Broadening the Debate:
The Pros and Cons of Globalization
Joyce Osland
Journal of Management Inquiry
Introduction to Globalization
• 15th century
– New trade routes
• WWII
– International Monetary Fund
• World Trade Organization
– Reduce trade barriers
– Stimulate Globalization
Recent Trends
• Technological growth
• Recent protests
Opposing Views
• Proponents
– Opportunity for economic growth and
prosperity
• Opponents
– Threat to prosperity, political sovereignty,
cultural integrity, and the environment
Definition of Globalization
• Disagreement over definition
– Can be framed in a variety of ways
• Definition for this purpose
– “A process leading to greater economic
interdependence and networks and the
economic, political, social, cultural, and
environmental results of that process.”
Purpose of the Article
• Impact of globalization on other areas in
the broader system…a systems view
• Objective analysis of benefits and liabilities
• Common stakeholder perspectives
• Impact of globalization on:
– Equality, labor conditions, governments,
culture and community, and the environment
Positive Effect of Globalization
on Equality
•Income increased globally
•Increased wages for well educated
•Increased wages for technologically skilled
•Improved economic conditions for those who
compete successfully in the global economy
•Increased access to more goods
•Reduced prices duet to competition
Negative Effect of Globalization
on Equality
• Greater gap between the haves and the havenots
• Some downward pressure on wages for the
poorly educated and technologically unskilled
• Worsened economic conditions in countries
marginalized from the global economy.
Positive Effect of Globalization
on Labor Conditions
•
•
•
•
•
Increased job opportunities
Upgraded education system and more training
Increased labor standards
Increased labor productivity
CNN effect pressures firms to correct labor
abuses
Negative Effect of Globalization
on Labor Conditions
• Certain industries were forced out of business
• Decreased labor conditions, forced over time,
etc
• Decreased power of unions, benefits, and
pensions
Globalization and Culture
•
•
•
•
Greater cross-cultured understanding
Double edged sword
Monoculture
Other views of decentralization
– Regional centers
• Ethical identity
Environmental Sustainability
• Meeting needs without compromising the
ability of future generations
• Positive side
• Negative side
Globalization and Governments
• Historically, governments played a major
role in the promotion of economic
development
• Currently, governments have less to do
with the economic development within
their borders
Technology, Governments, and
Globalization
•
Technology has allowed businesses to
move and change so fast that
governments can’t keep up
•
Technology has also helped break down
the market boundaries, making it a losing
battle for governments to try to control
them
Positive and Negative Impacts on
Governments because of Globalization
•
•
•
•
•
Positives
Infrastructure
Jobs
Economic
Development
Improved
management
techniques
Less wars?
•
•
•
•
Negatives
Lower labor
standards
Private vs. public
goods
Less government
programs
Smaller tax base
Lessons Learned
• Expanded boundaries shows good and
bad
• Impact is “mixed”
– Must consider tradeoffs
• Understand different assumptions for more
objective discussions
• Take a systems approach
• The need to “tame” globalization
United Nations’ Global Compact
• Response to globalization
• Aims to “create a more stable, equitable,
and inclusive global market by making its
nine principles an integral part of business
activities everywhere.”
• Nine points
– Human rights, labor standards, and
environmental practices
Global Compact Now
• 3,200 business participants in 94 countries
• Added a tenth point on anti-corruption
• Participation and implementation lag is
some markets including the U.S.
• New challenges:
– Motivate companies
– Deepen engagement by companies
– Increased penetration in emerging economies