Unit I Globalization-Concept, process and Development
Globalization
Globalization deals with all aspects of different countries ie Political, economic, social and
cultural aspects
“an immense enlargement of world communication and a world market” (Fredric Jameson)
Updated Frankfurt School view
capitalist market spreads everywhere the negative consequences of capitalism spread globally
the intensification of world-wide social relations” (Anthony Giddens)
“stretching” of social relations across the globe , communications and media technologies
“the compression of the world and the intensification of consciousness of the world as a whole”
(Roland Robertson)
world becomes “smaller”
world is experienced as “one place”
Globalization (or globalisation) is the process of international integration arising from the
interchange of world views, products, ideas, and other aspects of culture. Advances in
transportation and telecommunications infrastructure, including the rise of the telegraph and its
posterity the Internet, are major factors in globalization, generating further interdependence of
economic and cultural activities. Source: Wikipedia
Accordind to ECWA , UN – (Economic and Social Commission for Western Asia )
Globalization is a widely Used term that can be defind in many ways In Economic Way It is the
reduction and removal of barriers between national borders in order to facilitate the flow of
Goods , Capital, Services and Labour
Phenomena in Globalization
1) Whole world interconnected - interdependence of all parts of world
2) Intensification of world-wide phenomena
3) Trans-national relations - erosion of national boundaries
4) “Domino effects” (Chain reaction of Change)- events have long-distance ramifications
5) Alteration of space- distances shortened- technological changes
6) Alteration of time - things happen quicker
7) Sense of “globality” / Global consciousness - experience all places as interdependent
- “the whole planet”- “the whole of humankind”
Globalization (or globalisation) is the process of international integration arising from the
interchange of world views, products, ideas, and other aspects of culture.[1][2] Advances in
transportation and telecommunications infrastructure, including the rise of the telegraph and its
posterity the Internet, are major factors in globalization, generating further interdependence of
economic and cultural activities.[3]
Though scholars place the origins of globalization in modern times, others trace its history long
before the European age of discovery and voyages to the New World. Some even trace the
origins to the third millennium BCE.[4][5] In the late 19th century and early 20th century, the
connectedness of the world's economies and cultures grew very quickly.
The term globalization has been increasingly used since the mid-1980s and especially since the
mid-1990s.[6] In 2000, the International Monetary Fund (IMF) identified four basic aspects of
globalization: trade and transactions, capital and investment movements, migration and
movement of people, and the dissemination of knowledge.[7] Further, environmental challenges
such as climate change, cross-boundary water and air pollution, and over-fishing of the ocean are
linked with globalization.[8] Globalizing processes affect and are affected by business and work
organization, economics, socio-cultural resources, and the natural environment.
he term globalization is derived from the word globalize, which refers to the emergence of an
international network of social and economic systems.[10] One of the earliest known usages of
the term as a noun was in a 1930 publication entitled, Towards New Education, where it
denoted a holistic view of human experience in education.[11] A related term, corporate
giants, was coined by Charles Taze Russell in 1897[12] to refer to the largely national trusts
and other large enterprises of the time. By the 1960s, both terms began to be used as synonyms
by economists and other social scientists. Economist Theodore Levitt is widely credited with
coining the term in an article entitled "Globalization of Markets", which appeared in the May–
June 1983 issue of Harvard Business Review. However, the term 'globalization' was in use well
before (at least as early as 1944) and had been used by other scholars as early as 1981.[13] Levitt
can be credited with popularizing the term and bringing it into the mainstream business audience
in the later half of the 1980s. Since its inception, the concept of globalization has inspired
competing definitions and interpretations, with antecedents dating back to the great movements
of trade and empire across Asia and the Indian Ocean from the 15th century onwards.[14][15]
Due to the complexity of the concept, research projects, articles, and discussions often remain
focused on a single aspect of globalization.[1]
Roland Robertson, professor of sociology at University of Aberdeen, an early writer in the field,
defined globalization in 1992 as:
...the compression of the world and the intensification of the consciousness of the world as a
whole.[16]
Sociologists Martin Albrow and Elizabeth King define globalization as:
...all those processes by which the peoples of the world are incorporated into a single world
society.[2]
In The Consequences of Modernity, Anthony Giddens uses the following definition:
Globalization can thus be defined as the intensification of worldwide social relations which
link distant localities in such a way that local happenings are shaped by events occurring many
miles away and vice versa.[17]
In Global Transformations David Held, et al., study the definition of globalization:
Although in its simplistic sense globalization refers to the widening, deepening and speeding
up of global interconnection, such a definition begs further elaboration. ... Globalization can be
located on a continuum with the local, national and regional. At one end of the continuum lie
social and economic relations and networks which are organized on a local and/or national basis;
at the other end lie social and economic relations and networks which crystallize on the wider
scale of regional and global interactions. Globalization can refer to those spatial-temporal
processes of change which underpin a transformation in the organization of human affairs by
linking together and expanding human activity across regions and continents. Without reference
to such expansive spatial connections, there can be no clear or coherent formulation of this term.
