Cambodian University for Specialties
1. Introduction
2. Definitions of globalization
3. A global village
4. The components of globalization
5. The driving forces behind globalization
6. Global corporations
7. Is globalization a myth?
8. The reaction to globalization
9. Opposition to globalization
10. Cultural convergence
11. Cultural divergence
12. Future trends
Introduction
This chapter examines the spread of globalization and its impact on culture, society,
and economic development. It discusses the advantages and disadvantages of globalization
and looks at the opposition it faces.
It also considers whether globalization leads to cultural convergence or divergence.
The driving forces behind globalization are explored, and future trends in globalization,
particularly focusing on the BRIC countries, are suggested. The chapter also discusses
how international business and diplomacy have been transformed by global
interdependence and the erosion of traditional boundaries.
It mentions the role of social media, NGOs, and global concern for environmental
issues. The chapter also highlights the impact of events such as the banking crisis,
recession, Arab Spring, nuclear weapons aspirations, and failed states on global
interdependence and cultural values. Overall, the chapter argues that globalization is a
fundamental aspect of our lives today.
Definitions of globalization
Globalization is a complex and multifaceted concept that
has been defined and interpreted in various ways by scholars
and experts. Here are a few common definitions of
globalization:
1. Globalization is the process by which businesses, cultures,
and societies around the world become increasingly
interconnected and interdependent through the exchange of
goods, services, ideas, and information.
2. Globalization is the expansion and intensification of
economic, political, social, and cultural relations across
international borders, resulting in the creation of a global
network of relationships and interactions.
A global village
The concept of a "global village" was popularized by the Canadian media
theorist Marshall McLuhan in the 1960s. McLuhan used this term to describe
how advancements in communication technology, such as television and the
internet, were shrinking the world and creating a sense of interconnectedness
among people around the globe. Here are some key points about the global
village:
1. Interconnectedness: The global village refers to the idea that advancements
in communication technology have made it possible for people from different
parts of the world to connect and communicate with each other
instantaneously. This interconnectedness has blurred traditional boundaries
and distances, creating a sense of a "global community."
2. Information exchange: In the global village, information flows freely
across borders and continents, allowing individuals and organizations to
access knowledge, news, and ideas from around the world. This exchange of
information has facilitated cross-cultural understanding and collaboration.
A global village (cont.)
3. Cultural exchange: The global village has led to increased cultural exchange and
interaction among people from diverse backgrounds. Through media platforms, such as
social media, television, and the internet, individuals can engage with different cultures,
traditions, and perspectives, leading to a more interconnected and multicultural world.
4. Economic integration: The concept of the global village also encompasses the idea of
economic integration, where countries and businesses are interconnected through trade,
investment, and supply chains. Globalization has enabled companies to operate on a global
scale, reaching customers and markets worldwide.
5. Challenges and opportunities: While the global village offers many opportunities for
collaboration, innovation, and cultural exchange, it also presents challenges such as digital
divide, cultural homogenization, and issues related to privacy and security. As the world
becomes more interconnected, it is important to address these challenges and work
towards creating a more inclusive and sustainable global community.
The components of globalization
Globalization is a complex and multifaceted phenomenon that involves various components that shape the
interconnectedness of the world. Here are some key components of globalization:
1. Economic Globalization: Economic globalization refers to the increasing interconnectedness of national
economies through trade, investment, and capital flows. It involves the integration of markets, production
processes, and financial systems on a global scale. Economic globalization has led to the expansion of
international trade, the rise of multinational corporations, and the growth of global supply chains.
2. Cultural Globalization: Cultural globalization involves the exchange and diffusion of ideas, values, beliefs, and
practices across different cultures and societies. It is facilitated by advancements in communication technology,
such as the internet and social media, which allow for the rapid spread of cultural products, media content, and
cultural norms. Cultural globalization can lead to the homogenization of cultures but also fosters cultural diversity
and cross-cultural understanding.
3. Technological Globalization: Technological globalization refers to the spread of technology and innovation
across borders and its impact on various aspects of society. Advances in information and communication
technologies have revolutionized how people communicate, work, and interact with each other globally.
Technological globalization has enabled the digital economy, e-commerce, telecommuting, and online education,
among other developments.
The components of globalization (cont.)
