Globalization in Malaysia: Advantages and Disadvantages

Globalization in Malaysia Advant get alongs and DisadvantagesThe term globalisation has umpteen brain from different people. Hill, (2005) as cited in Stuart, et al (2010), menti unitaryd it refers most countries would shift toward a more than integrated and inter hooklike world economy by the group meeting of historically and separated national merchandises into one huge global grocery place. Gavin C(2009)stated that it had replace those economic expressions such asinternationalization and transnationalism. Sadegh B.,et al,(2006) citied as Cheng (2000), mentioned that nowadays of people feature great opportunity to learn from new(prenominal) countries. The globalisation could be headmaster grow that main driver key is there exiting many of preferences and the shoot of consumers from the general (Pierre,D., 2006).Catherine ,D(2005) agreed that it could be reach an unexpected phenomena with high engine room , advance communication and free trade mart. 124The reach of glob alization has recreate conquest of business to in the buff level, where many countries eat up been go through with(predicate) it(EconomyWatch.,nd). In research establish on Economy Watch squad that demonstrate the globalization has suffer forward on each pains and mean go it has destroy just ab step up of industry where its rout out non survival though the impact of globalization. Their research have shown the fiscal industry could gain more do near after the emergence of pecuniary markets on global quite than topical anaesthetic market, and be more efficient entrance the pay facility at early(a) countries. With the free trade principle exercises on world coarse, it has result in boost up the finance flow. Economy of country leave all overly increase whereas gain more business trade and localisement from alien investments, which has mentioned by Adam Smith, as cited in Ferraro (1998). 132What are advantages and disadvantages of globalization?In badly , glob alization has give advantage to company such as opportunity of develop new market for consumers have more edition choose the best quality product. It also provides educated understanding amidst different nationalities(bangkoklogistics,n.d.). Besides, companies rump outsourcing their go bad of project that reduce quantify, uncertain factors and give off product. They dissolve find more pro check up on base on manufacturing rather than charge high outlay on consumer. Thus, they offer reasonably price for attach different type of consumer with total quality. Government has load-bearing(a) MNE invest directly on country that reduces unemployment by new investment and industrial ventures.(bangkoklogistics,n.d.)Disadvantages of globalisationGenerally, for interior(prenominal) supplies have to compete with international suppliers that lose the warring advantage even fight with price. Thus, there would a lot of extend and threat of new type of colonization comes with much power and gold from remote player. Meanwhile, with the outsourcing concept, there would be increase jobless that is running(a) kernel class in developed country such as U.S(bangkoklogistics,n.d.).Among many companies have success in monetary industrial though globalization, one of company can be more precise explain how repartee on impact of globalization and create new answer at nowadays which is Hong Kong and Shangai Banking Corporate holding plc(HSBC holding plc)The case study liberate why HSBC is MNE before history.Hong Kong and Shangai Bank Cooperate is one of examples success go though globalisations ready in financial industry. Thomas Sutherland was founder the HSBC while he was working in the Peninsular and Oriental Steam glide Companyhistory. He found that financial service management has huge solicit in Hong Kong and china so that he and his group opened imprecate and put togethered the HSBC in March 1865 at Hong Kong and Shangai. Chuan Li (n.d) stated that the c onception Bank operates the finance on world abundant however their goods, service were non satisfied, and inefficiency to local market need. Whereas, the World Bank unable afforded heavy debt and precede to a harsh economic imbalances. 111By this lesson, Thomas had adopted the union venture concept to operate business at different fixing(annual address). Thus, HSBC can reduce the uncertain from internal and begin a good kin at local citizen and brass. 35Management of HSBCHSBC used the ethnocentric approach that rise up-to-do communication between parent and subsidiary company at proto(prenominal) stage. After subsidiary company has stableness, then management structured can applied the polycentric method that efficiently and at short term to fit in the cultural and semipolitical of that country. With these approaches, HSBC has good start the step in their vision, which is the world local bank. It reminds people who want due to finance connect with international and loc al that HSBC get out be their first optional. Besides, HSBC also purchased those companies who im raisee area on financial field that can reduce make uping, and lessening the uncertain risks.Nowadays of HSBC is one of the biggest banking and Service Company in worldwide and headquarter allocated at capital of the United Kingdom. To reflect their vision, it has not ignored power of international engagement which has 8,000 properties in 88 countries and territories have include Europe Hong Kong Rest of Asia-Pacific the warmness east North America and Latin America.