... A satisfactory definition of globalization must capture each of these elements: extensity
(stretching), intensity, velocity and impact.[18]
Swedish journalist Thomas Larsson, in his book The Race to the Top: The Real Story of
Globalization, states that globalization:
is the process of world shrinkage, of distances getting shorter, things moving closer. It pertains
to the increasing ease with which somebody on one side of the world can interact, to mutual
benefit, with somebody on the other side of the world.[19]
The journalist Thomas L. Friedman popularized the term "flat world", arguing that globalized
trade, outsourcing, supply-chaining, and political forces had permanently changed the world, for
better and worse. He asserted that the pace of globalization was quickening and that its impact on
business organization and practice would continue to grow.[20]
Economist Takis Fotopoulos defined "economic globalization" as the opening and deregulation
of commodity, capital and labor markets that led toward present neoliberal globalization. He
used "political globalization" to refer to the emergence of a transnational elite and a phasing out
of the nation-state. "Cultural globalization", he used to reference the worldwide homogenization
of culture. Other of his usages included "ideological globalization", "technological globalization"
and "social globalization".[21]
Manfred Steger, professor of Global Studies and research leader in the Global Cities Institute at
RMIT University, identifies four main empirical dimensions of globalization: economic,
political, cultural, and ecological, with a fifth dimension - the ideological - cutting across the
other four. The ideological dimension, according to Steger, is filled with a range of norms,
claims, beliefs, and narratives about the phenomenon itself.[22]
In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization:
trade and transactions, capital and investment movements, migration and movement of people
and the dissemination of knowledge.[7] With regards to trade and transactions, developing
countries increased their share of world trade, from 19 percent in 1971 to 29 percent in 1999.
However, there is great variation among the major regions. For instance, the newly industrialized
economies (NIEs) of Asia prospered, while African countries as a whole performed poorly. The
makeup of a country's exports is an important indicator for success. Manufactured goods exports
soared, dominated by developed countries and NIEs. Commodity exports, such as food and raw
materials were often produced by developing countries: commodities' share of total exports
declined over the period.
Development of Globalization
The historical origins of globalization are the subject of on-going debate. Though several
scholars situate the origins of globalization in the modern era, others regard it as a phenomenon
with a long history. Some authors have argued that stretching the beginning of globalization far
back in time renders the concept wholly inoperative and useless for political analysis.[1]
Archaic globalization[edit]
Main article: Archaic globalization
Perhaps the most extreme proponent of a deep historical origin for globalization was Andre
Gunder Frank, an economist associated with dependency theory. Frank argued that a form of
globalization has been in existence since the rise of trade links between Sumer and the Indus
Valley Civilization in the third millennium B.C.[2] Critics of this idea contend that it rests upon
an over-broad definition of globalization.
Thomas L. Friedman divides the history of globalization into three periods:
Globalization 1 (1492–1800), involved the globalization of countries
Globalization 2 (1800–2000) and 2 involved the globalization of companies and Globalization
Globalization 3 (2000–present). involves the globalization of individuals.
Proto-globalization[edit]
Main article: Proto-globalization
The next phase is known as proto-globalization. It was characterized by the rise of maritime
European empires, in the 16th and 17th centuries, first the Portuguese and Spanish Empires, and
later the Dutch and British Empires. In the 17th century, globalization became also a private
business phenomenon when chartered companies like British East India Company (founded in
1600), often described as the first multinational corporation, as well as the Dutch East India
Company (founded in 1602) were established.
Modern globalization
19th century Great Britain become the first global economic superpower, because of superior
manufacturing technology and improved global communications such as steamships and
railroads.
The 19th century witnessed the advent of globalization approaching its modern form.
Industrialization allowed cheap production of household items using economies of scale,[citation
needed] while rapid population growth created sustained demand for commodities. Globalization
in this period was decisively shaped by nineteenth-century imperialism. After the First and
Second Opium Wars, which opened up China to foreign trade, and the completion of the British
conquest of India, the vast populations of these regions became ready consumers of European
exports. It was in this period that areas of sub-Saharan Africa and the Pacific islands were
incorporated into the world system. Meanwhile, the conquest of new parts of the globe, notably
sub-Saharan Africa, by Europeans yielded valuable natural resources such as rubber, diamonds
and coal and helped fuel trade and investment between the European imperial powers, their
colonies, and the United States.[12]
The inhabitant of London could order by telephone, sipping his morning tea, the various
products of the whole earth, and reasonably expect their early delivery upon his doorstep.
