GLOBALIZATION - 2000 = International Monetary Fund
(IMF) identified 4 basic aspects of
Contemporary World globalization
- Modern world & currently happening 1. Trade & transactions
- More on digital & advancements & 2. Capital & investment movements
interconnected to other countries 3. Migration of knowledge
thru import & exports 4. Dissemination
- Every changing mix of social & - 2018 = globalization phenomenon @
political changes (one of the most full swing in all academic disciplines
peaceful eras)
- World is an Abstract (concept)
Global citizen
- OFWs, internet & consumption
habits
- Someone who understands the wider
world & their place in it
- More connected beyond ones local
community (doff cultures &
◉ ↑ interaction
environments)
- thru growth of international flow of
Parochialism
money, ideas & cultures = primarily
- One only focuses on small sections
focus = economic process of
or immediate community of the issue
integration w/ social & cultural
(not broadening/widening contexts)
aspects)
◉ interconnectedness
Historical Foundation
- people & business = global, cultural,
- Early part of 1981 = “globalization”
political, and economic integration
is used in its economic sense &
◉ ability to move & communicate easily
popularized, yet;
- to conduct business internationally.
- Late half of 1980’s = Theodore
◉ free movement
Levitt popularized the term
- goods, services, people in a seamless
“globalization” by bringing it to the
and integrated manner.
mainstream business audience
◉ liberalization of countries
- 1897 = “Corporate Giants” = Charles
- liberalization of countries of their
Taze Russell (of the watch tower
impact protocols and welcome
bible & tract society) coined the
foreign investment into sectors that
related term
are the mainstays of its economy
- 1930 = “Globalize” - noun appeared in
(policy changes)
a publication “Towards new
◉ countries acting like magnets
education”
- attracting global capital by opening
- late 1970’s = “Globalization” coined
up their economies to multinational
- 2013 = “borderless society”
corporations.
Indicators of Globalization (import raw material para mabuhat
Major factors: Jet engines, LRT/MRT, sa other country)
internet E-bike/book/banking - The creation of the World Trade
- These generated further Organization (WTO) made it
interdependence in economic & possible to stimulate increased
cultural activities among nations. cross-border trade.
Dimensions of Globalization Stage 1 – arm’s length service activity of
1. Expansion of business worldwide an essentially domestic company/institution
2. Giving up distinction between which moves into new market.
domestic & foreign market Stage 2 – the company/institution takes
3. Locating the production & physical over these activities on its own.
facilities of the business by Stage 3 – the domestic-based company
considering global business dynamics institution begins to carry out its own
4. Creating product on a global market manufacturing marketing and sales in key
sphere foreign markets.
5. Global sourcing of the factors of Stage 4 – the company/institution moves to
production obtained from diff. a full insider position in these markets
source anywhere in the world supported by a complete business system
6. Global orientation/orgs structure & (e.g., Research and Development and
management culture engineering).
Expand- no distinction but as one market - Stage 5 – the company/institution moves
strategic positioning - product making towards a genuinely global mode of
intended for global use - global sourcing - operation where global localization happens
company adapts worldwide perspective that requires an organizational transition
i.e. the company denationalize its
3 major areas of globalization: operations.
1. Economic
2. Political Merits
3. Cultural ● Global competition & imports keep a
lid on prices such that inflation is
Reasons of Globa.lization less likely to derail economic growth.
- Rapid shrinking of time and distance ● An open economy spurs fast
across the globe. innovation.
- Domestic markets =no longer rich ● Export jobs often pay more than
- Companies & institutions go global to other jobs.
find political and economic stability ● Unfettered capital flow keeps
- To get technological and managerial interest rates low.
know-how of other countries due to ● Living standards go up faster.
their advancement ● Productivity grows more quickly.
- To reduce high transportation costs Countries liberalize their visa rules
if one goes globally and procedures.