(annual report 2009)116 With listings on the London, Hong Kong, naked York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by over 220,000 shareholders in 121 countries and territories. According to annual report 2009, HSBC has good maintained performance and well management convinced to shareholders during downturn periods. Because all shares are trading on the New York Stock Exchange in the form of American Depositary Shares(annual report2009).142 productTo fulfill consumers common need and differential preference, HSBC offer a wide range of doing and diverse into four categories such as individual(prenominal) Financial Services (including consumer finance), Commercial Banking, Global Banking and Markets, and Private Banking.Need shown how effect to world.CategoriesPersonal financial workCommercial bankingGlobal banking and marketsPrivate banking*I willing focus these three ,suit title need clear soft gopal.Impact of globalisation to HSBC summaryLead Emerging market ,HSBC has gain delicate of results through emerging markets on past few years. HSBC has good steer on those potential countries, which would boost up the economic, after change the political and other direct factors. The brand of HSBC was not being easily for entered at strange market because education of consumers was so weak at primordial century. HSBC have to send a respective for understanding o n actual situation and reaction on it. Thus, HSBC provided training at local citizen to wee up local teams that enable reduce conflicts and create more jobs which is will accepted by their authorities. With a good relationship of government, HSBC has assertion gained good result and do further plan in future.Internet ageArrive on Internet Age, HSBC has adopted IT concept, which applied on their branches. Consumers were not willing accepted the changed at begin period because the network run have not mature yet and unconvinced to consumers. For generation X, they were no confidence with unphysical of documentations and lower of education. However, generation Y has willing be learns new things and can adopt this new phenomenon. HSBC required all stuff be patetion and polite handle this type of consumers.Financial crisesHSBC has well management and be aware of worse on US shares before financial crises. Subsiders of HSBC companies have not totally full influence from financial cri ses especially Malaysia, and other Asian countries. Top management of HSBC believed that not all eggs should put in one basket. They have large resource to support those other countries, which has be damaged during downturn. They also willing lend their hand to inspection and repair on those companies had worst impact with limited resource.Reason why did they success on these issues?Solution those arise from Lead emerging market issues lines time scales, burden cost, risk on purchased company, failure response from consumers, will production enable suit to consumer need ,WTO issues,Globalization and market ?the forces of globalization would establish global market for standardised product purchased in huge volumes by consumers worldwide ot .while global market do indeed exist for some standardized product only where little product differentiation is workable or wanted by users, with other product and work vary international tastes and preference mean that product differentiatio ns vital to appeal to local markets.HSBC research team found that success in emerging market has need good timing and more information collection to consecrate precise decision. With new tools of communication, HSBC can easily communicate to other location in efficiency that reduced costing on research, failure response based on customers. To avoid conflicts and risk, they had designed production in wide range that from common characters for general need of consumers until local differential preference. thaw trade, less regulation international ,Solution those from Internet AgeProblem instability network services, afraid on new technology (ATM), recognition of consumer ,Globalisation and production ? however it may not only be the cost based advantages of alternative production location which might principal to such outsourcing but possibly less tangible factor ,HSBC believed the earnings banking will became world trend by following improved the stability network services and evolution of technological. They has outsourcing the machine of auto transfer specie where can launch on public in early that it will be competitive advantages. This new pattern of business transaction will increase perception of consumers toward HSBC in developed countries, but it seems need more time for ontogenesis countries citizen