Militarism and imperialism of racial and cultural rivalries were little more than the amusements
of his daily newspaper. What an extraordinary episode in the economic progress of man was that
age which came to an end in August 1914.
Between the globalization in the 19th and in the 20th there are significant differences. There are
two main points on which the differences can be seen. One point is the global trade in this
centuries as well as the capital, investment and the economy.
Global Trade
The global trade in the 20th shows a higher share of trade in merchant production, a growth of
the trade in services and the rise of production and trade by multinational firms. The production
of merchant goods in the 20th century largely decreased from the levels seen in the 19th.
However, the amount of merchant goods that were produced for the merchandise trade grew. The
trade in services also grew more important in the 20th compared to the 19th century. The last
point that distinguishes the global trade in the 19th century compared to the global trade in the
20th century, is the extent of multinational cooperation. In the 20th century you can see a
"quantum leap" in multinational cooperation compared to the 19th century. Before the 20th
century began, there were just Portfolio investment, but no trade-related or production-relation
Direct investment.
Commercial integration has improved since last century, barriers that inhibit trade are lower and
transport costs have decreased. Multinational trade contracts and agreements have been signed,
like the General Agreement on Tariffs and Trade (GATT), North American Free Trade
Agreement (NAFTA), the European Union (EU) has been hugely involved in eliminating tariffs
between member states, and the World Trade Organization. From 1890 and up to WWI
instability in trade was a problem, but in the post war period there has mostly been economic
expansion which leads to stability. Nations have to take care of their own products; they have to
make sure that foreign goods do not suffocate their domestic products causing unemployment
and maybe social instability. Technological changes have caused lower transporting costs; it
takes just a few hours to transport goods between continents to-day, instead of weeks or even
months in the nineteenth century.
By consideration financial crisis one key difference is the monetary regime. In the 19th century it
occurred under the fixed exchange rates of the gold standard. But in the 20th century it took
place in a regime of managed flexibility. Furthermore in the 19th century countries had
developed effective lenders of last resort, but the same was not true at the periphery and
countries there suffered the consequences. A century later there was a domestic safety net in
most emerging countries so that banking panics were changed into situations where the debts of
an insolvent banking system were taken over by the government. The recovery from banking
crisis is another key difference. It has tended to begin earlier in the recent period than in the
typical crisis episode a hundred years ago. In the 19th century there were no international rescue
packages available to emerging economies. But in the recent period such rescues were a typical
component of the financial landscape all over the world.
The flows information were an important downside in the 19th century. Prior to the Transatlantic
cable and the Radiotelephone, it used to take very long for information to go from one place to
another. So this means that it was very difficult to analyze the information. For instance, it was
not so easy to distinguish good and bad credits. Therefore, the information asymmetry played a
very important role in international investments. The railway bonds serve as a great example.
There was also many contracting problems. It was very difficult for companies working overseas
to manage their operations in other parts of the world, so this was clearly a big barrier to
investment. Several macroeconomic factors such as exchange risks and uncertain monetary
policies were a big barrier for international investments as well. The accounting standards in the
U.S. were relatively underdeveloped in the 19th century. The British investors played a very
important role in transferring their accounting practices to the new emerging markets.[13]
Process of Globalization
Globalization, since World War II, is partly the result of planning by politicians to break down
borders hampering trade. Their work led to the Bretton Woods conference, an agreement by the
world's leading politicians to lay down the framework for international commerce and finance,
and the founding of several international institutions intended to oversee the processes of
globalization. Globalization was also driven by the global expansion of multinational
corporations based in the United States and Europe, and worldwide exchange of new
developments in science, technology and products, with most significant inventions of this time
having their origins in the Western world according to Encyclopædia Britannica.[17] Worldwide
export of western culture went through the new mass media: film, radio and television and
recorded music. Development and growth of international transport and telecommunication
played a decisive role in modern globalization.
These institutions include the International Bank for Reconstruction and Development (the
World Bank), and the International Monetary Fund. Globalization has been facilitated by
advances in technology which have reduced the costs of trade, and trade negotiation rounds,
originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led
to a series of agreements to remove restrictions on free trade.
Since World War II, barriers to international trade have been considerably lowered through
international agreements — GATT. Particular initiatives carried out as a result of GATT and the
World Trade Organization (WTO), for which GATT is the foundation, have included:
Promotion of free trade:
elimination of tariffs; creation of free trade zones with small or no tariffs
Reduced transportation costs, especially resulting from development of containerization for
ocean shipping.
