1. Effects of Globalization to E-Commerce
Evangeline N. Lachica
Colegio De Dagupan
Arellano Street,
Dagupan City, Pangasinan

2. Covered Topics
1. Globalization
Definition and its Importance.
Example of Globalization.
Effects of Globalization. Positive and Negative Effects.
Drivers of Globalization.
2. E-Commerce
Definition and Types of E-Commerce.
Effects of E-Commerce. Positive and Negative Effects.
Future of E-Commerce.
3. Effects of Globalization to E-Commerce
4. Insights/Synthesis

3. What is Globalization?
Globalization is the free movement of goods, services and
people across the world in a seamless and integrated
manner.
Globalization can be thought of to be the result of the
opening up of the global economy and the concomitant
increase in trade between nations. In other words, when
countries that were hitherto closed to trade and foreign
investment open up their economies and go global, the result
is an increasing interconnectedness and integration of the
economies of the world.

4. Importance of Globalization
Globalization allows countries to
benefit from economic synergy (figure
a) and collaborate in handling political,
social and economic challenges.
Globalization also increases
opportunities for companies to expand
operations in foreign markets. By
accepting foreign investment (figure b),
a government promotes build-up of its
infrastructure.
Government leaders are able to
communicate (figure c) about ways to
mutually improve economic conditions
and share in the positive economic
results.
figure a. economic Synergy in between
US and India

5. Importance of Globalization
figure b. foreign investment to allow
company opportunities
figure c. communication of government
leaders to improve economic conditions

6. Example of Globalization in Economics
Outsourcing can add to the
economic development of a
struggling country, bringing
much needed jobs.
Some automobiles use parts
from other countries, as in a
car being assembled in the
United States with the parts
coming from Japan, Germany,
or Korea.

7. Example of Globalization in the
Blending of Cultures
The Silk Road was a trade route between
China and the Mediterranean Sea area and it
allowed the exchange of not only goods, but
culture and knowledge.
Satellite television allows shows from one
country to be broadcast in many others,
adding to cultural globalization.

8. Globalization in the Blending of
Cultures
Christian missionaries from Europe added
to the globalization of Christianity.
Greek culture spread across Africa, Europe and
Asia through Alexander the Great. This is the
reason there are cities named for Alexander in
Africa, Egypt and Turkey.

9. Example of Globalization in Technology
The Internet is a major contributor to
globalization, not only technologically
but in other areas as well, like in
cultural exchanges of the arts.
Global news networks, like CNN, contribute
to the spread of knowledge.

10. Example of Globalization in Technology
Cells phones connect people all over the
world like never before. Around 60 percent
of all people in the world use cell phones.
Military cooperation between countries adds
to globalization, such as the Strategic Arms
Reduction Treaty or anti-terrorism
agreements.

11. Example of Globalization in Technology
Environmental cooperation has spread to help reduce
chlorofluorocarbon emissions to slow the depletion of the
ozone. One example is the Montreal Protocol.

12. Other Examples of Globalization
The Olympics began in ancient Greece and
continue today.
The FIFA World Cup has more viewers
than any other sporting event from
around the world.

13. Other Examples of Globalization
Travel and tourism allows globalization of
many things, like the exchange of money,
cultures and knowledge.
The United Nations is an
intergovernmental organization that
promotes cooperation in many areas
including human rights, peace and
economic development.

14. Other Examples of Globalization
Organizations such as the Red Cross respond quicker to
disasters around the world.

15. The Positive Effects of Globalization
Globalization has become one of the most debated
subjects of recent times. It has been hailed as one of the
best things to happen to the world by its proponents, while
opponents have labeled it as neo-imperialism. Despite its
challenges, the positive role it has played in changing the
lives of millions of people around the world is commendable.
Though there are a host of challenges associated with
globalization, it has numerous positive effects as well.

16. Increased Competition.
One of the most visible effects is the
improved quality of products due to global
competition. Customer service and the
'customer is the king' approach to production
have led to improved quality of products and
services. As domestic companies have to fight
out foreign competition, they are compelled to
raise their standards and customer satisfaction
levels in order to survive in the market. Besides,
when a global brand enters a new country, it
comes in riding on some goodwill, which it has
to live up to. This creates competition in the
market and a 'survival of the fittest' situation.

17. Employment.
With globalization, companies have forayed into
the developing countries and hence generated
employment for them. But it can turn out to be
either good or bad, depending on the point of view
you wish to see it from. It has given an opportunity
to invest in the emerging markets and tap the
talent which is available there. In developing
countries, there is often a lack of capital which
hinders the growth of domestic companies and
hence, employment. In such cases, due to global
nature of the businesses, people of developing
countries too can obtain gainful employment
opportunities. But the developed countries have
lost jobs on account of this shift of jobs to the
developing world and hence it is a pinch felt by
people in the First World.

