COURSE: GLOBAL BUSINESS MANAGEMENT
MGT610
DR. DIMITRIS STAVROULAKIS
PROFESSOR OF HUMAN RESOURCE MANAGEMENT
DEPT OF ACCOUNTING
TEI OF PIRAEUS
Unit 1: Globalization
GLOBALIZATION: A term invented in the 80s
Globalization is a process of interaction and integration
among the people, companies, and governments, driven by
international trade and investment and aided by information
technology. This process has effects on the environment, on
culture, on political systems, on economic development, and
on well-being in societies around the world.
(www.globalization101.org)
Globalization of markets: Separate national markets tend to
converge into one global marketplace in which the tastes and
preferences of consumers in different locations tend to be
unified upon some global norm.
Ancient origins of globalization
“I am not an Athenian or a Greek, but a citizen of the
world.”
Socrates
>2,000 years ago
History of globalization
 It was through trade that ancient civilizations
came to contact.
 Ancient trade routes have ceased to exist (e.g.
between Crete and Egypt) and new ones have
been established.
 Trade routes have always existed, but
nowadays distance has been minimized: It
takes less than 3 days to cover the globe, e.g.
Athens - N. York - LA - Tokyo - Moscow Athens.
The Shrinking Globe
1500-1840
Horse-driven carts,
sailing ships, 10mph.
1850-1930
Steam locomotives average 65mph.
Steamships average 36mph.
1950s
Propeller aircraft
300-400 mph.
1960s
Jet passenger aircraft
500-700mph.
History of globalization (cont)
 Traits of globalization can be
traced to as far back as the
Roman Empire
 The Silk Road started in
China, reached portions of
the Parthian Empire and
ended in Rome
 The trade route helped to
integrate the three
economies of the Han
Dynasty, Parthian and
Roman Empires.
Commercial pathways of the past
The global production highways
President Obama’s views
on globalization
 Obama believes
globalization will
continue to be
beneficial to the U.S. if
it pursues multilateral
trade agreements
judiciously
 He believes that
globalization will
continue with or
without the U.S. being
a main participant
 He believes we must
“embrace” globalization
President Obama’s views on
globalization (Cont.)
“ There are some who believe that we must try to turn back
the clock on this new world; that the only chance to
maintain our living standards is to build a fortress around
America; to stop trading with other countries, shut down
immigration, and rely on old industries. I disagree. Not
only is it impossible to turn back the tide of globalization,
but efforts to do so can make us worse off. Rather than
fear the future, we must embrace it. I have no doubt that
America can compete--and succeed--in the 21st century.
And I know as well that more than anything else, success
will depend not on our government, but on the dynamism,
determination, and innovation of the American people.”
Viewpoints on globalization
“Globalization is an irreversible process,
not an option… it is a positive force,
but it is also blind and therefore
needs to be carefully harnessed.”
Kofi Annan, UN Secretary General
Globalization and McDonaldization
 George Ritzer (2004), defines McDonaldization as the
process by which the principles of the fast food
restaurant are coming to dominate more and more
sectors of American society as well as the rest of the
world (p.1).
 The principles of this system (Ritzer, 2004), are:
Efficiency, Calculability, Predictability, and Control
through Nonhuman Technology (p.6 – 15). In essence,
it’s fast, uniform, and reliable.
Viewpoints on globalization
Factors involved in globalization
Dimensions of globalization
 Technological: IT, Biomedical, Green, Robotics
 Population: Unbalanced Growth, Aging,
Immigration
 Economic: Commercial, Industrial,
Communications, Services
 Financial: Flexibility of capital, Investments,
Banking
 Political: International Law and Regimes,
Alliances, Nuclear Powers, Rising Powers
 Cultural: Monoculturism, Cultural Imperialism
Benefits of globalization
 Consumer satisfaction: Lower prices,
variety of products
 Technological progress
 Facilitation of communications and
networking
 Higher standard of living
Negatives of globalization
 Environmental: Global Warming, Deforestation
 Working conditions: Exploitation, Child
Labor
 Health: Pandemics, Potable Water, AIDS/HIV,
Malaria
 Resources: Water, Food and Agriculture, Fuels,
Minerals
 Terrorism: Religious, Ethnic, National
 Crime: Organized Crime, Corruption, Drug
Trafficking, Piracy, Immigrant Trafficking,
Money Laundering
Lots of people question globalization
Globalization
is forcing my
child to work.
.
Free trade
is destroying
us farmers.
Hollywood
is ruining
our
children.
Development
is destroying
our rain forest.
Industrial
countries are
leaving us out
of Globalization.
We have 50
million people
living in poverty.
Cultural
imperialism ?
No normal distribution for poverty
Geography of poverty
Eurobarometer 2010:
Attitudes toward entrepreneurship in EU
Eurobarometer 2010:
Attitudes toward entrepreneurship in EU
Human Development indicators
Human development index
Classification of countries: The Core
 Industrialized capitalist countries
 Centers of trade, technology &
productivity.
 Examples: Western Europe, North
America, Japan, Australia
 Export to the Periphery and Semi-
periphery.
The Semi-periphery
 Partially industrialized ex-colonial
countries.
 Both exporters and importers of goods.
 Examples: South Africa, Brazil, Mexico, etc.
(parts of India, China?)
The Periphery
• Poor, ex-colonial nations.
• Tend to export resources and labor.
• Examples: Kenya, Bolivia, Pakistan,
etc.
Measuring Globalization
A.T. Kearney: Globalization Index
covering 72 countries
 Political engagement - Membership and
involvement in international organizations
 Technological connectivity – Internet users,
hosts and secured servers
 Personal contact
- International tourism,
telephone traffic, transfer of money)
 Economic integration – Trade, FDI, portfolio
capital flows, and investment income
Political
Technological
Personal
Economic
World Population Growth 1750
to 2050
9
8
7
6
5
Billions
4
3
2
1
0
1750
1800
1850
1900
1950
2000
2050