Shift towards Privatization
Discuss about the Globalization and Its Effect on Governance.
Over the years, globalization has been one of the major topics of discussion in the business sphere. Technological advancement and technological advancement are co-related. Rather it will be very right to assert that globalization is mostly depended on the aspect of technological advancement. In today’s world, the government bodies are opting for decentralization in order to transfer the power. In other words government hands its power to the privately owned companies (Baer 2012). This approach is completely opposite to the approach of nationalization. It is has been argued over the years that a vacuum has been originated due to globalization. The reason behind this vacuum is that globalization has shifted the power to private corporations.
However, this argument is true to quite an extent. The technological advancement can be considered as the one of the main reason that most of the government bodies prefer to decentralize the power over private entities (Kobrin 2008). Thus the main purpose of the study is to identify the whether the above mentioned statement which has been discussed over the years. Additionally, the study reflects on the fact that whether more robust international governmental entities are required to control business activities or not. The entire discussion is based on the technological advancement as to how the technological advances are encouraging the globalization which has created a vacuum in the governance (Chang 2003).
Owing to the bliss of globalization, countries are now more concentrated (Brown, Hesketh and Wiliams 2003). Since a country or a state is bet driven by its financial structure, gigantic or mimetic, governments and its structure somewhere down the line loses its hold on a state. According to the belief of hyper globalists, with the advent of globalization, a particular state is more superfluous now than before and the scenario is same in almost all the parts of the world (Aggarwal 2011). Delving deep into the history of state creation, at the very initial, state was constructed on the basis of the Westphalian model which projected the state has held the highest power an authority over its subjects. According to the model, the state also was the decision maker and the ruler of its subjects.
However, globalization and related aspects had a huge impact on state and its policies. Either for the strong or for the weak states, economic dependency matters a lot. In case of weak stat, the government is undoubtedly weak and the state thus is ruled by the external factors (Böhme et al. 2004). The state, in this case, has to depend upon open market for its sustenance since the government is incapable to earn revenue from a weak state. Even in the case of a strong state, the gigantic businesspersons of the state control most of the economy (Yao 2004). The major part f the revenue of the state is earned from the business. Apart from that, the global businesses help states even more in the economic context. The inflation rates of a state, the rates of deflation, the number of employed statesmen and the unemployed is all controlled by the company owners (Young et al 2008). These business giants are the main employee producers of state.
Technological Innovations and Globalization
Apart from the financial control, there is also a wide array of grip that state is slowly losing from. One of the prime controls other than financial control that is the state is losing is the decision of trading into nuclear weapons (Bortolotti and Perotti 2007). Again in this context, it is worthy to mention that since the manufacture, designing or en the proposal demo of nuclear weapons incur huge costs, the state has to depend upon gigantic business empowers to sponsor it (Pivovarsky 2001). In this era of neo-liberal globalization, nation or state has very less to control or assert upon its subjects. Without any iota of doubt, it is almost self-assertive that the ability of national or state government is limited in case of pursuing an agenda (Coskuntuncel 2018). Almost all the parameters are controlled by the organizational structure of the global businesses. Without making any clear declaration, it controls the state, the lifestyle of its people etc. The characteristic features that a state is known by, if analyzed articulately will lead to the same conclusion again (Newberry 2002). For example, it is because of the marketing and business that the GDP rate of a particular nation or a state inflates or deflates. On the other hand, business also marks a country or state’s employment rate, its standard of living and a lot more (Pierre 2000).
Technological advancement is one of the major reason for which globalization is rapidly being adopted in the past few years. In the sector of communication and information technology, technological advancement has reduced the overall cost of business while making the business operation smoother than earlier (Kenwood and Lougheed 2002). The one of the major improvement occurred was that is the ease that the technological advancement has brought for the overseas business. As a result, business personnel can monitor and operate a business without travelling the remote centers (Fujita and Hu 2001). Thus it can be said that technological advancement has broadened the path of globalization. Affectivity and efficiency have been increased grossly in the business sphere due to the advancement of technology. Apart from an increase in efficiency and effectiveness, due to technological advancement business are becoming more environment-friendly which is one of the main reason that government entities are making way towards privatization. The industries are coming close to each other while assisting in the rise of globalization.
The technological in the area of communication and technology has brought the revolutionary change in business. The technology of cloud computing therefore in this regard deserves mention through which the business operation has become easier than earlier (Buyya et al. 2009). Through cloud computing employees can even work from their home as well as the business heads can monitor the operations (Armbrust et al. 2010). It must be mentioned that the cloud computing is completely based on internet. Thus above all internet is the main driver of globalization. As part of globalization, the government entities are embarking on the process of privatization regardless of area. In one word, it can be said that globalization is the medium through which the worldwide market becomes integrated and technology is a major driver of the integration. Some of the technological innovation that changed the scenario of global business has been discussed below.
Impact of Communication Technology on Business
The technological innovations not only brought changes but it had a significant effect on economic structure across the globe. Integrated information technologies enabled the communication among business sphere much stronger and effective. The entire world of the business has become interconnected as the globalization took place. The rapid speed of innovation pushed globalization a step ahead with as it had encouraged privatization or decentralization (Chen, Chiang and Storey 2012). With the technological innovations, the business world has become connected. In order to do monitor overseas business, business heads no more need to travel to the overseas centers. Rather they can monitor and control the operations through the modern technologies. For the better communication, all centers of a business are now connected with each other over technology, to be very specific, through internet-based software. Many modern technologies like artificial intelligence, cloud computing, BYOD, big data, audiovisual technology, campus technology, data analytics, internet of things (IOT), gamification and so on are the contributions of technological innovations that even triggered the process of privatization (Hashem et al.2015).