to adopted the change.Solution those from financial crisesProblem confidence consumer toward HSBC , dropped expenditure suddenly, cash inefficient,Globalization and the role of the nation state? dismission of competenceThe impacts of financial crises have serious damaged on economic, government policy taken action for decrease influence on people. Thus, finance industrial suddenly shortage of capital, cash inefficient and withdrawn out huge amount of cash by customers. Fortunately, HSBC has well prepaid enough resource to handle this situation and still borrow out capital as usual that it can proofing HSBC has capability go through this nook .Foot notes1 0 = very high, 10 = very low microbe The IMD World Competitiveness Yearbook, 2010, Switzerland, www.imd.ch/wcy.According to Business in Sydeny and NSW (2010), third bedded fallen on Australia that shown has a lower risk and uncertain on political. Thus, mostly investors invest on Australia where safe and stable political manikin is.United stateUnited Kingdom has very little on political risk because of the efficiency on the Westminster system whereby adopted by Australia government (Business in Sydeny and NSW, 2010). During recession, the government of UK has applied some incentive solution even though changed loosening monetary policy to tightening fiscal policy that grape those attention of public finances (AMB outlandish luck Report, 2010c).MalaysiaMalaysia graded on 13th that has moderate of political risk (Business in Sydeny and NSW, 2010). Malaysia has three major groups of people likes Malay, Chinese and India who are living in peaceful and understanding on each culture(Malaysia truly Asia,2009) .They also working together handle problems that avoid happen serious conflict against on May 1969.The national front consists of UMNO is the Malaysia government which included others races parties as MCA (Malaysian Chinese Association) and MIC (Malaysian Indian Congress) are collaborating for peaceful civilization(Malaysia truly Asia,2009). However, according to AMB research (2010b), found that the government is slowly applying inventiveness which citizen enable accept public weightlift in more transparency, less subsidies and involvement from government. Besides, government also has encouraging foreign invest in economic sectors (Malaysia truly Asia, 2009). Thus, Malaysian can be achieving the dream of being develop country on 2020. revenue policy company has paid 28% of tax per yearly unwavering structure protection employees under Employment Act 1995( stable and good frame structure and can complain labor office http//www.pesaraonline.net/eat utorial.htm)industrial Relations Act 1967 (major manufacturing law) http//www.pesaraonline.net/ir-guides.htmTrade unions act 1959 (major shareholder and director law) http//www.pesaraonline.net/tua-guide.htmChinaChina has a high risk of political even ranked after United Kingdom, because it has strongly stability of government and social based on summary A.M.Best Company(2010a).In report mentioned that government look for balance toward communist exchange with the capitalist- style economic center where can cooperate East industrial. China is a large and huge of population, but considers as developing country with terms of down-to-earth domestic product ( vernacular domestic product), infrastructure, and others (A.M.Best Company, 2010a). If advance of industrial reserve on expand, it will increase unemployment rate that become useless toward gross domestic product. The government has majority power to control it that avoid happen.According table 1.a gross domestic product, GDP g rowth, inflation the growth of GDP has stable increase because consumer spending more actively on these few years . Then, average out of inflation is moderate. The GDP has boost up over than 200 billion which means average of business were doing well. The government has increased inflation rates during high measure of GDP, but it has decrease rate during turn down that increased consumer spending.industrial sectors, agriculture, industry, services Industrial sector has growth up after but it seems slow down before year 2008.the emerging market has bring benefit to industrial such as lower labour cost ,but them faced many competitors form worldwide.Exprorts and important of good and serives the exporting persona has lower than import percentage that business loss some implicit advantages,Gross capital ,revenue , cash surplus or deficit the gross capital allocated average 17% and 18%. The revenue percentage of GDP has reach more than 35% frugal danger Very diminished The Unit ed Kingdom (UK) has the second largest economy in Europe can Germany. Service industries represent three quarters of economic production, particularly financial servicesand real estate activities. London is a global financial center and businesses there account for nearly half of the countrys financial services industry. While positive economic growth has resumed in 2010, the Bank of England is unlikely to raise refer rates until late 2011 at the earliest.United Kingdom has very low in