Globalization is definitely the byword of the 2000s. The fact that people around the world are becoming more and more knowledgeable about each other is globalization, regardless of whatever other definition one may choose. The attempt to choose a definition, though, opens a real Pandora’s box of difficulties. Is globalization a state of mind? Is it a measure of business crossing borders? Is it a result of the Internet, or due to increased availability and low cost of airline transportation around the world?
And, of course, beyond the definitions there is the question: is globalization good or bad? Our purpose in this essay is to identify a range of definitions and focus points of the globalization theme, to help organize what has become a vast literature on the subject during the past half-decade. We do not intend to resolve any debate about what globalization is or should be, but we can certainly help to define the terms of reference.
If you think that globalization is bad because protesters have marched against it and shouted about it at International Monetary Fund and World Trade Organization meetings, or if you think that globalization is good because it brings more inexpensive products to you from abroad, we hope to expand your horizons a bit with the discussion below. Globalization has been given many meanings in different contexts.
One frequently-encountered meaning is that globalization is the homogenization of people’s tastes and demand patterns around the world, due to increased access to international communication of information about products and services as well as increased access to transportation of products and people across borders. Once television had spread almost throughout the entire world, and governments largely stopped trying to keep TV access from their populations in many countries, the images shown in this medium have really permeated societies around the world.
So that whether we discuss Baywatch or Cheers or Seinfeld, people from Japan to Argentina to Canada know who the actors are and what the scenery and society are like (to some extent)[ 1]. Along with the images, the global extension of some products such as Big Macs, Nestle coffee, and Levis jeans also provide more common experience to people of all income classes around the world. Whether people’s tastes are becoming more homogeneous can be debated, but the global prevalence of these products and images cannot.
From another perspective globalization may be seen as the threat of loss of national identity in response to homogenization of lifestyles around the world. The opposition of the French to US music and television is a classic demonstration of this phenomenon. If lifestyles really are becoming more homogeneous – and in all likelihood they are – then what does this imply for any country’s effort to be different or independent? Certainly, independence is alien to the globalization trend, in the sense that some parts of national difference must be sacrificed in order to share the benefits of, for example, computers and advanced telecommunications.
This perspective obviously raises the key question: is globalization good? National identity is also threatened by the trend toward reduction in the number of languages used around the world. Not only has English struck a solid blow to all other languages by becoming the lingua franca of the Internet, but in general the number of languages used in multilingual countries such as India and China is declining, and native Indian languages everywhere are disappearing.
These tendencies push toward a reduced role for nations as identifying groups and a greater role for transnational language affinity groups using English, Spanish and Chinese in particular. The decline of indigenous languages may signify primarily a reduction in the importance of subnational language groups, but at the same time the phenomenon is occurring at the international level as noted above. On a parallel dimension, globalization is also often seen as the threat of loss of national sovereignty.
This occurs as a result of the ability of multinational firms to circumvent the powers of uni-national governments. Firms can make decisions about where to locate production, how to distribute their products, and even what information and funds to transfer across national borders – almost without regard to national government concerns. The loss of national sovereignty also occurs as a result of amazon. com selling products and services around the world without regard to national boundaries.
And separate from companies, national sovereignty is reduced by the ability of individual citizens to move their wealth overseas, to buy what they want from overseas sources, and even to move themselves overseas out of the reach of the home government. Even currencies are reducing the independence of national governments to set their policies – witness the coming of the euro, which has replaced a dozen national currencies in Europe and now is managed by a supra-national central bank. Globalization is also the presence of goods and services from many places around the world in stores and markets of foreign countries.
The availability of foreign products and services in many countries of the world is a phenomenon that dramatically increased during the 1990s. Today it is common in the USA to find European and Asian products throughout the store in a department store such as Sears or JC Penney. In many countries it is also common to see stores such as Carrefour and Jumbo competing with superstores such as Wal-Mart. Globalization in the twenty-first century, different from earlier times when international business had periods of rapid growth and major impact on national economies, has a very decentralized character.
In this new environment, while the USA is the key country for many innovations and for many cultural phenomena such as movies and clothing, the spread of crossborder activity is not centered anywhere. Perhaps the Internet demonstrates this feature better than any other indicator. A new program or a new product can be created anywhere in the world, and it becomes instantly available worldwide through its appearance on the Internet. Another way to look at this decentralized globalization is to argue that it has raised the individual to the level of the key decision maker in decision making around the world.
When consumer choices are made (at least in the advanced countries, less so in the emerging markets), the individual has become closer to being sovereign. When group identity is defined, more and more people are coming to consider themselves members of a variety of groups (company employees, members of social and sports clubs, religious sects, proponents of one thing or another, etc. ). When the various interest groups are added up, it becomes clear that individuals are defining their own kingdoms, and that national boundaries are seldom part of the picture.
In this very real sense, the ability of people to define their own roles in the global context is making the world more individualized, that is, globalization is creating person-states and dismantling nation-states. Decentralized globalization threatens national sovereignty and also causes shocks to efforts at international integration. For example, the individual-centered globalization of the late twentieth and early twenty-first century is leading to the formation of many new countries.
These countries are being carved out of previous nations, when subgroups refuse to accept the sovereignty of the national government. Examples include the former Soviet Union (now 15 countries in addition to Russia), and Yugoslavia (now four countries). And there is pressure in countries such as Canada to form a separate state for Quebec and in Indonesia for four secessionist independent states – not to speak of such violent situations as the Basque separatist movement in Spain or the Palestinian push for a separate nation in the Middle East.
As pressures for global opening to movements of products, services and people grow, so too do pressures for people to organize governing units more responsive to their more clearly defined interests. At the level of the company, globalization may be defined simply as the development of competitive capabilities that enable firms to compete successfully against rivals from and in different countries. This concept is popular in the business literature, as firms are buffeted by the winds of competition from outsiders, either from nearby countries or far away ones.
The problems of dealing with global competition are numerous and profound, requiring today’s firms to find strategies that can withstand the entry of foreign rivals in the home market, as well as the firm’s own efforts to operate in other countries. Competitive capabilities require a global perspective, since rival products/services and firms can quickly enter almost any market today, if not directly then through the Internet. Hammond, Carol, and Robert Grosse. “Rich Man, Poor Man: Resources on Globalization. ” Reference Services Review 31. 3 (2003): 285-. ProQuest Research Library. Web. 9 Jan. 2012.