SCHOOL NAME

SENIOR HIGH SCHOOL

First Semester S.Y. 2020-2021

MODULE 4
PHILIPPINE POLITICS AND
GOVERNANCE

Name: _______________________________ Date :__________

Grade/Section: ________________________ Week
:__________
Track/Strand: _________________________
Lesson 4 GLOBALIZATION

WHAT IS THIS ALL ABOUT?

The phenomenon of globalization began in a primitive form when humans first

settled into different areas of the world. However, it has shown a rather steady and rapid
progress in recent times and has become an international dynamic which, due to
technological advancements, has increased in speed and scale, so that countries in all five
continents have been affected and engaged.

In this lesson, you will know the role of nation and state in globalization. This lesson
will also help you understand the relationship among nation and state in the concept of
globalization.

WHAT DO YOU EXPECT TO LEARN?

Content Standard:
 The learners demonstrate an understanding of politics and political
science, governance, political ideologies, power, states, nations, and
globalization.

Performance Standard:
 The learners clearly identify a specific political phenomenon and how
it can be studied.

Objectives:
After the lesson, the learners should be able to:
1. define globalization;
2. identify the objectives and components of globalization;
3. determine the beneficial and harmful effects of globalization; and
4. analyze the relationship among nations and state in the concept of globalization.

PRELIMINARY ACTIVITY
 What comes in your mind when you hear the word Globalization? Use the bubble
map below to write your answers.

WHAT IS GLOBALIZATION?

Globalization is defined as a process that, based on international strategies, aims to

expand business operations on a worldwide level, and was precipitated by the facilitation of global
communications due to technological advancements, and socioeconomic, political and environmental
developments.

Moreover, globalization is the process whereby systems expand from being regional
or national to encompass the entire planet. This is a broad trend that has been underway for
centuries. The following are common examples of globalization.

(1) Trade

The exchange of goods and services between nations. Trade is a feature of ancient
societies that has expanded due to improvements in transportation, political stability and
cooperation.

(2) Immigration

The ability to live, work or go to school in a place other than the place where you
happened to be born. Immigration is a pervasive feature of history that is nothing new.

(3) Travel
 The ability to travel and experience other places and cultures.

(4) Communication

International systems of communication began with mail services that were

impressively global by the late 19th century. Telephone services were more or less global by
the early 20th century. This made the world feel like a smaller place as you could instantly
talk to anyone anywhere in real time.

(5) Transportation

International systems of transportation such as shipping and air travel.

(6) Knowledge

Knowledge has always spread from country to country with word of mouth and
written texts. This occurs almost instantly now due to the internet.

(7) Media & Entertainment

Media and entertainment such as movies and magazines are commonly distributed
in multiple countries.

(8) Culture

Cultures have always influenced each other due to the spread of knowledge and
people. This process is accelerated in the modern age. Culture can exist at many levels such
as a nation, region, city, neighborhood, subculture or super culture. It is also possible that a
global culture will emerge. Culture by its nature does not change quickly and can vary
greatly even within one nation. As such, global culture would likely complement national
cultures as opposed to replacing them.

(9) Law

Legal agreements between nations such as trade agreements or environmental

regulations. Modern globalization is associated with multilateral agreements whereby many
countries agree to a single agreement as opposed to a complex web of bilateral agreements
between nation and nation.

(10) Environment

The planet has common resources. In theory, these can be completely used up or
destroyed by a single nation. As such, international cooperation and law is seen as a hope
for avoiding declines in quality of life due to environmental mismanagement.
Unfortunately, globalization has a bad track record of allowing firms to shift production to
nations with low environmental standards in order to avoid local regulations.

(11) Human Rights

Without trade, the international community has less leverage over issues such as
human rights within the borders of a nation. Trade sanctions are commonly used to respond
to human rights issues. Immigration of refugees is another capability of globalization that
allows nations to aid those who face inhumane treatment.
(12) Political Stability

Forums for resolving international disputes and establishing international

cooperation.

(13) Capital

Integrated banking systems allow capital to flow over borders. For example, a retiree
in Spain who can instantly buy and sell stocks in an Australian company.

(14) Science

International programs of science such as joint space programs.

The goal of globalization is to provide organizations a superior competitive position

with lower operating costs, to gain greater numbers of products, services, and consumers.
This approach to competition is gained via diversification of resources, the creation and
development of new investment opportunities by opening up additional markets and
accessing new raw materials and resources. Diversification of resources is a business
strategy that increases the variety of business products and services within various
organizations. Diversification strengthens institutions by lowering organizational risk
factors, spreading interests in different areas, taking advantage of market opportunities, and
acquiring companies both horizontal and vertical in nature.

Industrialized or developed nations are specific countries with a high level of

economic development and meet certain socioeconomic criteria based on economic theory,
such as gross domestic product (GDP), industrialization and human development index
(HDI) as defined by the International Monetary Fund (IMF), the United Nations (UN) and
the World Trade Organization (WTO). Using these definitions, some industrialized
countries are: United Kingdom, Belgium, Denmark, Finland, France, Germany, Japan,
Luxembourg, Norway, Sweden, Switzerland, and the United States.

COMPONENTS OF GLOBALIZATION

The components of globalization include GDP, industrialization and the Human

Development Index (HDI). The GDP is the market value of all finished goods and services
produced within a country's borders in a year and serves as a measure of a country's overall
economic output. Industrialization is a process which, driven by technological innovation,
effectuates social change and economic development by transforming a country into a
modernized industrial, or developed nation. The Human Development Index comprises
three components: a country's population's life expectancy, knowledge and education
measured by the adult literacy, and income.

