The Interplay of Economic Crisis and Globalization

Introduction

Globalization has for the past decades contributed significant shifts in business environments. While globalization plays a crucial role in promoting innovation and efficiencies that favor business competitiveness, it complicates business management. For instance, globalization contributes changes to business environments thus changing the management and organization principles. The changes and their potential complications to business success create the need for the business organization to continue evaluating the business environment to understand the existing parameters and develop coping strategies. For example, experts link the economic crisis to influencing, restricting, and development of economic globalization. Therefore, these pages will focus on evaluating how economic crisis (secular, cyclical, and/or of profitability) contribute to the ongoing shaping, circumscribing, and/or the emergence of economic globalization.

Economic Crisis and Globalization

Experts note that wealthy capitals play a crucial role in enhancing the availability of data that enhances teamwork efficiency in both technical and science disciplines (RaźniakDorocki, & Winiarczyk-Raźniak, 2017). It is also noted that data accessibility promotes high living standards more so for social leaders targeting wealth together with active cultural locations and social interactions. The capitals are households to head offices of global establishments, media outlets, political institutions, together wit developed consumers and producers’ culture (RaźniakDorocki, & Winiarczyk-Raźniak, 2017). The success of urban organizations and businesses creates economic success for the capitals and surroundings through the attraction of skilled talents from overseas. The sourcing of talents from around the globe is equally made possible by the availability of efficient transportation systems such as airports that enhance the processes of globalization.

According to RaźniakDorocki, & Winiarczyk-Raźniak, (2017), large business plays a crucial role in enhancing globalization through the creation of global linkages as well as making capitals global centers. The centers enhance the production of the knowledge-based economy that enhances the globalization process further. Further, the scholars indicate that factors that include capital markets, presence of skilled employees in regard to academic and technical together with facilities of research and development, business support institutions, telecommunications, and information infrastructure, living standards and life quality, cultural and history traditions, as well as economic climate play a crucial role in determining the location of businesses. Nevertheless, even as businesses and organizations thrive in large cities, the global economy continues to struggle with crises relating to uncertainty and volatility.

The world 2008 economic crisis that developed in the United States saw a continuous serious Europe debt crisis which impacted state economies in various ways that showed center ruptures like in Germany, while in Spain and Greece periphery was recorded (Giannakis, & Bruggeman, 2017). According to Giannakis, & Bruggeman, (2017), the rates of unemployment in Greece increased by 20% from 8% to 13% from 2008 to 2013. In Spain, the figures increased to 26% from 11%. However, Germany recorded declines to 5.3% from 7.5%. the scholars note that the negative outcomes of the international economic crisis spread to localities and regions and austerity regulations enforcement increased their susceptibility to external turbulences. The resilience of the nations which the authors describe as the system’s ability to engross disturbance, restructure, and maintain the basic functions, identity, and structure enhance the emergence of globalization after a crisis (Giannakis, & Bruggeman, 2017).

Pillay, (2015) argues that it is now obvious that the world faces sophisticated crisis cases of both increasing uncertainties and liquidity. Different complex active scopes that include political, demographic, institutional, social, economic, development, climatic, religious, geostrategic, cultural, and geopolitical integrate to a global level. Globalization's emergence is linked to the different economic and social flows and interconnections it produces and activities. According to Tuca, (2014) global crisis introduced the concern for evaluating the degree of globalization process as well as the need for increased or reduced globalization. The author notes that during the early crisis years, governments focused on promoting their local interests to the expense of the global ones in a manner that national growths were prioritized than international developments. Such concepts create the question evaluating whether the international crisis contributes to globalization circumscribing or influences the emergence of globalization after the crisis. The united states economic crisis went beyond the financial sector and equally affected social crisis and presented the existing system weaknesses relating to capitalism, religion, and politics.

Theoretical Perspectives of Economic Crisis

Vlados, Deniozos, & Chatzinikolaou, (2018) note that despite the significance of crisis in economics, it has since the Classical political economy been described as an ambiguous and mysterious subject. The term crisis could be defined in two ways as either structural or conjunctural. Experts describe the conjunctural crisis as the situational, occasional, and strange episode that is likely to destabilize the steadiness of matters and facts (Vlados, Deniozos, & Chatzinikolaou, 2018). In a nutshell, it is described as a strange experience likely to be assimilable to the existing system. Further, the crisis is seen as a short-term economic and social edifice that relates to a period of contravention within an else undisrupted customariness (Vlados, Deniozos, & Chatzinikolaou, 2018). In their explanation, the scholars noted that the crisis presents like a provisional fire that would be extinguished and things would return to normalcy. According to the scholars, the specific perspective of the crisis is assumed to show unpredictable and exceptional traits and is normally organized in relation to specific proceedings that could contribute to high threat and uncertainty levels or those perceived as threats in regard to high priority targets of all kind and level organizational goals.