Reduction or elimination of capital controls
Reduction, elimination, or harmonization of subsidies for local businesses
Creation of subsidies for global corporations
Harmonization of intellectual property laws across the majority of states, with more
restrictions
Supranational recognition of intellectual property restrictions (e.g. patents granted by China
would be recognized in the United States)
Cultural globalization, driven by communication technology and the worldwide marketing of
Western cultural industries, was understood at first as a process of homogenization, as the global
domination of American culture at the expense of traditional diversity. However, a contrasting
trend soon became evident in the emergence of movements protesting against globalization and
giving new momentum to the defense of local uniqueness, individuality, and identity.[18]
The Uruguay Round (1986 to 1994)[19] led to a treaty to create the WTO to mediate trade
disputes and set up a uniform platform of trading. Other bilateral and multilateral trade
agreements, including sections of Europe's Maastricht Treaty and the North American Free
Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and
barriers to trade.
World exports rose from 8.5% in 1970, to 16.2% of total gross world product in 2001.[20]
In the 1990s, the growth of low cost communication networks allowed work done using a
computer to be moved to low wage locations for many job types. This included accounting,
software development, and engineering design.
In late 2000s, much of the industrialized world entered into a deep recession.[21] Some analysts
say the world is going through a period of deglobalization after years of increasing economic
integration.[22][23] China has recently[when?] become the world's largest exporter surpassing
Advantages of Globalization:
1. Resources of different countries are used for producing goods and services they are
able to do most efficiently.
2. Consumers to get much wider variety of products to choose from.
3. Consumers get the product they want at more competitive prices.
4. Companies are able to procure input goods and services required at most competitive
prices.
5. Companies get access to much wider markets
6. It promotes understanding and goodwill among different countries.
7. Businesses and investors get much wider opportunities for investment.
8. Adverse impact of fluctuations in agricultural productions in one area can be reduced
by pooling of production of different areas.
9. Globalization helps in brining whole wolrd as one village. Every consumer have free
and frequent reach to the products of foreign countries.
10. Optimum use of natural resources possible.
11. Helpful in cost reduction by eliminating cross border duties and fees
12. Helpful in employment generation and income generation
Disadvantages of Globalization:
1. Developed countries can stifle development of undeveloped and under-developed
countries.
2. Economic depression in one country can trigger adverse reaction across the globe.
3. It can increase spread of communicable diseases.
4. Companies face much greater competition. This can put smaller companies, at a
disadvantage as they do not have resources to compete at global scale.
5. Globalization can ruin the environment. Moving things from one area to another
wastes oil, etc.
6. Globalization can ruin local economies. There is a movement that wants to buy local especially organic foods.
7. Globalization can lead to hyper-specialization, which can be good, but also negative.
There is something great about being a generalist. Also what if something goes wrong.
To know things generally give an incredible perspective that specialists do not have.
8. Globalization can be driven by people with "know how" and power and they can
systematically fleece the world.
9. Globalisation is direct attack on local tiny and small industry.
10. Global companies with hi-fi infrastructure almost ruins the local traditional small and
medium industries
11. Increases cut throat competition.
12. Globalisation increases monopoly by countries equiped with know-how and power.
Electronic Industry Citizenship Coalition Code of Conduct
Code of Conduct
The development of Dell's Supplier Principles was a key element of our commitment to work
with our suppliers in promoting sustainable practices. We launched these Supplier Principles
early in calendar year 2004 with involvement from our stakeholders. Initially, our focus was on
communication, awareness and education to ensure that suppliers understood Dell's expectations.
However, during this process, we realized that there was a tremendous opportunity to reduce
inefficiency and confusion by collaborating with industry partners. Therefore, when a coalition
of electronic manufacturers approached Dell to develop a joint industry code, we chose to
participate. The result of this unprecedented effort is the Electronic Industry Code of Conduct
(EICC) PDF Icon.
The code was developed among Dell, Hewlett-Packard (HP), International Business Machines
(IBM®) and the electronic manufacturers Solectron®, Sanmina-SCI®, Flextronics, Celestica™
and Jabil. Since the coalition’s inception, a number of brands and suppliers' companies have
joined the effort by supporting this common industry code. A coalition of technology companies
updates the EICC Code of Conduct periodically to reflect input from a wide variety of
stakeholder organizations.
In October 2005, the EICC Group established a partnership with the Global eSustainability
Initiative (GeSI), which represents information and communications technology (ICT)
companies in Europe, North America and Asia. The partnership was formed to develop common
implementation tools for supply-chain management and broaden the impact of this collaborative
effort.
