"From being fairly simple and predictable, the markets for financial services have become increasingly diverse and less predictable. " Dickens P Global Shift (Page 2007) Looking at a couple of International businesses operating in financial services critically assess how they have responded to the forces of globalisation in their sector. To what extent is the globalisation process the cause or the effect of the "credit crunch"? Globalisation is difficult to define in one simple definition as it holds many definitions and ideologies. J. Scholte (2000,p.
3) explains how "disputes and confusion about globalisation often begin around the issue of the definition". To start off with, The Collins (2002) dictionary defines globalisation as the "process enabling financial and investment markets to operate internationally, largely as a result of deregulation and improved communications". This definiton explains how the globalisation process enables organisations to operate in a free market. A free market can be regarded as one big, world market where businesses can trade freely with each other from all over the world.
An alternative definition comes from G. Arnold (1998, p. 338) who describes globalisation as "the integration of capital markets throughout the world". This definition is very limited as it doesn't state the reasons why. P. Dickens (2007) describes Globalisation as it "has become a convenient catch-all term used to many to lump together virtually all the "goods" and "bads" facing contemporary societies". There are differing views in the Globalisation debate as different segments of people have different views/perspectives on this concept.
There are three types of views that each explains the nature and meaning of Globalisation. They can be referred to as the hyperglobalist, the sceptical, and the transformationalist views. "These define the conceptual space of the current intensive debate about globalization" according to David Held (1999). Hyper-globalists believe that consumer tastes and cultures are being standardised as global products are produced by global companies. This basically means that global companies are producing the same/similar products and selling them all over the world.
So in effect, everyone is getting similar products that have not been adapted to their specific tastes or culture. Hyper-globalists also believe that we live in a "borderless economy, states have no option other than to accommodate global market forces [and] in effect, the hyperglobalists hold, the autonomy and sovereignty of nation-states have been eclipsed by contemporary processes of economic globalization". This quote is written by D. Held (2008) and effectively suggests hyper-globalists believe large, international organisations are taking over global markets and selling standardised products.
Sceptical Internationalists believe that the newness of current globalisation is exaggerated. Hibson and Thomspon (1992) suggest "we do not have a fully global economy, we do have an international economy". This quote suggests sceptical internationalists don't believe that globalisation has expanded fully. According to D. Held (2008) sceptical internationalists suggest "that globalization is primarily a phenomenon largely confined to the major OECD states".
This again reinforces my statement that sceptical internationalists don't believe globalisation is occurring all over the world. Instead they suggest "the intensity of contemporary global interdependence is considerably exaggerated" (D. Held, 2008). D. Held (2008) comments that the transformationalist analysis argues that globalisation "involves the spatial re-organization and re-articulation of economic, political, military and cultural power". This quote suggests transformationalists believe globalisation is a question of power and thus globalisation is very powerful.
They also had the view that globalisation is a process that has a rippling effect, by this I mean what occurs in one state can benefit or negatively affect the states around it. D. Held (2008) argues that the transformationalist analysis regards globalisation as "it implies a world in which developments in one region can come to shape the life chances of communities in distant parts of the globe". Overall, the transformationalist analysis hold the view that globalisation is a very powerful process which involves the re-organisation of power.
They basically view globalisation in a positive light as it can be seen have a rippling effect. This rippling effect can be regarded as the multiplier effect, meaning what happens in one state will have effect on the states around it and so on. Different segments/groups of people hold different views depending on their position on the political spectrum. On the right of the spectrum there are pro-globalisers who believe "hyper-globalisation will bring greatest benefit to the greatest number" (R. Playford, 2008).
This view is similar to the transformationalist analysis as they both describe globalisation as having a rippling effect/multiplier effect which brings benefits to a great number because it brings benefits directly and indirectly. On the left hand side there are anti-globalisers who believe globalisation only benefits a small minority and global market forces will lead to the reduction of well-being for most (R. Playford, 2008). These views are similar to hyper-globalises view as they suggest goods are being standardised because the same goods are being sold everywhere globally.
Globalisation is a driver but money and motivation is needed in order for the process to succeed. There are many drivers behind Globalisation, the main driver being tariffs as organisations can trade in places where production costs are significantly lower. Thus reducing their costs and increasing their profitability. Many industries have decided to go global and so have done. There are a number of reasons for businesses doing this. The main reason for this is businesses wanting to expand. The clothing industry was the first sector to go global; the main reason for this is because this industry has low barriers to entry.