Further, Vlados, Deniozos, & Chatzinikolaou (2018) describe the structural crisis as a more detailed condition seen as an evolutionary essential and more of an organic and irreversible situation that contributes unescapable supporting system changes. The scholars see the crisis as an expected, normal, endogenous, and inevitable and are overcome in a manner that enhances its ability to carry away the known status. After the end of structural crisis, things take a new direction and the previous episodes collapse aiding the replacement of new approaches. According to Vlados, Deniozos, & Chatzinikolaou (2018), the processes describe a situation relates to the permanent end of an existing system and contributing to the unavoidable establishment of another explaining the end of the old and beginning of the new system. Typically, the crisis defines a situation where the permanent changes are replaced with new evolutions of transformed rules through the elimination and formation of classes.

Global Crisis and Emerging Globalization

Authors argue that the world system has now reached a structural crisis that is likely to increase the growing transformations that will show in between two and four decades completely different systems which could be worse or better than the current systems (Vlados, Deniozos, & Chatzinikolaou, 2018). With the emerging globalization, some argue that some strategies consider the hindrances that are redistributed and complicate things and some nations show vigorous involvement in guiding international development. For example, in a situation of economic crisis, it is predicted that trade declines more so for commodities together with cross-border investments which are contributed by forces of isolationist. As a result, new and fast rearrangements tend to reorganize the international supply chains (Vlados, Deniozos, & Chatzinikolaou, 2018). For example, computerization describes some of the new waves appreciated by business environments structurally.

For example, the economic policy appears to be getting more sensitive to the conjunctural and sudden changes that appear to often move to the direction favoring nationalism thus ignoring the element of shared international targets (Vlados, Deniozos, & Chatzinikolaou, 2018). As such, there appears to be developing prospects for inter-state collaboration to utilize institutions in changing and resolving high threats such as those relating to global terrorism, cope with tax blues, and cybercrime around the world. More so, significant diversity measures are incorporated in globalization impacts and free trade given the existence of varying opportunities in different business industries as well as per spatial levels. As such, considering the variances in corruption levels, democratic stability, and local government and public management, sensibility is comprehended when personalized businesses and institutional policies offer varying incentive modernization and development focus. Although the emerging globalization could only be traced towards the millennium and was equally documented after the 2008 economic crisis, it describes the very advanced globalization in regard to technology. Nevertheless, Vlados, Deniozos, & Chatzinikolaou (2018) highlight that the analysis is relatively restricted to mono-thematic theories of exploitation and neo-colonization more so while described the low-economic global regions and ignoring the general supervisory subjects together with structural reforms requirements.

Although the emerging globalization is at times described as regionalization and the sophisticated interaction of concepts relates to mutual convergence and exclusion. According to Vlados, Deniozos, & Chatzinikolaou (2018) global economic integration and globalization are planned in historical cycles that contribute to years of growth and are followed by contraction periods together with regional centralization. Some experts perceive the emerging globalization a period that will be defined by highly unified inventions unlike the previous globalization that related to the increased interconnectedness between local and global markets Vlados, Deniozos, & Chatzinikolaou (2018). The complexity of the system if further increased by service diffusion which complicates the possibilities of distinguishing regionalization and globalization limits.

The economic crisis has existed for decades since the development off currency. Continuously, the economic systems get to levels that initiate sudden declines in asset prices, deflation, high alarms in markets of foreign exchange, and organization bankruptcies that could be either financial or nonfinancial. Experts note that the world recorded about 240 economic crises in different global nations during the last quarter of the 20th century (Hamida, 2018). Even with the emergence of a notable crisis when globalization was taking shape, experts have not been able to associate the crises with globalization. Nevertheless, experts argue that globalization promotes conducive environments for crisis growth as well as impact multiplication, which is largely aided by integration and connectivity aspects of globalization. Muja et al. (2018) argue that the economic crisis could contribute to the stagnation or limitation of globalization which was evident during the 1930s after the Great Depression.