18. Investment.
A lot of companies have directly
invested in developing countries like Brazil
and India by starting production units, but
what we also need to see is the amount of
Foreign Direct Investment (FDI) that flows
into the developing countries. Companies
which perform well attract a lot of foreign
investment and thus push up the reserve
of foreign exchange.

19. Foreign Trade.
While discussing the effects of
globalization, how can we forget about the
impact of foreign trade on an economy.
Comparative advantage has always been a
factor, even in during old times. While trade
originated in the times of early kingdoms, it
has been institutionalized due to globalization.
Previously, people had to resort to unfair
means and destruction of kingdoms and
countries to get what they wanted. Today, it is
done in a more humane way, with mutual
understanding. People who operate in
uncivilized ways have to face the WTO and
other world organizations that have been
established with a view to control and regulate
trade activities of the countries.

20. Spread of technical know-how.
While it is generally assumed that all the
innovations happen in the Western world, the
know-how also comes into developing countries
due to globalization. Without it, the knowledge of
new inventions and medicines would remain
cooped up in the countries that came up with
them and no one else would benefit. The spread
of know-how can also be expanded to include
economic and political knowledge, which too has
spread far and wide. The most obvious example
of the spread of knowledge is that the Western
world today is waking up to the benefits of
Ayurveda and Yoga - traditional Indian practices,
while the Western antibiotics are flooding the
Indian markets and improving the quality of life
(and the longevity too) of people in India.

21. Spread of Culture.
Not all good practices were born in one
civilization. The world that we live in today is a
result of several cultures coming together.
People of one culture, if receptive, tend to see
the flaws in their culture and pick up values
that are more correct or in tune with the times.
Societies have become larger as they have
welcomed people of other civilizations and
backgrounds and created a whole new culture
of their own. Cooking styles, languages, and
customs have spread all due to globalization.
The same can be said about movies, musical
styles, and other art forms. They too have
moved from one country to another, leaving an
impression on a culture which has adopted
them.

22. Spread of Education.
One of the most powerful effects of
globalization is the spread of education. Today,
you can move in the search of the best educational
facilities in the world, without any hindrance. A
person living in U.S. can go to another continent
for a new experience which he may not find in his
home country. If one is interested, one can even
get a specialization in subjects not indigenous to
his country and then spread that knowledge to the
home country. A good example of that is how the
American managers went to Japan to learn the
best practices in the field of mass production and
incorporated that knowledge in their own
production units.

23. The Negative Effects of Globalization
The phenomenon that is globalization, has brought new dimensions to this
world, and people are mingling with each other like never before. The social,
economic, and political changes that globalization has brought have been
accompanied by some challenges.
Increased Child Labor and Slavery.
There are various schools of thought which
argue that globalization has led to an increase
in activities such as child labor and slavery. In
countries with little or no accountability,
corporations employing children can work
smoothly by bribing the officials, which may
result in an increase in illegal activities. Critics
opine that globalization has resulted in a
fiercely-competitive global market, and
unethical practices in business is a by-product
of this.

24. Employment Disparity.
In order to cut down costs, many firms in developed
nations have outsourced their manufacturing and white-
collar jobs to Third-World countries like India and China,
where the cost of labor is low. The most prominent
among these have been jobs in the customer service field
as many developing nations have a large English-
speaking population - ready to work at one-fifth of what
someone in developed world may call 'low-pay'. This has
caused a lot of resentment among the people of developed
countries, and companies have been accused of taking
their jobs away. Another problem is that many Americans
are not satisfied with the level of customer service that
they are subjected to, and this has caused a lot of
animosity among people and has added to the dissent
that people already have against outsourcing.

25. Rise in Terrorism and Criminal
Activities.
Globalization may have inadvertently
helped terrorists and criminals. At the
heart of globalization is an idea that
humans, materials, food etc. be allowed to
travel freely across borders, but 9/11 was
a ghastly reminder that people with evil
intentions can use it as an opportunity and
cause damage.

26. Cultural Deterioration.
Fast food chains like McDonalds and KFC
are spreading fast in the developing world.
People are consuming more junk food which
has an adverse impact on their health. Apart
from the health concerns, there is something
else that globalization has been criticized for,
and it is the accusation that it has opened
floodgates for restaurants and eateries which
are insensitive to the religious beliefs of the
host nation. For example, a lawsuit had to be
filed against McDonalds in India, after it was
accused of serving beef in their burgers.

27. Growing Gap between the Rich and the
Poor.
While the rich are getting richer, the
poor are struggling for a square meal. If
the current Occupy Wall Street protests
are a reminder of how angry people are
with the current set-up, then those who
govern us should take notice, and work
towards alleviating poverty. Ideally,
globalization should have resulted in
creation of wealth and prosperity, but
corporate greed and corrupt government
has ensured that money is not distributed
equally.

