THE IMPACT OF GLOBALIZATION ON INDIVIDUALS, COMPANIES AND ON
BUSINESS INFORMATION SYSTEMS – PERSPECTIVES OF THE ECONOMIC
CRISIS
Lect. univ. dr. Popescu Veronica Adriana
Academia Comercială Satu – Mare
Satu – Mare /Romania
Prof. univ. dr. Popescu N. Gheorghe
Academia de Studii Economice
Bucharest /Romania
popescu_gh_cafr@yahoo.com
Abstract
The paper called “Impact of Globalization on Individuals, Firms and Business
Information Systems – the perspective of the Economic Crisis” has the aim of presenting
New Economy’s nowadays problems as a result of the global economic crises.
The questions we are trying to find the answers for, in our analyses, are as fallows: “Which
is the impact of globalization on Individuals, Firms and Business Information Systems?”,
“Is the global economy going threw a period of crises?” and “In what way globalization
and the global economic crises will affect humanity?”. We believe that, before everything,
the delimitation of the historical background is essential nowadays, and that is because of
the extent of the globalization phenomenon at the world’s level and afterwards we analyzed
the theoretical aspects regarding the global economic crises and in what way it will affect
individuals, firms and business information system and, at the end of our presentation, we
will put a diagnostic at the global economic level.
Keywords
Economic crises, globalization, business information systems.
INTRODUCTION
The paper with the subject “The impact of globalization on individuals, companies and
on business information systems – perspectives of the economic crisis” aims to approach
the current problems of the New Economy as a result of the global economic crisis.
The questions which we intend to find the answer in our material are as follows: “What is
the impact of globalization on individuals, companies and business information
systems?”, “Is the global economy in crisis?” and “How does globalization and the
global economic crisis will affect the world?” Above all, we consider to be essential the
demarcation of the historical frame of where we are today, as a consequence of expanding
the globalization phenomenon in the world, and then to analyze theoretically what does the
global crisis represent and how will affect individuals, firms and the business information
systems and, at the end, we shall put a “diagnosis” on the global economy.
1. THE GLOBAL ECONOMY GOES BEYOND THE LIMITS OF
TECHNOLOGY. THE GLOBAL ECONOMY INVOLVES THE
GLOBALIZATION OF INDIVIDUALS
Globalization must be seen today as being beyond technology, meaning that it implies, at
the same time, something more profound and complex, namely the globalization of
individuals. Due to new techniques and global technologies, it has come to a contraction of
time and space, which allowed mankind to conduct transactions anywhere in the world in
real time. At the same time, the globalization of individuals must mean responsibility and
responsibility must be closely related to the development of individuals, respectively
individuals’ responsibility towards their own development, awareness of limits, which once
exceeded, must be followed by new rules and values, firmer and more complex than those
so far. Here's how Thomas Friedman explains the phenomenon of globalization of
individuals: “Globalization has gone from the globalization of companies to the
globalization of individuals. (...) This sense of responsibility towards their own
development is going further today than ever before. In many global industries you are
forced to prove every day that you deserve your job by the value you create and the unique
skills that you can put in play. And if you do not succeed, your job can fly further and faster
than ever.” (Friedman, Thomas L. (2007))
Globalization has brought with it the idea that anything can be marketed, nowadays there are
no more things that can not be marketed: “Let’s not fool ourselves: we live in a world in
which more and more things are marketable. (...) At any time, the available technology especially transportation and communications - largely determines which goods and
services are easy to be marketed at international level and which are difficult or
impossible to market. Simplifying this elementary fact, economy theorists are generally
transposing the goods and services worldwide as integrating into two broad categories:
"marketable" and "unmarketable".” (Friedman, Thomas L. (2007))
The only problem that will appear within the new context will be the ability to sell more
goods and services electronically, the distinction being made between the electronic services
that can be marketed over long distances without being affected in any way and those which
can not be marketed over long distances as their quality will be affected to some extent:
“(...) In the future - and to some extent already in the present - the main distinction in
international trade will not be made between things that can be put in a box and the
others. However we shall distinguish, between services that can be provided electronically
over long distances without the loss of quality (or with minimal loss) and the others. The
fact that a wide range of services are becoming marketable is, as they say, all the rage. And
we can be pretty sure that the share of services that can be provided electronically will
increase.” (Friedman, Thomas L. (2007))
Globalization of individuals also involves a better and broader understanding of human
behaviour and the way people perceive certain events. The individuals’ challenge to cope
with the changes occurred within the new global context is inherent, but what really show
interest are the way in which the change will affect the thinking of individuals, the concepts
so far, life and everyday activities. We are also interested in “(...) the way we nourish the
right hemisphere as properly as the left one”, a fact that results from the following:
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Great specialists from today, from the field of psychology and psychoanalysis,
believe that the current evolution induced by the globalization phenomenon, will
largely affect individuals' lives. They have demonstrated that at the same time with
the new changes generated by the context of globalization, a series of phenomena
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will take place at the individual’s thought level. However, the so complex structure
of the human brain will be able to help the individual explain the way in which time
and space act on thinking and his life: “Those two hemispheres work in
collaboration and we use them simultaneously in almost everything we do. But the
structure of our brain can help us to better explain the patterns of the time we’re
living.” (Friedman, Thomas L. (2007))
Specialists have demonstrated that the overwhelming element in determining certain
stages in the life of the individual is the human motivation. Inner motivation is the
one that is causing the individual to act in a certain sense and take the main decisions
of life, career, and the idea to attend certain studies. Globalization of the economy
will be profoundly influenced by the extent to which the inner motivation will act on
globalization of individuals as part of the current complexity generated by the New
Economy: “The types of skills that are becoming now most important are turning to
be the same activities that people are devoting to from inner motivation. Relatively
few people become accountants from inner motivation. (...) but exactly the inner
motivation is the one that makes us become creative and empathic, designers and
good narrators, advisers and consultants.” (Friedman, Thomas L. (2007))
The specific features of the individual are related to his many interests, which
generates his need to communicate, to be more sociable, to depend on someone from
outside to get help when needed, to study certain subjects, as his knowledge degree
leads him to certain areas of interest: “The idea was that people who have multiple
interests are more talkative, more sociable, they know how to easily ask for help
when they need, they know to help others who need support, they can think
horizontally, they know how to link things from different disciplines and fields.”