The initial effect of the great depression on globalization was negative. The global financial flows continued to decrease years and the global trade volume contracted completely after the 2008 financial crisis. In a bid to enhance globalization after the financial crisis, nations have resolved to focus on protectionism thus the application of different authorities and tariffs that create the need for regulating natural product consumption. Besides, the challenges that face transitional organizations as a result of the crisis have contributed political reactions that advantage the interests of local state while ignoring the foreign institutions. For example, some organizations render the bank support in exchange for high in-country credits or even partake in industrial restructuring to enhance the shifting of industry closings or cutbacks in the labor force to other nations. The state political impact is common amid transitional organizations and the concept plays a crucial role in the banking sector. Currently, governments are involved in bank capital which within the united states represents more than 75% of capitalization while it represents 40% in Europe prior to the occurrence of a crisis. Further, the national power is supported by different public aid instruments that are not related to public ownership but are still strong control instruments.

Experts within the geopolitical sector are concerned about the increasing growth of international uncertainties that results from the exacerbating common economic situations together with the faintness of developed Western nations such as the U.S. apparent by the crisis (Çolak, Gungoraydinoglu, & Öztekin, 2018). Prior to the economic crisis, the notable economic advantages contributed by globalization continued to receive criticism in specific industries which changed after the crisis. Some of the existing differences relating to the current globalization and old globalization related to the international coordination mechanisms and organizations exist that regardless of the insufficient or imperfect elements helps in governing the global economic and financial activity. Disparate from the occurring of the Great Depression, the current economic crisis has seen states make different reactions that enhanced the comprehension of the activities at international levels.

More so, the current economic globalization has managed to spread around the globe thus enabling the rise of both low- and high-economic nations. Other than the economy, the spread of globalization has influenced different elements that include society and culture through unique speed and intensity. The international growth documented in the 21st century has contributed to an increase in the number of nations that play part in the international economy as well as strengthening their involvement in financial flows and global trade (Rodrik, 2018). This has largely been facilitated by stable growth recorded around the globe. Globalization increase has equally facilitated the in promoting the standards of living as well as creating new opportunities that enhance the efficiency of education and health systems. More so, it continues to promote the accessibility of knowledge and information in developing nations thus enhancing the development of skills. Prior to the 2008 financial crisis developing nations had managed to utilize globalization n minimizing the extreme poverty rates which are below one American dollar. Countries that continue to struggle with high poverty levels more do those in sub-Saharan Africa could be linked to delays in globalization appreciation.

Even as experts seek to understand how the international crisis could potentially contribute to shaping globalization it is realized that within the international relations discipline here lacks complete modifications from the state to the international level. On the contrary, critical globalization principles are re-arranged and complex elements are established in the system. Equally, the global crisis contributes to the emergence of globalization as the set regulations relating to sustainable development are utilized for the protection of natural interests thus enabling protected globalization. While the old phase of globalization had rapid financial growth, it is missing in the emerging globalization that appears to be largely shaped by privileges of knowledge, power, as well as expertise that play a strategic responsibility. The primary structural block for emerging economic creation appears to be the perspective capital.

Globalization Challenges Following Financial Crisis

Today, the world is increasingly globalized and continues to globalize even as notable health challenges continue to disrupt the efficiency of trade. For instance, utilizing the trade theory to evaluate globalization, it is understood that distribution and trade models play a crucial role in determining the impacts of cost shifts on the material wellness of distinguishable financial groups. The 1941 Stolper-Samuelson theorem is among the crucial economic statements and develops the strident distributional consequences likely to result from trade openings (Rodrik, 2018). From the theory, a case of a factor that is utilized intensively describes absolute loss but misses the relative losses. The concept fails to include the consumption preferences which implies the possibility of losses and within the united states economy, low-skilled employees are likely to be more affected due to the liberalization of trade.

Globally, the involvement of the public in regard to globalization has gained significant growth in the past three decades. While globalization has been appreciated in making notable milestones relating to life quality and standards of living, the idea is linked to theories that contribute to conflicts relating to social, political, theoretical, and ideological concepts. Vlados, Deniozos, & Chatzinikolaou (2018) argue that the currently experienced global crisis will contribute to the structural processes of both incubation and maturity globalization. Further, similar to capitalism evolutionary cases, the presenting economic world crisis appears as structural destabilization contributed by the global scale development regime. The reality of destabilization was first realized after long chain events presented rapidly following the collapse of sub-prime loan markets and the effects spread in all socioeconomic level relationships. The encounters that affect the current and future of globalization include issues equality versus inequality, poverty versus wealth, economy versus society, freedom versus control, real versus financial economy, uniformity versus diversity, and humanity and nature. The factors play a crucial role in shaping emerging globalization

Despite the contribution of economic crisis to shaping globalization, globalization is associated with different negative issues that include illegal migration, terrorism, organized crime, environmental deterioration, pandemics, climate change, and nuclear proliferation. The problems are normally so complex that nations are unable to handle them alone. These create the need for utilizing policies and regulations that enhance the positive outcomes and eliminates negative globalization impacts. Primarily, countries must focus on developing the most effective strategies for utilizing in overcoming economic crisis challenges. The strategies could include the creation of fundamentals that concentrate on the financial and economic demands while focusing on the susceptibilities and imbalances. The fundamentals could play a significant role in sustaining high development levels and providing corrections to major global issues.

