Global Managerial Economics Essay Example | Topics and Well Written Essays - 500 words - 2

Global Managerial Economics - Essay Example The increase in the economic activity becomes an opportunity for workers because of the increase in the demand of a new integrated global market as well as the dynamism of the flow of capital. When a company goes global in its business strategy, for instance, it could invest in an overseas country to take advantage of the cheap labor, hence, generating jobs for the work force in that particular locale. This is especially helpful for workers in the Third World countries which lack financial capital to support enterprise that would lead to employment opportunities. Ideally, it is hoped that the growth generated by these trade breakthroughs would close the income gap of workers in developing and industrial countries. On the other hand, the current trend in international trade becomes disadvantageous to workers when the increase in competition among enterprises causes local firms to fold-up, leaving a trail of unemployed or underpaid workers behind. The entry of multinational companies in a particular market - with the advantage of its resources - swallow small and medium sized companies in mergers or drive them out of business because it could afford to lower its products prices. We see the most adverse impact of globalization in the agriculture industry of smaller countries and those whose governments are barred to subsidize their industries. 1 Another disadvantage, which is technically not a consequence of globalization per se but the lack of state policies and regulation on this new economic phenomenon, is the bad labor standards of the multinational companies. The current international trading system follows the trade liberalization and deregulation terms dictated by the World Trade Organization. There are already several milestones achieved by the world body mainly in the lowering of tariffs as well as in the cooperation of its member-states in legislating policies in line with deregulation. However, one of the most serious challenges in achieving the