“Globalization is the process by which the experience of everyday life marked by the diffusion of commodities and ideas is becoming standardized around the world.”
The Encyclopedia Britannica
“Globalization is to make global or worldwide in scope or application.”
The American Heritage Dictionary
Globalization is a process by which the people of the world are bound. The factors leading to Globalization are economic, cultural and political. Common global challenges like Climate Change, Food security and economic challenges have seen concerted Global Action.
Economic Factors
From the Economic sense and International trade perspective “The Silk Route” and “The Spice Trade” has been there for centuries. In fact the 19th century was sometimes called “the first era of globalization”. The end of the Second World War saw the signing of the Bretton Woods agreement, to establish rules for economic and financial relations. The Bretton Woods agreement helped establish the IMF and the World Bank. The ITO was a result of this agreement. From the ITO evolved GATT. The functions of GATT were taken over by the WTO which came into existence in 1995.
The most recent rounds of discussion under the WTO, the Doha Development Round are currently stalled due to mutual fears between the developed and the developing countries.
Socio Cultural Factors
Alan Rugman, at the Indiana University’s Kelly School of Business, writes in his book “The End of Globalization”. "Globalization is a myth; it never really occurred anyway". "The vast majority of manufacturing and service activity is organized regionally, not globally. Multinational enterprises are the engines of international business--and they think regionally and act locally."
Rugman claims that there are virtually no truly global businesses, for even giants such as McDonald's and Coca-Cola tailor their products to the local market. From a personal perspective I could not agree more. I was once the implementation head of a group required to “Globalize” the training content for a very large Fast Food Chain, with thousands of outlets world wide. At the start we thought all we had to do was to translate the content on SOPs (Standard Operating Procedures) into the local languages. Simple issues started coming up, different signs and colors in different regions took on different meanings. Red was the color of danger in America or the color to stop, while the same was an auspicious color in China, a signal of good fortune.
This led us to the term “Localization”, which is modifying Global products to suite the local market. So our efforts of Globalization of SOP’s actually became Localization of SOPs. So from a socio cultural perspective we were way off from Globalization. It reminds me of the words of Rudyard Kipling:
“East is East and West is West, and never the twin shall meet”
Political Factors
Another force contrary to the concept of globalization is the nation-state. In terms of concerted global action the domestic opinion over-rides global considerations.
The Kyoto Protocol on Global Warming has still not been ratified. The year 2008 has seen massive protests in countries throughout the world by the massive jump in food prices. Approaches to the use of biofuel in the industrialized nations has been claimed to be the recent cause of surge in food prices. In a report published in the Guardian paper in July 2008 it has been reported “Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank”.
So on major issues of Economics, Global Warming and Food security while there is a lot of collective debate the work on the ground is still way off from Global Consensus. Culturally we have a long way to go.
The Encyclopedia Britannica
“Globalization is to make global or worldwide in scope or application.”
The American Heritage Dictionary
Globalization is a process by which the people of the world are bound. The factors leading to Globalization are economic, cultural and political. Common global challenges like Climate Change, Food security and economic challenges have seen concerted Global Action.
Economic Factors
From the Economic sense and International trade perspective “The Silk Route” and “The Spice Trade” has been there for centuries. In fact the 19th century was sometimes called “the first era of globalization”. The end of the Second World War saw the signing of the Bretton Woods agreement, to establish rules for economic and financial relations. The Bretton Woods agreement helped establish the IMF and the World Bank. The ITO was a result of this agreement. From the ITO evolved GATT. The functions of GATT were taken over by the WTO which came into existence in 1995.
The most recent rounds of discussion under the WTO, the Doha Development Round are currently stalled due to mutual fears between the developed and the developing countries.
Socio Cultural Factors
Alan Rugman, at the Indiana University’s Kelly School of Business, writes in his book “The End of Globalization”. "Globalization is a myth; it never really occurred anyway". "The vast majority of manufacturing and service activity is organized regionally, not globally. Multinational enterprises are the engines of international business--and they think regionally and act locally."