The degree to which an organization is globalized and diversified has bearing on the
strategies that it uses to pursue greater development and investment opportunities.

THE ECONOMIC IMPACT ON DEVELOPED NATIONS

Globalization compels businesses to adapt to different strategies based on new

ideological trends that try to balance the rights and interests of both the individual and the
community as a whole. This change enables businesses to compete worldwide and also
signifies a dramatic change for business leaders, labor and management by legitimately
accepting the participation of workers and government in developing and implementing
company policies and strategies. Risk reduction via diversification can be accomplished
through company involvement with international financial institutions and partnering with
both local and multinational businesses.

Globalization brings reorganization at the international, national and sub-national

levels. Specifically, it brings the reorganization of production, international trade and the
integration of financial markets. This affects capitalist economic and social relations, via
multilateralism and microeconomic phenomena, such as business competitiveness, at the
global level. The transformation of production systems affects the class structure, the labor
process, the application of technology and the structure and organization of capital.
Globalization is now seen as marginalizing the less educated and low-skilled workers.
Business expansion will no longer automatically imply increased employment. Additionally,
it can cause a high remuneration of capital, due to its higher mobility compared to labor.

The phenomenon seems to be driven by three major forces: the globalization of all
product and financial markets, technology, and deregulation. Globalization of product and
financial markets refers to an increased economic integration in specialization and
economies of scale, which will result in greater trade in financial services through both
capital flows and cross-border entry activity. The technology factor, specifically
telecommunication and information availability, has facilitated remote delivery and
provided new access and distribution channels, while revamping industrial structures for
financial services by allowing entry of non-bank entities, such as telecoms and utilities.

Deregulation pertains to the liberalization of capital account and financial services in

products, markets, and geographic locations. It integrates banks by offering a broad array of
services, allows entry of new providers, and increases multinational presence in many
markets and more cross-border activities.

In a global economy, power is the ability of a company to command both tangible

and intangible assets that create customer loyalty, regardless of location. Independent of size
or geographic location, a company can meet global standards and tap into global networks,
thrive and act as a world-class thinker, maker, and trader, by using its greatest assets: its
concepts, competence, and connections.

BENEFICIAL EFFECTS OF GLOBALIZATION

Some economists have a positive outlook regarding the net effects of globalization
on economic growth. These effects have been analyzed over the years by several studies
attempting to measure the impact of globalization on various nations' economies using
variables such as trade, capital flows, and their openness, GDP per capita, foreign direct
investment (FDI) and more. These studies examined the effects of several components of
globalization on growth using time-series cross-sectional data on trade, FDI and portfolio
investment. Although they provide an analysis of individual components of globalization on
economic growth, some of the results are inconclusive or even contradictory. However,
overall, the findings of those studies seem to be supportive of the economists' positive
position, instead of the one held by the public and non-economist view.

Trade among nations via the use of comparative advantage promotes growth, which
is attributed to a strong correlation between the openness to trade flows and the effect on
economic growth and economic performance. Additionally, there is a strong positive
relation between capital flows and their impact on economic growth.

Foreign Direct Investment's impact on economic growth has had a positive growth
effect in wealthy countries and an increase in trade and FDI, resulting in higher growth
rates. Empirical research examining the effects of several components of globalization on
growth, using time series and cross-sectional data on trade, FDI and portfolio investment,
found that a country tends to have a lower degree of globalization if it generates higher
revenues from trade taxes. Further evidence indicates that there is a positive growth-effect in
countries that are sufficiently rich, as are most of the developed nations.

The World Bank reports that integration with global capital markets can lead to
disastrous effects, without sound domestic financial systems in place. One of the potential
benefits of globalization is to provide opportunities for reducing macroeconomic volatility
on output and consumption via diversification of risk.

HARMFUL EFFECTS OF GLOBALIZATION

Non-economists and the wide public expect the costs associated with globalization to
outweigh the benefits, especially in the short-run. Less wealthy countries from those among
the industrialized nations may not have the same highly-accentuated beneficial effect from
globalization as more wealthy countries, measured by GDP per capita, etc. Although free
trade increases opportunities for international trade, it also increases the risk of failure for
smaller companies that cannot compete globally. Additionally, free trade may drive up
production and labor costs, including higher wages for a more skilled workforce, which
again can lead to outsourcing jobs from countries with higher wages.

Domestic industries in some countries may be endangered due to comparative or

absolute advantage of other countries in specific industries. Another possible danger and
harmful effect is the overuse and abuse of natural resources to meet new higher demands in
the production of goods.

One of the major potential benefits of globalization is to provide

opportunities for reducing macroeconomic volatility on output and
consumption via diversification of risk. The overall evidence of the
globalization effect on macroeconomic volatility of output indicates that
although direct effects are ambiguous in theoretical models, financial
integration helps in a nation's production base diversification, and leads
to an increase in specialization of production.
However, the specialization of production, based on the concept of
comparative advantage, can also lead to higher volatility in specific
 successful companies, independent of size, will be the ones that are part
of the global economy.

ASSESSMENT

What do you think the picture about globalization trying to imply? Write
your answers in not less than 5 sentences on the line provided below.

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TEACHER’S FEEDBACK

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REFERENCES

Francisco, P. & Francisco, V. (2016). Philippine Politics and Governance for Senior High
School. Mindshappers Co., Inc., Intamuros, Manila.
Pologeorgis, N. (2019). How Globalization Affects Developed Countries. Retrieved from
https://www.investopedia.com/articles/economics/10/globalization-developed-
countries.asp

Spacey, J. (2018). 14 Examples of Globalization. Retrieved from

https://simplicable.com/new/globalization-examples