Globalization




Not a new phenomenon: goods have been
traded between regions since ancient times
Corporations now seen as more efficient than
governments in distributing goods and
services needed by citizens
Today, new view toward trade and market
systems is referred to as globalization
http://www.youtube.com/watch?v=8ZYiTaR6k
f8&feature=related
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
1
Defining Globalization




Globalization: a process of decreasing constraints
on the interactions among the nations and peoples
of the world.
Economic globalization: the integration of
fragmented markets into a global economy.
Political globalization: the process by which world
power relationships change, and there is a loss of
sovereignty by the states.
Social or cultural globalization: the emergence of a
worldwide cultural system.
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
2
Three Globalization Theses
1.
2.
3.
The monoculture or homogenization thesis in which
Hollywood, Starbucks, MTV, Amazon.com and
McDonald’s (to name a few) are seen as combining to
drive out local cultures around the world and replace them
with Westernized (or Americanized) culture.
The polarization thesis builds upon this by positing an
emerging cultural dichotomy between Western and nonWestern ways of life which may lead to a civilizational
conflict between the West and an emergent IslamicConfucian alliance: McWorld vs. Jihad
But also substantial evidence of a third thesis – the
hybridization thesis – supported by everything from
successful intermarriage to cosmopolitanism to
glocalization.
Globalization and the
Implications for Business








Damage to environment
Support for oppressive regimes
Criticism of marketing practices (e.g., tobacco,
pharmaceutical, baby formula, etc.)
Arms trade
Treatment of employees (e.g., sweatshops)
Treatment of indigenous peoples
Genetic modification of plants and animals
Corruption and bribery
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
4
The United Nations Global Compact
Human Rights:
1. Respect internationally proclaimed human rights
2. Not be complicit in human rights abuses
Labour Standards:
3. Uphold the right to collective bargaining
4. Eliminate all forms of forced and compulsory labour
5. Effective abolition of child labour
6. Eliminate employment discrimination
Environment:
7. Precautionary approach to environmental challenges
8. Promote greater environmental responsibility
9. Use environmentally friendly technologies
Anti-Corruption:
10. Avoid corruption (e.g., extortion and bribery)
http://www.unglobalcompact.org/
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
5
The Debate Over Globalization:
Supporters




Trade leads to more efficient production of
better goods and services
Better opportunities for employment and
higher incomes
Transfer of capital, technology, intellectual
property, skilled labour
Some globalization problems (like
sweatshops) are just natural ‘growing pains’
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
6
The Debate Over Globalization:
Opponents









Benefits received by only a few
Creates unemployment
Increased poverty and inequality
Causes periodic financial crises
Destroys local environment
Destroys cultures
Violates human rights
Questionable payments made
Disrespect of intellectual property
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
7
Globalization and International
Non-governmental Organizations (INGOs)



International Non-government Organizations
(INGOs): groups that hold shared values and
attitudes about the issues relating to globalization
and advocate for changes to improve conditions in
developing countries
INGOs put pressure on corporations and
governments
Ex: Corporate Watch, Oxfam International, Amnesty
International, Greenpeace
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
8
Globalization and International
Non-governmental Organizations (INGOs)

Corporate Watch


Oxfam International


13 orgs & 3,000 partners in 100 countries searching
for lasting solution to poverty, suffering & injustice
Amnesty International


Investigate and expose corporate violations of human
rights, environmental crimes, fraud & corruption
1.8 million members in 150 countries: human rights
Greenpeace

Focuses on threats to biodiversity and environment
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
9
Institutions of Globalization



Supranational Institution: an international
organization that transcends national
boundaries where the member states share
in decision making on particular issues
pertaining to the members
Ex: World Bank, IMF, ILO, WTO
Also consider political bodies such as:
European Union, NAFTA, ASEAN, G-7, G-20
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
10
Institutions of Globalization

The World Bank:


The International Monetary Fund (IMF):


Fosters financial stability, international trade, employment,
and reduction of poverty.
International Labour Organization (ILO):


Provides financial and technological assistance to
developing countries.
UN agency that seeks to promote social justice and
internationally recognized human and labour rights.
World Trade Organization (WTO):

Coordinates agreements reducing trade barriers.
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
11
Globalization and Canadian Business
and Society: Cuts both ways





Pressure to forge international links
Must meet challenges of global restructuring
(e.g., R&D, education, competition policy,
cost of capital, etc.)
Attract more investment in natural resource
plants
More direct investment abroad
Ex: Gildan Activewear (E-Ethics 15.6 p. 321)
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
12
Special Challenges of
Global Business



Corruption: The abuse of entrusted power for
private gain (e.g., bribery)
Human rights: The fundamental rights and
freedoms to which all individuals, groups, and
societies are entitled (e.g., sweatshops).
Ex: Ethical sourcing at Hudson’s Bay
Company – Code of Vendor Conduct
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
13
The Acceptance of
Global Capitalism



Fair trade: Trading partnership which aims at
sustainable development for excluded and
disadvantaged producers (e.g., Fairtrade
Foundation, Oxfam, and Traidcraft)
Microfinance: Provision of financial products
such as micro-credit or micro-insurance to
people living in poverty (e.g., Grameen Bank
in Bangladesh)
Fortune at the Bottom of the Pyramid:
Applying business principles for social good
Chapter 15
Copyright © 2008 McGraw-Hill Ryerson Ltd.
14