Through privatization, the state decentralizes its control to the private entities so that the economy of the country can be enriched with more production. However, in this regard, it needs to be mentioned that with the shifting the control, the government bodies also lose the power of governance (Ugaz 2003). Generally, government bodies due to having less financial resources, find it challenging while running entities which is the main reason that privatization came into use. The second major impact influence is the technology. Private entities due to having greater provision of use of technology, they operate the business better and more effectively (Birdsall and Nellis 2003). As mentioned earlier, technology is the key driver of globalization; it must deserve mention that technology is also the key driver of privatization.
With the technological advancement, the world became smaller. In this regard technological advancement and the use of social media sites deserve mention. It is no more undiscovered that technological advancement has given a new dimension in marketing and communication sphere (Newberry 2002). By adopting social media-based marketing strategies, businesses have become enabling to reach out to a maximum number of customers within minimum time. To define social media-based marketing, it can be said the social media marketing is the way of marketing that involves the publishing promotional contents over social networking site. The purpose is mainly to promote services or products while building a direct contact with the customers (Cashore 2002). Using the modern internet-based technology, content sharing, video sharing, and image sharing and so on.
Effective and Comfortable way of marketing
Social media marketing is considered to be the most effective as well as the most comfortable way of marketing. As compared to the traditional media marketing, the simpler yet modern technology is used in this approach. In terms of customer relationship, social media marketing allows its customers to give direct feedback. It is needless to say that most people prefer the brand to which they are loyal to be solving their queries within minimum time (Kofman and Youngs 2008). Now the question can be raised regarding customer service. Every company in today’s world build its own customer service department in order to interact with their customers. Customers can interact with the customer service agent to resolve any queries or to give any feedback to the product or the service. However the process of contacting the customer care serve ice to post any queries involves complex process while on social media sites, customers can easily make their comments without any hassle. Thus it can be said that the modern technology of social media marketing is actually very useful for business.
The above mentioned are the reasons why privatization is being rapidly increased day by day. The implementation of the modern technology is nearly impossible in case of government-run enterprises (Savas and Savas 2000). It is not only that state comes ahead for decentralization, the private entities too addressing the issue, join their hands with the state in order to strengthen the global economy (Megginson and Netter 2001). While discussing the privatization and decentralization and the technological influence on it, it again needs to be stated that a vacuum of governance has been created especially due to globalization, more specifically due to privatization.
While discussing the need for international governmental bodies in the monitoring the business activities, a brief overview of international government bodies or organization needs to be discussed (Kenwood and Lougheed 2002). The international government bodies are the organizations comprising of member states. Intergovernmental are different from treaties (Pierre 2000). The primary goal of the international government bodies is to monitor the business activities across the world. As the state hands the control to the private entities due to privatization, the international governmental bodies comprising of several states as the members monitor the operations of the business of the private entities (Boehmer and Nordstrom 2008).
These organizations or bodies focus on the development of the global economy. To name, World Trade Organization, International Monetary Fund and so on are some of such organizations that monitor the global business activities (Hoekman and Kostecki 2009). Some economic organizations intend to promote free trade among the countries all over the globe. Such organizations reduce barriers and challenges regarding trade while other organizations like Organization for Economic Co-operation and Development prioritize development of the worldwide economy (Boehmer and Nordstrom 2008). It can be said that in this era of privatization, these international organizations need to be proactive in order to monitor or govern the activities of the enterprises that have privatized.
The vacuum which has been occurred by the privatization can be filled by the governance of the international governing bodies or organization like World Trade Organization, International Monetary Fund, Organization for Economic Co-operation and Development and so on. On one hand, decentralization or privatization is important for the growth the global economy; similarly, on the other hand, the governance or monitoring on these decentralized enterprises is crucial for the sake of a healthy economy across the world. In the recent past, many economic scams have been reported which can be considered as the after effect of lack of governance caused by globalization (Hoekman and Kostecki 2009). In order to prevent such illicit activities, the international governmental organizations or bodies need to be effective more as well as such organizations should be in more numbers to monitor the business activities all over the globe. Thus all the countries around the world need to join their hands for this purpose.
Conclusion
To conclude, it will be apt to assert that globalization has created a vacuum of governance in the business sector primarily through the process o privatization. On one hand, it cannot be denied that privatization has triggered the growth of the not only the economy of one country but it has triggered the entire global economy. The technological innovation is the key driver of this change or the globalization. The technological advancement over time has brought many changes by introducing modern technologies in the business sector which had pushed the government to move ahead for the process of globalization. Some of the technologies which deserve mention as the change maker in the business world are artificial intelligence, cloud computing, BYOD, big data, audiovisual technology, campus technology, data analytics, internet of things (IOT), gamification and so on. Beside of these modern technologies, the innovation of social media marketing is another contribution to the technological advancement which gave a completely different dimension to the business world.
The paper exclusively focuses on the topic of vacuum of governance which is the result of globalization. The study begins the discussion by giving an overview how the vacuum of governance has been created, especially the role of globalization in it. It further precedes the discussion by shedding light on the impact of technology on the globalization. Additionally, the study focused on the aspect of privation which is the direct effect of globalization on business. Finally, the study states the importance of the international governance organization or the bodies, their role in the business and the study concludes by stating that such organizations need to be more in numbers in order to monitor the activities of the business world.
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