Strategies for Promoting Globalization Resilience After Economic Crisis

Experts argue the need for the organization more so the G-20 that operate on global levels together with transitional organizations such as the (WTO and IMF0 to distance from behaviors that could possibly cause barriers to the commercial combination. National aid and programs of economic stimulus to industries and organizations should receive proper coordination to ensure that some do not end up collapsing. Instead, the need for supporting exchange programs that promote devolutions of competitiveness and enhance currency instability. Maximum concentration should be dedicated to the management of existing strategies with a primary focus on pushing the normalcy gain in rates of interest in the average and long-term as well as the managed improvement of huge fiscal deficits.

Experts define a crisis as a situation in decreasing financial performance presenting in a specific sector contributing the major firms to lose their marketing position (Raźniak, Dorocki, & Winiarczyk-Raźniak, 2017). The scholars argue that in the presence of a financial crisis, the component institutions and the industry lose the capacity for serving as the commanding and controlling giants within the specific city. Although its at times said that the stability of a properly-established function of command and control does not signify proper crisis management it is associated with a specific capital’s narrow sector specialization or the overreliance on a specific organization. Uncomplimentary economic changes contributed by economic crisis must not always impact the capitals with growth derivers that appear undiversified (Raźniak, Dorocki, & Winiarczyk-Raźniak, 2017). Nevertheless, when an economic crisis hit the industry with a dominating organization, economic collapse could be the organization's fate. Cities that have different successful organizations within different industries are not likely to feel the impacts since stable organizations tend to cover for the losses experienced by the weaker organizations and industries.

Raźniak, Dorocki, & Winiarczyk-Raźniak, (2017) utilize the concept of stock effect to explain industry differentiation in the capitalist economy. In a situation of uncertainty by some sectors during the crisis, local economies could utilize the stable aspects to overcome the crisis. The stable sectors work towards promoting the elimination of unpredictability contributed by the affected industry. For instance, the threat relating to extreme specialization was marked in Poland after the national economy weakened and focus on industry seemed a crucial responsibility in 1989. The well-developed urban areas within the nation receiving support from a specific sector or company faced huge economic downturns after Poland experienced notable economic changes and the years after 1989 faced market instability.

The states that relied on the economic stability of the country/ sector weakened to the extent of losing their role in the country’s economy. Raźniak, Dorocki, & Winiarczyk-Raźniak, (2017) notes that an organization's ability to gain resilience during an economic crisis is equally determined by the global interconnectedness since the organizational loses in a specific sector could inspire gains in other areas as well. Further, (Danner, Danner, & Bavaresco, 2017) acknowledge the existence of a link between national dominating institutional politics that are grounded on state welfare specialization and the economic globalization describing the social-economic development together with the economic crisis faced by the undeveloped national economies. The interconnection implies that the dependence of economies and political margins and centers must be put into consideration as crucial political players while targeting to mount and shape economic globalization since it is normally grounded on monopolistic capitalism together with the free market central radical obligation as the concept of global trade direction (Danner, Danner, & Bavaresco, 2017).

Conclusion

In conclusion, globalization has spread significantly since the last quarter of the 20th century. During the spread of globalization, the world recorded a notable increase in the economic crisis that appears to contribute to limiting, shaping, or promoting globalization. Experts argue that globalization after the economic crisis relates to the ability of national economies to show resilience. The resilience capability is linked to the interconnection of capitals and promotes stability in economic globalization in case the affected sectors were the primary specializations. Nations that have managed to integrate resources by limiting specialization show effectiveness in managing the global crisis. Nevertheless, the global economic crisis could cause issues that demand the involvement of all nations to handle, these include issues relating to climate change or pandemics. Considering that the interconnectedness contributed by globalization increases the impact of the global crisis, nations must focus on forming foundations for enhancing crisis management. The foundations could play a crucial role in managing imbalances and vulnerabilities through concentration on financial and economic demands.

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