Rugman claims that there are virtually no truly global businesses, for even giants such as McDonald's and Coca-Cola tailor their products to the local market. From a personal perspective I could not agree more. I was once the implementation head of a group required to “Globalize” the training content for a very large Fast Food Chain, with thousands of outlets world wide. At the start we thought all we had to do was to translate the content on SOPs (Standard Operating Procedures) into the local languages. Simple issues started coming up, different signs and colors in different regions took on different meanings. Red was the color of danger in America or the color to stop, while the same was an auspicious color in China, a signal of good fortune.
This led us to the term “Localization”, which is modifying Global products to suite the local market. So our efforts of Globalization of SOP’s actually became Localization of SOPs. So from a socio cultural perspective we were way off from Globalization. It reminds me of the words of Rudyard Kipling:
“East is East and West is West, and never the twin shall meet”
Political Factors
Another force contrary to the concept of globalization is the nation-state. In terms of concerted global action the domestic opinion over-rides global considerations.
The Kyoto Protocol on Global Warming has still not been ratified. The year 2008 has seen massive protests in countries throughout the world by the massive jump in food prices. Approaches to the use of biofuel in the industrialized nations has been claimed to be the recent cause of surge in food prices. In a report published in the Guardian paper in July 2008 it has been reported “Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank”.
So on major issues of Economics, Global Warming and Food security while there is a lot of collective debate the work on the ground is still way off from Global Consensus. Culturally we have a long way to go.
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Therefore is it correct to say “Globalization is a Myth?”
Therefore is it correct to say “Globalization is a Myth?”
5 comments:
Sunil Shaib:
Some point over the last seven years, you have probably heard someone - a friend, a business executive, the president of the United States - say that the Sept. 11 attacks sent the American economy into a slump. It's an understandable enough notion, given that the attacks occurred in 2001 and a recession began that same year.But it's simply incorrect. The economy started shrinking in March 2001, largely because of the hangover from the technology bust. The attacks did cause a sharp drop in the stock market, but if you were to go back and look at, say, the quarterly numbers on consumer spending, you wouldn't even know a major event had happened in September. By November, the economy was growing again.The current downturn - and I'd say the odds that it's a true recession are about 75 percent - has no one dominant mythology.
Philippe Alléosse's cellar in Paris is an Aladdin's cave for lovers of French cheese.His temperature- and humidity-controlled subterranean storage rooms in the 17th Arrondissement are packed with carefully aged varieties, among them Brin d'Amour from Corsica, Bethmale from the Pyrénées and Bleu de Gex from Haut-Jura. He knows just when to add a dash of water or Chablis to the rind and when the product should finally be released to the public.
But Alléosse, premier maître artisan fromager affineur, or master cheese ager, fears that he is one of a dying breed.He is worried that industrial processes - from sourcing through production and distribution - are squeezing small farmers and threatening to deny consumers the choice, complexity and quality of a product that is considered a luxury in many countries but a staple on French tables.The giant producers counter that such complaints are sour grapes and that traditionalists are scared of losing market share to new techniques, resentful of their profit. Consumers, they say, are happy with the products available and prices charged.Richez-Lerouge has even produced a calendar of French women posing in their underwear to try to bring publicity to the cause. She wants certain producing areas to be protected from sale to large groups in the way that Champagne producers are, and for the benefits of price rises to be passed on to small producers rather than distributors and large groups. Others hope a solution can occur without such intervention. The battle is not lost yet,. There are still cheese shops, there is still choice. We must hope that there are enough passionate people out there to preserve what we have.Ten years after the Asian financial crisis, the region is reveling in strong growth and booming markets. The exuberance was palpable over the weekend in Kyoto, where the Asian Development Bank held its annual meeting. Politicians, bankers and economists from every financial center chewed over the vast opportunities in a region many fled a decade ago and, until recently, pointedly avoided.Once, there was a bridge to the 21st century. But no major Democrat today speaks as confidently about globalization and technological change as Bill Clinton and Al Gore did a decade ago. No major Democrat today speaks as optimistically about free trade as Gordon Brown does in Britain.In the Democratic Party today, neopopulists and economic nationalists are on the rise. The free-traders are on the defensive. The Democratic view of the global economy has grown unremittingly grim. When John Edwards talks about the economy, you think he's running for the Democratic nomination of 1932.The neopopulist caucus in the Democratic Party is like the anti-immigrant caucus in the Republican Party. Both speak for loud and angry minorities who have been hurt by globalization. But the party that mistakes their experience for the central reality will doom itself for years to come.