(Friedman, Thomas L. (2007)) Globalization of individuals becomes closely linked to
their inner feelings, the level of knowledge required by society, the passage of time
and the access to new techniques and technologies. The lives of individuals must be
seen and then analyzed in line with globalization, because each new interest of the
individual is the consequence of what is happening around him
Globalization of individuals must primarily take into account, the access to new
technologies and techniques. Science is the one who manages to open new horizons
for each individual in part and maybe that is why each individual has decided to
specialize solely on a particular branch, taking into account his own interests and
having a number of reasons: “We are surrounded by a true ocean of science (...) and
this type of international division of labour is very logical.” (Friedman, Thomas L.
(2007)) The conclusion that one must draw from here is that technique and
technology in the current context of globalizing the individuals are those which have
caused a division of labour so obvious and visible and with a so great impact on the
level of society.
Globalization of individuals will also mean their desire to have access to increased
income. This will be possible in the extent to which each individual will tend to
improve his position trying to continue his education throughout life: “Both
technology and trade increase the general level of income – they make the global
"cake" bigger - but they tend to fluctuate in favouring the labour force with high
qualification, to the detriment of that with low qualification.” (Friedman, Thomas L.
(2007)) The access to a better education will obviously favour certain categories of
individuals, who will become increasingly better paid and will occupy positions
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increasingly well seen and most favourable within society. Metaphorically speaking,
the access to better education and a high qualification will also generate
simultaneously the access to a “bigger and better slice of the global cake.”
Another perspective that must be taken into account is that the inherent change
generated by the phenomenon of globalizing the individuals will lead, inevitably, to
their mobilization in order to cope with the change, without being excluded from
society and without being left behind. This was synthesized extremely well with the
help of the following quote: “Will Rogers said it long ago: "Even if you are on the
right track, someone will step on you if you’re just staying there." The more the
world becomes, the faster this thing will happen." (Friedman, Thomas L. (2007))
The globalization of individuals highlights the reluctance and fear of many of them
to change. It known the fact that the prospect of change can generate panic among
individuals and this is based on many factors: the existence stages they have gone,
the education they had access to when they were young, the genetic baggage they
have, the family they are part of, their age, the country or geographical region where
they are, the requirements that exist in the labour market in the country in which they
work, their opening to new, etc… Therefore, one can say that: “Everyone wants
economic growth, but nobody wants change.” (Friedman, Thomas L. (2007))
Analyzing the induced perspective of the globalization of individuals and taking into
account its defining elements, respectively their change in thinking, enhancing the human
motivation, determining and redefining their many interests, the access to a wide range of
information and an increase of the global division of labour, the desire to own an amount of
money as high as possible as a result of better educational training, the idea to cope with
change and to be perpetually in an advantageous position, the fear of new and of change, we
can say that it is in our power to create the civilization we want. The idea that one must
remember is that every individual has the power to change the future, each individual is part
of this new universe, and the desire to generate creative energy to lead a better life is a given
course of nature, a natural feeling to be followed and supported by present and future
generations.
2. THE GLOBAL ECONOMY GOES BEYOND TECHNOLOGY.
THE GLOBAL ECONOMY INVOLVES THE GLOBALIZATION
OF THE COMPANIES
It is essential that companies (regardless of their size or area in which they are), in turn, to
be prepared for change and to be open to new: “If you want to flourish in a flatten world,
you’d better understand that anything that can be done will be done - and much faster
than you think. The only question is whether you will do something or you will just be the
object of this something. You will be the one who will drive the innovation or one of your
competitors will use it as a vehicle to pass over you with.” (Friedman, Thomas L. (2007))
The key to success within the process of “flattening the world” is to understand the speed at
which things come to happen. Due to the rapid development globally, speed is the main
distinctive element: the speed with which an individual can obtain access to a certain vital
information for him, the speed with which a new product can be launched and promoted in a
market, the speed with which an innovation can be born within the research-development
department, the speed with which an individual may face competition, the speed with which
humanity can face novelty and can absorb them to be able to generate progress and
diversity.