4. Political Globalization: Political globalization involves the increasing interdependence of
countries and governments in addressing global challenges and issues. It includes the formation
of international organizations, agreements, and alliances to promote cooperation and
governance at the global level. Political globalization also encompasses the spread of
democratic principles, human rights norms, and environmental regulations across borders.
5. Social Globalization: Social globalization refers to the interconnectedness of individuals and
communities across different societies and cultures. It involves the movement of people, ideas,
and values across borders, leading to increased social interactions, cross-cultural exchanges,
and the formation of global networks. Social globalization can foster social movements,
activism, and solidarity among diverse groups.
6. Environmental Globalization: Environmental globalization focuses on the
interconnectedness of environmental issues and challenges that transcend national boundaries.
It includes the impact of global climate change, biodiversity loss, pollution, and resource
depletion on ecosystems and societies worldwide. Environmental globalization calls for
collective action and cooperation to address sustainability and environmental conservation at
The driving forces behind globalization
Globalization is influenced by several driving forces
such as:
• The decline in trade barriers and the deregulation of
markets, with the resultant liberalization of trade and
reduction of cross-border regulations with less
bureaucracy, have made it easier to move goods,
services, labour and finance across borders.
• The increased access to markets involves increased
competition, together with consumer pressure and
greater consumer spending power.
• The desire to gain competitive advantage:
• Access to different markets offering the opportunity
to sell a wider range of goods.
• Advances in technology, for example, the increased
use of automation, robotics and containerization, have
improved both production and distribution.
The driving forces behind globalization ( cont.)
• Greater distributed risk, especially increased international
diversity, as financial risk can be distributed across different
markets with a wider range of products.
• The spread of English as the major international language,
especially in advertising, the media and on the Internet.
• IT developments, including expansion of the Internet,
e-commerce and social media sites, which have spread
awareness of global brands and products.
Global corporations
The Fortune Global 500 is a ranking of the top 500 corporations worldwide
as measured by revenue which compiled and published annually by Fortune
magazine.
The USA still dominates the Fortune 500 list of the world’s top-performing
companies with 133. It has been estimated that over 50 per cent of US trade
is carried out by global companies, 40 per cent have their headquarters in the
USA, 30 per cent are based in Europe and the rest are mostly in China, India
and Japan.
Wal-Mart was the largest company on the list in 2007 and 2008. ExxonMobil
was in second place in 2007 and 2008, but overtook Wal-Mart in 2009. Wal-
Mart regained the top spot in 2010.
An increasing number of global companies from emerging markets, in
particular from the BRICs, are now appearing in the list.
Is global a myth?
It discusses the ongoing debate about whether globalization truly exists.
Rugman and Collinson argue that many multinational companies are
not making their profits from trade with less developed countries, but
rather from wealthier countries. The debate centers around the
definition of a global business, with Rugman suggesting it is a firm
with significant operations in the EU, North America, and Asia.
There is strong evidence that there has been a significant growth in
trade within the three regions mentioned above. This fits the definition
of regional business, where a firm has the majority of its sales inside
one of the three triad regions, usually the home region. In practice, the
debate between globalization and regionalization is really one of
degree.
LDCs in a number of cases have been marginalized, receiving a
declining share of trade and investment, and suffering from a high rate
of debt and debt servicing. The net result is that there is still unequal
distribution of income and an increasing gap between the rich and the
poor.
The reaction to globalization
The downside of globalization is the outsourcing of manufacturing from the
West, where factories have been forced to close as multinationals have found
cheaper sources of production, in particular with significantly reduced labour
costs, and raw materials in LDCs.
There is concern that global inequality is growing, with the result that in many
countries there is increasing political instability and the widening of the gap in
incomes between the minority privileged elite and the rest of the population. This
trend is compounded by lower wages, poor health and safety in the workplace
and corrupt business practices.
There are two very different ways of analysing the effects of globalization. One
approach is to see the working of the market economy bringing about a world in
which the gap between rich and poor increases. The second (and more optimistic)
view is that a market economy will enable countries to converge towards a more
equal state of prosperity as global trade liberalizes the world economy.
The reaction to globalization (cont.)
In Globalization and its Discontents (2002), Joseph Stiglitz, former Chief
Economist of the World Bank and a noted academic economist, was a
strong critic of globalization because its benefits are spread unevenly
throughout the world. This is particularly the case in LDCs, where many
people remain in poverty, notably in Africa, mainly because of a lack of
resources in education to take advantage of the new technologies that have
begun to make a difference to living standards in India and China.