This common implementation tool set includes:
A Supplier Risk Assessment for companies to evaluate the level of risk of a particular supplier in
the area of Corporate Responsibility
A Self Assessment Questionnaire that was released in early October 2005 and available in
multiple languages
A Common-Audit Methodology that suppliers, participant companies and approved thirdparty auditors can use to obtain the benefits of a common audit approach. The tool set includes
communication templates, supplier preparation guidelines, a facility audit question set, audit
report templates, and auditor guidelines and training modules
A web-based Platform to facilitate efficient and transparent information sharing among
participants
EICC Code Provisions
The EICC PDF icon contains provisions to address performance in the following areas:
Labor
Freely Chosen Employment
Working Hours
Humane Treatment
Freedom of Association
Child Labor Avoidance
Wages and Benefits
Nondiscrimination
Health and Safety
Occupational Safety
Occupational Injury and Illness
Physically Demanding Work
Dormitory and Canteen
Emergency Preparedness
Industrial Hygiene
Machine Safeguarding
Environment
Environmental Permits and Reporting
Hazardous Substances
Air Emissions
Pollution Prevention and
Resource Reduction
Wastewater and Solid Waste
Product Content Restrictions
Ethics
Business Integrity
Disclosure of Information
Fair Business, Advertisement and Competition Community
No Improver Advantage
Intellectual Property
Protection of Identity
Management Systems
Company Commitment
Legal and Customer Requirement
Performance Objectives with Implementation Plan and Measures
Training
Worker Feedback and Participation
Corrective Action Process
Management Accountability and Responsibility
Risk Assessment and Risk
Management
Communication
Audits and Assessments
Documentation and Records
Through this industry collaborative effort, we expect to obtain the following benefits:
Improved working conditions where workers are treated with dignity and respect
Increased efficiency and less duplication of efforts (suppliers can concentrate on driving
change and improvement instead of responding to different customer-audit requests)
Greater industry alignment and understanding of best practices
Industry-wide stakeholder engagement
Benchmarking best practices for supply-chain implementation in our industry
Dell and Dell's suppliers are required to comply with all applicable laws and regulations where
business is conducted. In addition, they are to embrace high standards of ethical behavior and
treat their employees fairly, and with dignity and respect, consistent with local law and the
Electronics Industry Citizenship Coalition (EICCode of Conduct.
Supplier Global Citizenship Commitment Because businesses face many uncertainties in this
rapidly changing global market, establishing genuine dialogue with workers enables both
workers and employers to understand each other's problems better and find ways to resolve them.
Dell and its suppliers are to respect the rights of workers, as established by local law, to associate
freely on a voluntary basis, seek representation, join or be represented by works councils, and
join or not join labor unions and bargain collectively as they choose. As provided by the law,
employees who become worker representatives shall not be the subject of discrimination and
shall have access to management and co-workers to carry out their representative functions.
Workers shall be able to communicate openly with management regarding working conditions
without fear of reprisal, intimidation or harassment.
Basic worker rights to open communication, direct engagement, and humane and equitable
treatment must be respected even in countries where they are not given meaningful legal
protection. Where worker representation and collective bargaining are restricted by law,
participants are to facilitate open communication and direct engagement between workers and
management as alternative ways of ensuring that workers' rights, needs and views are considered
and acted upon appropriately and in good faith.
Our suppliers are requested to provide documented evidence of their commitment to
implementation of our Supplier Principles through a self-assessment tool, which utilizes the
criteria given below. We utilize the industry-standard tools that have been developed by the
Electronic Industry Citizenship Coalition and the Global eSustainability Initiative (GeSI) Self
Assessment Questionnaire.
Commitment and Policy: The supplier's executive management has reviewed and signed Dell's
Global Citizenship Commitment Letter. The supplier has a responsible party leading internal
Global Citizenship program, reporting directly to CEO. In addition, the supplier has evidence of
company policy or principles stating commitment to Global Citizenship aligned with Dell's
Supplier Principles for Labor Rights.
Implementation and Operation: The supplier has a Global Citizenship program in place, and
there is evidence of training programs to communicate company policy and commitment to the
program.
Self Monitoring and Corrective Action: The supplier has evidence of periodic internal audits
and corrective, preventive action plan that includes verification of Labor Rights program
compliance.
Performance Indicators: The supplier has evidence of periodic monitoring and measuring
system to ensure progress to Labor Rights program goals.
Management Review and Continuous Improvement: The supplier has evidence of
management review that includes at minimum: Effectiveness of Global Citizenship program
including Labor Rights), progress to goals, audit findings, policy, continuous improvement and
views of interested parties.