquisitions anddeployment of a global network of mobile technology that serves a proportionate mobile customer base of 198.6 gazillion in 2006. Ibbott (2007) explained what really globalization means as A global company is one that permits its local operations to act in the video of the market locally and yet can act in a truly homogeneous way with respect to the supply and provision of its pith products and services Vodafone is a global company as its sourcing and supply cooking stove activities are transferred to be entirely global for the major part of its investment, season services remain local (Ibbott, 2007). Globalization does non mean to open operations and branches in other countries but to make its operations global, not directed by the head office located in the grow country.CONSEQUENCES OF GLOBALIZATION ON TELECOMMUNICATION INDUSTRY- CASE OF VODAFONEGlobalization has become a vital aspect of the global economy and strongly influences the comparative advantage of economies. (Salvatore, 2004) examined the effect of globalization on the comparative advantage of Europe for some(prenominal) goods and concluded that Europe has a comparative disadvantage in telecommunication with respect to lacquer, United States and Dynamic Asian countries. The degree of globalization is a significant element in examining the international competitiveness of economies.Large multinational corporations are enjoying the benefits of globalization, the most. Almost 50 percent of total earnings of Vodafone came from hostile sales, i.e. Asia Pacific and Middle East region. The CEO of UK-based Vodafone Group talking about global leadership said (Yunker, 2008), Less than 5 percent of our profits comes from UK. We have had to fundamentally redesign this company as a global company. We are a highly consumer-centric company. In Germany, we pure tone German. In Italy, we feel Italian. In Spain, we feel Spanish. In India, we feel Indians.Vodafone has experienced fall-out in Japan in 2005. It released Converged-Handset mobile phones in December 2005 in 13 countries concurrently, including Japan. Being, one of the wo rlds largest global companies, it did so without pickings into account the domesticated environment of each country. In this way they incurred great loss in both, number ofsubscribers and profits. The company lost 200,000 subscribers in the first few months of the division and profits declined by 15.4 percent (Fackler & Belson, 2005). Customers also got many troubles like inadequacy of functions, the expensive bills and bad signals. Thus it failed to introduce same technologies in different countries. In order to regain its position in the market, they offered such services which are being provided by their competitors such as low prices, monotone monthly bills for calls and emails. Hence market competition forced Vodafone to survive in the market by competing with the same products at same rates as its competitors are offering.Due to globalization, consumer became more aware of their decisions. They take their decisions by taking into account their ethical and environmental con cerns. This new dimension poses pressure on industries to improve their business through new public initiatives and laws. Likewise, increased global competition put serious pressure on Vodafone to evaluate its CSR policy and ethical stance.When globalization reached its pace and mergers and acquisitions among firms take place, multinational companies get authority to hire and fire their workers (Carlson, 2002). This was happened in Motorola, when they fired their 3000 workers on 2000 by end down their plant in Scotland. Similarly, in 2009, Vodafone restructured its business model, in order to save costs and to accommodate more customers-facing roles. Around 400 workers were do jobless from its headquarters or being deployed to some other places. Hence, it is being proven everyplace the years that in large multinational organizations, large number of workers have been made jobless, thus, creating a sense of insecurity among workers. victorious into account the fact that globaliz ation may also have ominous impact on workers The European Globalization Adjustment Fund (EGF) has been established. The EGF aimed to fend for redundant workers, mainly in the areas where globalization has adversely affected the workers. The European Globalization Adjustment Fund has been established under Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006. It has an annual budget of EUR five hundred million to assist worker for their employment.EVALUATION AND CONCLUSIONThe growing integration of the economies has been a heated debate all around the world over the last two decades. The consequences of globalization and its various dimensions have been widely debated and examined by academics, politicians, policymakers, and even the private sector. According to the United Nations growing Program, Human Development Report, 1999 Globalization is shaping a new era of interaction among economies and people. It is increase the interaction be tween people across national boundaries, in economy, technology, in culture and in governance. But it is also splitting production processes, jade markets, political entities and societies. So, while globalization has positive and dynamic aspects, it has also negative, disruptive, marginalizing aspects. Critics of globalization argue that globalization is detrimental to economic growth, such as it increases income inequality among nations, economic instability may arise, workers are being exploited and governments become unable to raise taxes, on the other hand, the advocates of globalization are of the view that it brings higher rate of sustainable economic growth and improved living standards. In a study from the Centre of Economic Policy query by European Policy Advisors, while analyzing the economic impact of globalization, it was prepare that the true benefits of globalization overweigh the costs associated with it. Similarly globalization has been affecting the telecommunic ation sector too. Due to increasing globalization, the telecommunication policy all around the world has widened their cross-border implications as compared to the past. According to the analysis of (Siochru, 2004), media and telecommunication sectors are the leading sectors in facilitating globalization. The globalization of financial transactions and manufacturing products is due to globalization of media and telecommunication sectors.REFERENCES1.Carlson, B. A., 2002. Job Losses, Multinational and Globalization The Anatomy of Disempowerment. Santiago United Nations Publications. 2.Fackler, M. & Belson, K., 2005. A Major Backfire in Japan Deflates Vodafones One-Size-Fits-All Strategy. Online Available at