Transcript Globalisation - University of St Andrews

Globalisation
Mikkeli 2005
Compiled by Rulzion Rattray
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What does Globalisation mean?
Four Perspectives on Globalisation:
1. Economists focus on the growth of international trade
and the increase in international capital flows.
2. Political scientists view globalisation as a process that
leads to the undermining of the nation state and the
emergence of new forms of governance (control).
3. Sociologists view globalisation in terms of the rise of
a global culture and the domination of the media by
global companies.
4. International Relations experts tend to focus on the
emergence of global conflicts and global institutions.
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The Globalisation of Markets.
Levitt, T. (1983).
• Advances in Technology Driving the
world to a converging commonality.
– Proletarianisation of:
• Communication, transport, travel
• Global corporations which operate with
resolute consistency at low relative cost
using the entire world as a single
market.
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The Myth of Globalisation.
Susan Douglas & Yoram Wind (1987), .
• Attacks Levitt's view of global standardisation as naive
and over simplistic. Homogenisation not a clear &
universal trend.
• Contra Evidence of
homogenisation:
– Food firms adapt to national
characteristics.
– Growth of intra-country
segmentation:
– growing demand for
differentiated products.
• The myth of economies
of scale:
– Technical developments
lowering scale
requirements.
– cost of production often
only small part of total
costs.
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Globalisation:
• Globalisation is multi-dimensional, characterised by a
number of opposing tendencies. For example;
• Universalisation vs. Particularisation - Whilst
globalisation may point out that many aspects of modern
social life are universal (assembly line production, fast
food restaurants, consumer fashions..) it also helps us to
point out the differences between places/peoples.
• Homogenisation vs. Differentiation - Globalisation has
led to a “sameness” in product, processes and institutions
but at a deeper level the general must be assimilated into
local conditions. Example, practice of specific religion
takes on different forms in different places.
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Globalisation:
• Integration vs. Fragmentation - Globalisation creates new
forms of global, regional and transnational communities which
unite (integrate) people across geographical boundaries.
However, it also has the ability to divide and fragment
communities.
Doubts!
Globalisation has become the topic of the moment. However
not everyone agrees that globailisation is something new and
points to the fact that world trade and investment as a
proportion of GDP have changed little over the last 100 years.
That said, the ‘doubters’ would concede that there are three
common elements usually involved:
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Globalisation Issues Raised:
• Shrinking Space - jobs, incomes, environment, health…
increasingly depend on factors outside national and local
boundaries.
‘When America catches a cold the rest of the world sneezes’
• Shrinking Time - events occurring on one place now tend to
have almost instantaneous (real time) impacts worldwide.
Good example is world share prices.
• Disappearing Borders - Decisions are increasingly being
taken by regional trading blocks (example, EU, NAFTA)
and supranational bodies (example, IMF, WTO).
• Case - ‘Preparing to compete in the wider world’.
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Dynamics of Global Competition.
High
Global Business
Integrated product
strategy world-wide
management
Pressure
for
Global
Integration
Multifocal Business
Product emphasis
Area emphasis
Locally Responsive
autonomous national
subsidiaries
Low
Low
Adapted from the Dynamics of Global Competition
Prahalad & Doz. Drawn by Rulzion Rattray
Pressure
for
Local
Responsiveness
High
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References
• de Wit, B & Meyer, R, (1998), Strategy
Process, Content Context. 2nd Ed, West.
• Douglas, S., & Wind, Y., (1987), “The Myth
of Globalisation”, Columbia Journal of
World Business, Winter.
• Griffiths, A., and Wall, S., (Eds), (1999),
“Applied Economics”, Prentice Hall.
• Levitt, T. (1983), “The Globalisation of
Markets”, Harvard Business Review
May/Jun.
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