28. Rise in Health Risk.
When the first-known case of AIDS
came up in America, only few would
have traced its origin to Sub-Saharan
Africa. Globalization bought people
from various countries together, and
this is perhaps the reason that a virus
from a jungle was transported to
almost every country in the world.

29. Environmental Degradation and
Pollution.
Environmental degradation is an issue
which has been debated ferociously in
various international meetings, and it has
to be accepted that globalization is one of
the most important factors that has
aggravated the situation. The amount of
raw materials needed to run industries
and factories is taking a toll on the natural
reserves of planet earth, and pollution has
severely impacted the quality of air that we
need so very much for our survival.

30. Key Drivers of Globalization
The primary drivers of globalization are rapid advancements in
technology, culture, economics and politics. With each passing year, the
speed at which transactions take place and the spreading influence of
cultural forces serve to integrate international societies.

31. What is E-Commerce?
E-Commerce is the buying and selling of products and services
by businesses and consumers through an electronic medium,
without using any paper documents. E-commerce is widely
considered the buying and selling of products over the internet, but
any transaction that is completed solely through electronic
measures can be considered e-commerce.
E-commerce is subdivided into three categories: business to
business or B2B (Cisco), business to consumer or B2C (Amazon),
and consumer to consumer or C2C (eBay).

32. Types of E-Commerce
Business to Business (B2B).
Business to Business or B2B refers to e-
commerce activities between businesses.
These transactions are usually carried out
through Electronic Data Interchange or
EDI. This allows more transparency among
business involved; therefore business can
run more efficiently.

33. Business to Consumer (B2C).
A type of electronic commerce in
which products and services are
marketed and sold by a firm to
individual consumers through a Web-
based application. Consumers can
check product prices and
specifications on the firm’s Website,
and they can place their orders online
without visiting a store or consulting
to a sales representative.

34. Consumer to Consumer (C2C).
C2C E-Commerce involves electronically-
facilitated transactions between individuals,
often through a third party. One common
example is online auctions, such as Ebay,
where an individual can list an item for sale
and other individuals can bid to purchase it.
Auction sites normally charge commission to
the sellers using them. They act purely as
intermediaries who match buyers with sellers
and they have little control over the quality of
the products being offered, although they do
try to prevent the sale of illegal goods, such as
pirate CDs or DVDs.

35. Positive Effects of E-Commerce in Society
Convenience.
Shopping online can be a lot more convenient
than heading out to a shopping centre to find
what you want. Instead, you can simply sit at
home with access to the internet and order
away.
Disabled and Elderly.
Those who suffer from disabilities, whether
they are physical or mental, or old age can
often struggle to go shopping in your regular
shopping mall. This can become more of a
problem when living greater distances from
town centres. Online shopping allows these
individuals to stay in the comfort of their own
home when ordering the products and services
they desire.

36. Information Availability and Price
Comparison.
The internet is filled with information and
with the use of search engines like Google
almost anything can be found out rather
quickly. When you involve online shopping
with these abilities you can easily find the
best price for the product you are searching
for without having to travel from retailer to
retailer. Google Shopping is an example of a
product search engine that finds the best
price at the selling stores.

37. New Businesses.
When starting off a new business it can be mega-
expensive to get it all up and running if you are
planning on being a brick organization. The start-up
and running costs for having your business start with
an online presence is much cheaper than getting a
shop and a place for product storage.
Jobs.
In order to have an online presence and trade online
you will need a website that is capable of selling your
products or services with acceptable methods of
payment. Smaller businesses are likely to hire an
external company that specialises in setting up this
kind of thing but larger companies on the other hand
are likely to employ their own web developers,
marketing analysts and search engine optimisation
specialists.

38. Time Saving.
Ordering an item online through an e-commerce site
takes a lot less time when compared to travelling to
your nearest store.
24/7.
Website's that run online are constantly available at
all hours providing there are no technical
difficulties. This is a great advantage for those who
finish work late and don't have the time to run down
to their nearest outlet to find the product they desire
as they can know simply order online

39. Greater Choice.
When going out shopping you usually only have the
availability of the products that are there. This differs
when compared to shopping online. Firstly, it is highly
likely that you can find the product you want to from
multiple different sites. Also, when purchasing from a
bricks and clicks organisation it is possible that the
product you are after isn't available at your nearest
store but instead it can be delivered from a store
based elsewhere.
PreOrders.
Most high demanded products online today tend to have the
option to be pre-ordered. This is a process that involves you
paying for the product before it is released but in return having it
delivered to your door on the release day. This is a very popular
process with most entertainment products such as computer
games.

