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Cross cultural management - Globalization

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  1. Globalization: theories.
    1. Mercantilism.
    2. Classical trade theory.
    3. Product life-cycle theory and international investment.
  2. Globalization: origins and benefits.
    1. Macro-level of analysis.
    2. Globalization: facts and figures.
    3. What enabled globalization ?.
  3. The Limits of globalization.
    1. The direct costs of globalization.
    2. The increase of disparity between developped and developping countries.
    3. The problem of democracy.
    4. The ecological environment and lasting development.

Globalization is a very up-to-date and highly debated topic, since economists have realized that the human society has really changed since the beginning of globalization. However, this observation is not new. Human society has always practiced international exchanges with trade routes like the Silk Road in Asia. Marco Polo is one of the forerunners of this trend. This open topic means different things to different people, and it is very hard to give a real definition. We may only say that globalization is very close to the ideas of a global village, single world society, and modernization. The world is becoming interdependent, and interconnected with respect to economy, as boundaries do not exist anymore.

To explain globalization we will first see what the different theories which appeared through centuries from mercantilism to International investment are. Then we will identify the link between the origins and the benefits. There are several benefits, but globalization also has limits which we cannot ignore.

[...] However there are several factors which can embody the origins of globalization Macro-level of analysis Trade liberalization appeared in the 1950s', just after the deregulation of the economy. Governments have gradually accepted foreign investment, and consequently companies were able to trade worldwide since the 70s', and mostly in the 90s'. For example, in a study from UNCTAD (2000) about the world investment, the number of countries that introduced changes in their investment regimes increased from 35 in 1991 to 63 in 1999. [...]


[...] We can say that globalization enabled the appearance of new products in different countries. The exchanges of goods and products were a way for all the countries to create a sort of global culture of consumption. At this stage, we cannot deny the fact that globalization has been profitable to nearly all countries, because the economic opening has brought prosperity and wealth for a lot of regions in the world, like for example, Taipei, and Thailand which are among the first twenty exporters and importers in world merchandise, or South American countries such as Venezuela and Argentina. [...]


[...] Globalization is linked to capitalism, and that generates more and more production. Until the nineties, firms did not really know what the effects of such industries would be on the environment. Now, the land is polluted, as is the ozone layer. In Bombay and in Mexico for example, the pollution is so high that the air has become un-breathable!! Besides, there is not only the problem of pollution, but also the problem of organisms modified by genetics, or else problems such as the mad cow disease. [...]

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