economic risk by report ABM. One of biggest industrial that service can diverse into production, finance services and real seFinancial System jeopardize Very emit The Financial Services Authority (FSA) regulates the UK financial services industries, including insurance. The UK is widely seen as a major center for international insurance and reinsurance and is home to the London Market, a wholesale market that writes risk around the world. Lloyds of London accounts for over half of the business o n the London Market.Financial System Risk Low The insurance industry in Malaysia is regulate by the central bank, Bank Negara Malaysia. The Malaysian government continues to support the takaful and retakaful sectors as part of its scheme to make the country a global hub for Islamic financial servicesSource IMF and A.M. BestEconomic Risk Moderate At independence, in the 1960s, the Malaysian economy depended upon rubber and tin. Since then, the economy has transformed to become a regional manufacturing center, services provider and offshore financial center. The government encourages foreign investment but maintains approval rights for individual investments, often opting to restrict foreign equity or encouraging the transfer of technology from foreign firms.Economic Risk Low China, the worlds most populous country, is home to the worlds third largest economy. rapid growth rates are driven by a strong export sector, state expenditures, construction and infrastructure development. Th e government was able to resolve to global economic downturn by launching stimulus programs, which brought a strong recovery in 2010. Expansionary policies have resulted in massive increases in bank lending, stimulating the economy but bringing rise to fears of increases in non-performing loans.Financial System Risk Moderate The insurance industry is regulated by the Chinese Insurance Regulatory Commission (CIRC). China is part liberalizing its financial sector, which is a long and drawn out process but essential for the long-term sustainability of the economy. The Insurance Law was amended in 2009 to farm regulation in core areas such as the strength of the supervisory authority and solvency and investment guidelines.Regional Summary western sandwich Europe westward Europe is a highly developed and affluent region. The European pairing (EU) is an economic and political union of 27 countries that accounts for 30% of world gross domestic product (GDP). The EU is facilitating a single European market with standardized regulatory systems and free movement of people, goods, services and capital. The euro-zone is made up of the 16 EU members that have adopted the euro as their currency. Most, if not all, of Western Europe has been experiencing a severe economic slowdown and several countries hold on in recession. While the European Central Bank has cut interest rates tospur demand, economic growth in the region has been generally modest.Regional Summary Southeast Asia Southeast Asia is a critical part of the world trading system and while the regions economies remain somewhat dependent on agriculture, manufacturing and services have been the engine for growth. The region has been remarkably springy to the global economic slowdown.While regionally growth slowed as the economies of their large trading partners (notably the U.S. and Europe) went through recession, the slowdown was in most cases moderate and the recovery in 2010 has been very strong.Regional Sum mary Eastern Asia Eastern Asia is home to some of the worlds largest and most advanced economies. China and Japan are some(prenominal) in the worlds top five countries measured by gross domestic product (GDP). In the aftermath of the Southeast Asian financial crisis in the late 1990s, much of the region underwent a restructuring of traditional economic and financial practices to match international best practices in regulation. The region as a whole weathered the global financial crisis well, with local demand provide by government stimulus helping to maintain positive economic growth.ReferenceBusiness in Sydeny and NSW ,2010. Political stability. OnlineAvailable at Accessed 14 November 2010.A.M.Best Company, 2010a. AMB Country Risk Report, China. Online (Updated 29 October 2010) Available at Accessed 16 November 2010.A.M.Best Company, 2010b. AMB Country Risk Report, Malaysia. Online (Updated 29 October 2010)Available at Accessed 18 November 2010.A.M.Best Company, 2010c. AMB C ountry Risk Report, United Kingdom. Online (Updated 29 October 2010) Available at Accessed 16 November 2010.Malaysia Truly Asia ,2009. Political stability. Online Available atAccessed 15 October 2010.Conclusions RecommendationsSummarise your findings from parts 1,2 and 3. Outline a future dodging that would face up to your most important findings.Part 1 ground tag 20%, 600 wordsPart 2 Theoretical simulation Marks 20%, 600-800 wordsPart 3 Analysis cover of theory to evidence Marks 30%, 900-1100 wordsPart 4 Conclusions Recommendations Marks 20%, 600 wordsPart 5 Referencing , Bibliography , Presentation Marks 10%, not in word countSummary