40. Advertising Online.
The internet today is a very popular place and this makes it ideal for
advertising. Businesses who run their own e-commerce site often
advertise for other non-competitors while generating additional
revenue and building a partnership with that business which could
do both companies a great of good.
New Marketing Models.
Due to how online shopping has taken off in the recent years
additional features have been developed alongside them. These
include things like review forums where users can read up on what
other people thought about a particular product. Advertising has also
become a big part online as popular websites tend to display advert
banners or sometimes the annoying pop-ups in order to attract in
customers. PPC adverts have become a popular way of advertising
and this works on a pay-per-click basis where the company hosting
the advert will receive payment by the amount of clicks on that ad.
Mailshots and customer loyalty schemes have also moved along with
the introduction of e-commerce websites.

41. Negative Effects of E-Commerce to Society
Unemployment.
Some organizations or businesses move from being a brick
organisation, where they are based in a store, and move to
become an online, more globally available company and
therefore have no need for the staff they have employed in their
stores.
Uncertainty.
As there are some websites out there with the purpose to
scam some people are afraid of entering their credentials
online and they can't be blamed. There are trusted sites out
there and there are multiple ways to detect whether they are
official sites or not. PayPal is an online payment method that
people can use that keeps your credential information private
from the trader. The online trade will then work with PayPal
meaning that none of your payment details are shared with
the company you a buying from.

42. Security Issues and Customer Trust.
It is important to provide a safe and secure online shop for a
customer when their trying to buy products from you. This
helps create a greater customer trust and ensure them that
they can place an order without any worries to help encourage
additional business with that customer in the future. The
business will need to make sure that a safe gateway is
available and that the information is secured when the
customer makes the payment
Returns and Complaints.
If there is a product malfunction then the customer is going to
want a replacement or refund giving that it was not their fault,
if it arrived damaged for example. With a business that is
solely based online it can be a lot of hassle for the customer to
sort out a return or a refund as they can't simply walk into
their nearest corresponding store. This can also create a bad
experience for the customer and it is likely they will not be
coming back to your shop again.

43. Direct Communication and Product Experience.
When you order a product online the customer will have no face-
to-face contact with the salesperson and no hands-on
experience with the product. Instead, the product will usually
have a few images to get an idea of the product along with a
product description. Sometimes these images and descriptions
can be misleading and the customer could end up ordering an
item that is not exactly what they want.
Delivery.
When you order a product or service online you have to wait for the
product to arrive. Usually these e-commerce sites offer different options
for delivery which will range from faster delivery times at a higher price
to slower delivery times at a lower price or in some cases free. But
sometimes the product can take a good duration to come due to many
issues and this can cause problems if the product or service you
ordered is for an event that is coming up, like a birthday or Christmas
present.

44. Future of E-Commerce

45. Effects of Globalization to E-Commerce
The process of globalization creates new challenges and
opportunities for firms. The opportunities include access to
new markets and participate in global production networks
that are becoming prevalent in many industries such as
automotive, electronics, toys and textiles.
Globalization is conceptualization of the international
political economy which suggests and believes essentially that
all economic activity must be conducted within a perspective
and attitude that constantly is global and worldwide in its
scope.

46. Effects of Globalization to E-Commerce
Globalization has affected political, economic and
social aspects which transformed the way people
conduct business. The most obvious signs of
globalization that impacted E-Commerce is on the three
dimensions: discipline in the global market, financial
contents and economic network.
Market discipline refers not only to goods and
products but also to work and capital. Financial
contents refers to the speed of money and economic
networks are founded on the economic information.

47. Insights/Synthesis
From the many articles, researches and websites concerning E-
commerce I’ve read, commonality from these stated that E-Commerce
will continue to improve and will definitely evolved into a more enhanced
world trade.
From the message of DG Mike Moore, the World Trade Organization
(WTO) purpose is to ensure that developing countries can derive
maximum benefit from technology and need not be left behind.
He also stressed that there are 3 things needed to effectively
participate in E-Commerce: first, access to computers and hardware;
second, efficient low cost telecommunications; and third is to train
personnel.

48. Insights/Synthesis
Julie Meringer, group director of Forrester research said that the next
wave to E-commerce are composed of Productivity and Innovation. The
speech simply outlines the following topics:
• Leading firms must harness technology to drive productivity
• Productivity via technology is eCommerce’s next wave
• As productivity takes hold, innovation will reignite around the X
Internet
L. Lee Tuthill, Trade in Services Division personnel of WTO, on the
other hand, talked about Implication of Classification Issues of WTO.
The talk focus on the tax revenue, tariff revenue and their level of
benefits.

49. References:
http://lessonplans.mrdonn.org/worldcultures.html
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http://jameslupton.blogspot.com/
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50. References:
http://www.wto.org/english/news_e/spmm_e/spmm40_e.htm
http://www.wto.org/english/tratop_e/devel_e/sem05_e/presentation_me
ringer.ppt#31
http://www.wto.org/english/tratop_e/devel_e/sem05_e/presentation_tut
hill.ppt#25