Stiglitz (2007) also con-tends that market reforms have been pushed
forward too quickly, whereas individual countries should be free to
experiment with alternatives and develop ways that are best suited to their
cultures and their needs. He does, however, contend that globalization has
some benefits: ‘Opening up inter- national trade has helped many countries
grow far more quickly
The reaction to globalization (cont.)
Tony Blair, the former British Prime Minister, stated that: ‘If globalization
only works for the benefit of the few, it will fail. The West must follow the
principles that power, wealth and opportunity must be in the hands of the
many, not the few. The global economy must be a force for good and an
international movement’
Peter Mandelson reiterates this view: ‘There is growing evidence that global
economic integration brings rising inequality within economies if the
balance between those who benefit from globalization and those who bear
the burden of the adaptation is not actively addressed.
Professor Samuel Huntington had already expressed in his The Clash of
Civilizations in 1993, when he emphasized that: ‘The new global
civilization is in fact a very narrow one, consisting only of the assumptions
and values held by most people in the West, but worldwide this culture is
shared by very few outside the West.
Opposition to globalization
Opposition to globalization is based on several key arguments. Critics argue that globalization
threatens individual cultures by promoting cultural homogenization and perceived cultural
imperialism. Global companies are often criticized for not upholding health and safety standards for
their workforce, including unfair wages, lack of trade union representation, and the exploitation of
workers, such as children and migrants. The influence of global soft power through branding,
advertising, and media can also be seen as a negative aspect of globalization.
Furthermore, advanced economies shifting manufacturing to less developed countries for cheaper
labor can lead to job losses and wage stagnation in the home country. There are concerns about the
increased risk of protectionism due to these economic shifts. Critics also call for global companies to
pay taxes in the countries where they operate and take responsibility for environmental damage they
cause.
Opponents of globalization argue that it can lead to a transfer of moral responsibility, threaten
national independence, and harm local economies through outsourcing. The widespread use of
English as a global language is also criticized for contributing to the decline of local languages.
Overall, globalization is viewed as a force that can undermine. There are two very different ways of
analysing the effects of globalization. One approach is to see the working of the market economy
bringing about a world in which the gap between rich and poor increases. The second (and more
optimistic) view is that a market economy will enable countries to converge towards a more equal
state of prosperity as global trade liberalizes the world economy. cultural diversity, economic
stability, and national sovereignty.
Cultural convergence
Globalization is often compared to cultural diffusion, where elements
from one culture spread to another, leading to significant changes.
Factors such as lower airfares, media influence, the Internet, and
increased travel opportunities contribute to cultural convergence.
Global companies like Apple, Sony, Nokia, and IKEA promote their
products worldwide, creating a sense of universality and desirability
across borders. This trend results in growing similarities in national
cultures, driven by global brands, media, and common icons.
Cultural divergence
Despite increasing interconnectedness and international trade, national
cultures and differences persist, promoting diversity in consumer
demand and the need for multinationals to respond to local preferences.
This suggests that cultural change involves both convergence and
divergence processes, with individuals selectively embracing or
rejecting elements of global culture based on their needs and values.
Therefore, while globalization fosters interconnectivity, it does not
erase national identities and cultural differences.
Future trends
Globalization is no longer just a luxury but a necessity for businesses seeking
competitive survival due to the need for new markets, scarce resources, and cost-
effective labor. The rise of the BRIC countries will challenge Western economic
dominance as the US's share of global output declines. International managers will
need cross-cultural competencies to navigate complex and changing global
environments.
Cultural differences will remain significant in product development, with
'glocalization' becoming a key strategy to cater to diverse consumer needs. Critics of
globalization argue that it masks countries' failures to address social, economic, and
ethical issues, leading to protests and calls for protectionism.
Corporate social responsibility has gained importance, balancing out some negative
aspects of globalization on developing countries and local cultures. Collaboration
between international businesses and governments is increasing to find solutions to
global trade challenges.
However, globalization risks failure if it perpetuates poor governance in addressing
social, economic, and environmental issues. Cooperation among global institutions
is crucial to achieving targets like reducing poverty and improving education and
healthcare by 2015.