Ramesh Manghirmalani
Sunil,
The world is semi globalized and I see it be that way for a few decades to come, there are advatanged in terms of arbitrage when we are semi globalized. We would collectively have a better future as time progresses, even the 10% of integration that had occured has raised the standard of living for everyone and lifestyles today are better than yesterday both in the east and in the west.
I agree with you that cultural boundaries will take a while to overcome and thats why I feel we should see the advantages in being semi globalized or even deci-globalized (10%) :)
China has many issues that aren't overtly visisble and these are particularly in the cultural and administrative part of their side.They are more favorable than India in their geographic distance and economic distance to the west and ease of doing business.
India issues with respect to inability to innovate, think out of the box. This must be fixed.
Nitin Kumar
Is Globalization a Myth?
It really depends on what you mean. Are companies going to continue to push the global boundaries to find talent and economic advantages....yes! Are we looking at a world with no boundaries and a common set of laws. No!
The world is complicated with different cultures, geography and political history. The interests of agricultural countries are far different from the wishes of fully industrialized areas. Much of that difference has to do with the geographical and cultural differences of those particular areas. Those differences are not going to change. When trade between countries is mutually beneficial, trade will continue to flourish. However, all of the countries are never going to agree to follow the same rules.
As long as the US government (and other developed nations.) doesn't place a heavy tax on imports where environmentally practices are not used, the Kyoto protocol has not chance. We are currently exporting our waste to none developed countries that take cash over clean streams. This will continue as long as the system is in place.
Also, the needs of a country to feed it's people and provide a better way of life will always trump world wide food security and alternate energy. The harnessing of energy has built the civilization we now have, and using the most economical energy sources will always be balanced with environmental impact. It's much more of a balance than a choice of right or wrong for every country.
As for conflict between the left and right, socialism and capitolism...... As long as freedom is available, the conflict between the best way to run a government and to who's advantage that takes will be of the utmost important to everyone. This is actually healthy. It's just a shame that the current way in which the political parties split issues, and elect their delegates leave very little concern for the middle. The base of each party holds way to much power and it continues to polarize the country.
Michael Manos, PE, PMP, LEED AP
http://mlmanos.blogspot.com/
The UN is considered to be dysfunctional by many people (a situation which has persisted for decades). An argument against One World Order. Isolationists may use the "Economic Meltdown" to argue for severe restrictions on globalization of financial institutions. Ordinary deposit holders across Europe are finding out that Iceland isn't Switzerland.
Kyoto will never get approved by Congress here in the US because Kyoto gives China and India a free pass. Plus it is probably a bad idea to begin with. We don't need international protocols to decide to conserve energy. It is an economic security issue. Self interest in areas such as "energy independence" is a powerful argument. You can fault the US with not taking that problem seriously enough. By the same token, much of the EU is highly dependent on Russia for energy; which is not a pretty picture.
Jim Bogart
Hi Sunil,
Well it is easier to do business with China as the country has aligned its strategy for growth, its policies and its structure internally which enable it to match the scale and ability to adapt quicker.
One the other hand India has not aligned its strategy to its structure and policies (clearly this area like infrastructure) needs work, hence it is percieved that India as a country needs more adaptability.
On the personality side I think pragmatism is masked into formality and emotional aspects morph into informality when it comes to doing business, of course this can become an advantage ot distavange depending on who we speak to.
These traits will be perceieved very differently in Arabia vs Australia, I think they key is to be adaptabile and flexible that can enable people to morph into professional cultures easily and Indians do this better than the Chinese.
The key reason for this is our heritage interms of the diversity we have gotten used to dealing within the country due to a multi cultural society.The Chinese are more formal and more efficient and this is why they have gained respect,Indians tend to take it easy and at times get away with mediocrity in the country and try to do the same outside, the disadavantage stems from this.
Nitin Kumar
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