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Description of Globalization. Explanation.


Globalization, technologyDefinition Globalization. Description.

Globalization is the broad process of global integration, interconnectedness and interdependence of international business, economic activities, societies and cultures. It includes an increase of international:

  • Trade and competition

  • Production and industrial markets
  • Products and services
  • Migration, labor force movement and job markets
  • Investments and financial markets

  • Technology usage and R&D
  • Legislation and justice
  • Exchange of ideas, information and knowledge

  • Lifestyles and cultures

  • Politics and political structures

types of Globalization. Dimensions

In a 1996 AMR article Taylor, Beecheler and Napiet distinguish 3 globalization dimensions:

  1. Globalization of Production: encouraged by the cost advantages that can be won by establishing an international production network.

  2. Globalization of Products: favored by the significant rise in costs generated through the constant need to present ever-newer products.

  3. Globalization of Markets: access to more and more foreign markets since the fall of international trade barriers, creating new opportunities as well as stiffening competition.

Other major dimensions that can be distinguished are:

  1. Globalization of Services
  2. Globalization of Labor, work, people and talent
  3. Globalization of the Financial System, banking and insurance
  4. Globalization of Information, knowledge

Reasons for globalization. Causes

This increasing world-wide integration of markets for goods, services, labor and capital is caused by developments in:

  • Modern communication technology (TV, Internet, Google, social networks, mobile phones).

  • Transport mechanisms.

  • Freer international capital flows.

  • Changes in economic, cultural, political, social, and legal systems.

Debates on Globalization. Opinions and Conflicts

An important consequence of globalization on businesses is the increased power that multinational organizations have. This in turn has led to an increased call for Corporate Transparency, Corporate Accountability, Corporate Responsibility, Stakeholder Management and Shared Value. A number of paradoxes are relevant:

  1. New Era vs. Business as Usual: Is G. a new global age, or is there really nothing new under the sun and will governments and regions retain distinct strengths?

  2. Autonomous Process vs. Intentional Project: Is G. an unintended process, or is G. a deliberate, ideological project of economic liberalization?

  3. Hard vs. Soft: Is G. caused by the pursuit of material interests or is G. rooted in an expanding consciousness of living together on one planet?

  4. Good vs. Bad: Is G. to be celebrated because of product progress, better democracy, empowering of people, or is G. dangerous because of its consequences for the well-being of various groups, the sovereignty and identity of countries, the disparities among peoples, and the health of the environment?

  5. Global Sameness vs. New Differences: Does G. lead to cultural homogeneity, or will G. lead to new mixtures of cultures and is integration likely to provoke a defense of tradition?

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Compare with: Cultural Dimensions  |  Cultural Intelligence  |  Competitive Environment  |  Macro-Environment  |  Economies of Scale  |  Emerging Markets  |  Nationalization  |  PEST Analysis  |  Bottom of the Pyramid  |  Glocalization

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