The companies are those which will face, in turn, the new innovative elements imposed by
globalization and will have to find a new pace of development much more quickly, to
maintain on the market. The idea is that, for a company to be competitive, it must meet a
series of rules and strategies, being able to process the novelty in a fast pace and to learn at
the same time from the neighbouring companies as well.
We shall emphasize some of the rules and strategies of successful companies (Friedman,
Thomas L. (2007)):
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Rule no. 1: “When the world goes flat - and you are feeling flattened - reach for a
shovel and dig inside yourself. Don't try to build walls.” The first rule is that no
company should oppose the changes arising from the “flattening the world”. The
success of a company is given by the extent in which it will perceive and will rapidly
absorb the novelty, without opposing. “To be against the stream” would be the
largest and most serious mistake that a company could make in the process of
globalization.
Rule no. 2: “And the small shall act big.” In an era of globalization, the change will
affect both small and large companies and the key to success of the small companies
would be to learn to perceive the things in the manner in which the large companies
do, in order to learn from those that are better than them and to be able to develop
their business in time. Here is why: “One way small companies flourish in the flat
world is by learning to act really big. And the key to being small and acting big is
being quick to take advantage of all the new tools for collaboration to reach farther,
faster, wider and deeper.” Speed is vital to the success of a company, regardless of
its size.
Rule no. 3: “And the big shall act small.” Metaphorically speaking, companies will
learn in the era of globalization “to act small”, in other words to pay attention to the
smallest detail, while their customers will learn “to act big”, meaning to have
increasingly bigger pretensions and expectations. This can be explained best as
follows: “One way that big companies learn to flourish in the flat world is by
learning how to act really small by enabling their customers to act really big.”
“Perception” is the key to success in an era of globalization: if a company is
perceived by its customers as being successful, will have a tremendous advantage
and will increase its profits further, if, however, opposed to the above concept, a
company is perceived as being mediocre, will be lost and, in time, due to decreasing
profits, will have to leave the market or to readapt its field of activity.
Rule no. 4: “The best companies are the best collaborators.” During the era of
globalization, competition becomes so great that there is the idea according to which
the solution is to use collaborators. Collaboration may be within the company,
through the relations between individuals and their motivation, or by working with
business partners outside the company: “In the flat world, more and more business
will be done through collaborations within and between companies, for a very simple
reason: The next layers of value creation - whether in technology, marketing,
biomedicine, or manufacturing - are becoming so complex that no single firm or
department is going to be able to master them alone.” Due to the rapid pace of
development, no company will be able to maintain the same parameters and respond
promptly to consumer needs, without benefiting of help from competitors. Aid may
come, for example by increasing the collaboration between companies, which will
determine companies to maintain on the market instead of them to disappear.
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Rule no. 5: “In a flat world, the best companies stay healthy by getting regular
chest x-rays and then selling the results to their clients.” Rule no. 5 contains, in
turn, a series of figurative elements. The idea would be that any successful company
should self evaluate only as often as possible and to report within the market
competition, first to itself and then to other companies. The new era of globalization
sustains the idea according to which the competition must be initiated and taken, first
of all, with yourself, and then, with others.
Rule no. 6: “The best companies outsource to win, not to shrink.” The
globalization of the business world brought along the outsourcing process. More and
more companies are forced to resort to this process: “They outsource to innovate
faster and more cheaply in order to grow larger, fain market share and hire more
and different specialists - not to save money by firing more people.” Outsourcing is
aimed at economic growth and holding a market share as more advantageous.
However, this also requires access to a greater number of specialists to provide a
company new ideas and to enable the creation of new innovations. From here, the
concept: “When there are things for sale, you tend to buy more.” A technique of the
great producers is to give their customers the opportunity to have access to products
they never thought they would need. It is one of the most powerful strategy
techniques based on the concept that a company must provide its customers, to be
truly innovative, even products whose necessity was not even felt at that time by
consumers.
Rule no. 7: “Outsourcing (...) is also for idealists.” “The idealists” are those that
still dream that a company may be on the market, even in the conditions in which it
refuses external support from the collaborators, from neighboring companies, etc...
Their view must be changed radically, and the proposed solution is that of
outsourcing.
CONCLUSIONS
Within our paper titled “The impact of globalization on individuals, companies and on
business information systems – perspectives of the economic crisis” we have approached
the problems of today's New Economy as a result of the global economic crisis, taking into
account the impact of the phenomenon of globalization, a phenomenon which has known
until now, an unprecedented development. What is of note in our analysis, is that
globalization as a complex phenomenon of the New Economy, goes beyond the until
recently existing borders, assuming today's globalization of individuals (primarily), of
companies, of information systems and basic areas of society such as economic, financial accounting, financial-economic analysis , statistics, management, marketing, politics and
human resources.
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