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Learning outcomes
arising from globalization Apply analytical techniques for establishing decision making protocols in a global context Argue that globalization has both positive and negative consequences for individuals, organizations and societies
Session outline
Defining globalization Explaining globalization Consequences of globalization Managerial implications of globalization Managing responsibly and globalization
Considering globalization
Globalization is a term you will have encountered numerous times in your studies to date Taken for granted as an inevitable phenomenon Governments, business and communities have responded resistantly to it Some debate as to what it is, what it represents and what extent it is happening
Defining globalization
Definitions
Definitions:
y ... Worldwide integration in virtually every sphere achieved
principally through markets ... whereby the world beomes more interconnected and the fates of ... people ... and ... Organizations become intertwined. Clegg et al (2008: 580)
y ...the intensification of world-wide social relations which link
distant localities in such a way that local happenings are shaped by events occurring many miles away Huczynski & Buchanan (2001: 897)
Associated with proliferation of primarily US models of production, products and services (i.e. brands)
y See Ritzers (1993) damning McDonalization thesis y Frances resistance to English language and fast food
Multinational corporations
y Single ownership, operating in several counties
Explaining globalization
Explaining globalization
Despite differences in opinion, most credible commentators agree that the factors are various and complex
y Chaos theory? Complexity theory? The perfect storm??
Also, its not a process that its easy to plot a beginning, middle and end to
y i.e. We cant say it started at 0843 GMT on 4th October 1979 or
Key forces
Developments in communications
y Most obvious and visible factor to us Internet, email, phones, video, transport, supply chains y Digital revolution over last 25 years
Internationalisation of capitalism
y Predicted by Lenin in 1909! y As local/domestic markets mature and saturate, producers must look for
other markets to colonise; especially as developing markets emerge with millions of enthusiastic new consumers (e.g. Shanghai)
NB Most of Manchester United FCs supporters will never visit Old Trafford stadium: they live thousands of kilometres away! y The creation of trading blocs such as the WTO, NAFTA and the EU
further with the privatisation of state corporations and scaling back of welfare provision: see Neo-liberalism as a concept
Consequences of globalization
Caveat
In your studies in management (e.g. Marketing, strategy, finance) to date, you will have looked at globalization and its consequences extensively On the whole, these consequences will have been presented as benign and as presenting opportunities for markets and consumer freedom of choice However, the phenomenon deserves a further, more circumspect examination If the concept is open to debate and interpretation; so are its effects The critical student of management must factor this into their analyses in order to make more enlightened and productive judgements
acquisitions y Enhanced innovation and development opportunities y Able to play financial systems and tax regimes
E.g. exchange rates, registration of subsidiaries off-shore
Some problems:
y Enhanced competition, market volatility, complexity, risk y Unwelcome scrutiny of corporate social responsibility (CSR)
down barriers to trade and financial transactions .. Or ... y (b) resisting it, seeking to protect domestic trade and jobs
competitively (investment, trade, growth, sustainable public expenditure) y On the other, their voters will be upset if they lose their jobs in factories which relocate to cheaper, less well regulated locations!
E.g. The European / American auto industry (or whats left of it!).
Governments in developing democracies are wary of balancing need for investment and for population not to be exploited! (e.g. Venezuela, India)
y Autocracies (e.g. PR China) dont care so much!
To what extent should states try to hold back the tide of globalization? Should they try?? Discuss ...
disappearing in their millions, moving to China etc. Labour markets must adjust to service and knowledge jobs Innovation, new skills and attitudes required Greater insecurity More emphasis on doing jobs that cant be replicated elsewhere
E.g. R&D, personal services, tourism and hospitality
Potentially, greater access to information and products gives greater freedoms and opportunities
y Does not always work this way in reality!
As corporations become more powerful, struggles may emerge with the communities on which their activities impact
y E.g. Pollution, labour markets
Managerial implications
Competition
y You must be constantly on your toes, to innovate, to experiment and
Culture
y You must be aware of other ways of thinking and seeing y Important in employment and marketing terms
Consumers and workers in different contexts respond to different imperatives (see Hofstede, 1980) What works in one place wont necessarily work in another!!
Intelligence
y Accurate data and the ability to analyse crucial
Stakeholders
y Need to negotiate diverse and often competing demands from
Management development?
y MBA (US-style) becoming standard
answers???
Either way, there are definite winners and losers To what extent should managers spend time worrying about the losers??
y Is this cynical??
The Old Rich World (i.e. USA, Europe) still the richest and most powerful regions
Summary
A variety of environmental forces have made the world more interconnected This has provided opportunities and threats The contemporary manager cannot afford to be insular and parochial An ethical mindset will lead to a more sustainable model of commercial operations