- To be close to raw materials and to ● Result = freeing up the unproductive
markets for their finished products sector to investment and the
productive sector to export related work with people of other nations
activities resulting in a win-win and cultures.
situation for the world economy. - greater demand of promoting local
business &industry to other
Demerits countries = owners travel
● Job loss due to import of cheap independently & internationally =
labor or materials(shift production better promotion.
abroad) - Contemporary challenges needs
● Workers face pay cut demands from interdisciplinary groups to solve
employers who often threaten to (access to clean water,environment,
export jobs. renewable energy & climate change)
● Unregulated globalization=serious that is affordable
problems to poor & developing
countries. Globalization is grounded on the Theory of
● High foreign stake on industries Comparative Advantage.
where it is not necessarily needed - countries good at producing
could affect the economic growth of something must export it to others
domestic enterprise. who are not good at making it &
● Sovereignty of a country and other country can export their raw
company/institution may be at materials to others who lacks it
stake. _________________________________
Timeline of Main Events Related to
Importance of globalization for everyone Globalization
Neil Kokemuller (writer) ➢ 1897: Charles Taze Russell coined the
- globalization=expansion of local term "corporate giants."
economies and businesses into a ➢ 1930: The word "globalize" appears as a
broader international marketplace. noun in a publication called "Towards New
Education."
- Internet revolutionized the business ➢ Late 1970s: The word "globalization" is
arena= as it created a whole new coined.
virtual marketplace (beyond physical ➢ Early 1981: The term "globalization"
and geographical boundaries) begins to be used in an economic sense.
- business, industry, and income levels ➢ Late 1980s: Theodore Levitt popularizes
development in several large the term "globalization" within the
population centers=contributed to mainstream business community.
the importance of globalization. ➢ 2000: The International Monetary Fund
- Partnership opportunities w/ (IMF) identifies four basic aspects of
businesses among countries=aid globalization: trade and transactions,
growth. capital and investment movements,
- greater demand in business and migration and knowledge, and
industry, health, engineering, and dissemination.
technology to have people who can
➢ 2013: The term "globalization" is used to ● Unregulated globalization = serious
mean "borderless society". problems to poor & developing
➢ 2017: The word "globalization" is used countries: If globalization is not
frequently. regulated properly, it can create
➢ 2018: Globalization is in full swing across significant problems for poor and
academic disciplines. developing countries.
Cast of Characters ● High foreign stake on industries
➢ Charles Taze Russell: (Late 19th Century) where it is not necessarily needed
Coined the term "corporate giants." could affect the economic growth
Associated with the Watch Tower Bible of domestic enterprise: Excessive
and Tract Society. foreign investment in industries
➢ Theodore Levitt: (Late 20th Century) that don't necessarily require it can
Popularized the term "globalization" negatively impact the economic
within the business world during the late growth of domestic enterprises.
1980s.
➢ Neil Kokemuller: (Contemporary) Writer ● Sovereignty of a country and
who defines globalization as the expansion company/institution may be at
of local economies and businesses into a stake: The sovereignty of a country,
broader international marketplace. company, or institution may be
➢ International Monetary Fund (IMF): compromised due to globalization.
(2000) Identified four basic aspects of
globalization: trade and transactions,
capital and investment movements,
migration of knowledge, and dissemination.
demerits of globalizationJob loss due to
import of cheap labor or materials (shift merits of globalization
production abroad): Companies may import
cheaper labor or materials, or move ● Global competition and imports
production to other countries, resulting in keep a lid on prices such that
job losses in the domestic market. inflation is less likely to derail
economic growth Global competition,
along with the influx of imports,
● Workers face pay cut demands helps control prices, reducing the
from employers who often likelihood of inflation hindering
threaten to export jobs: Employers economic growth.
may demand pay cuts from workers,
often threatening to move jobs to ● An open economy spurs fast
other countries if their demands are innovation An open economy
not met. encourages rapid innovation.
● Export jobs often pay more than
other jobs Jobs related to
exporting goods or services tend to
offer higher compensation compared
to other types of employment.
● Unfettered capital flow keeps
interest rates low When capital can
flow freely, it helps maintain lower
interest rates.
● Living standards go up faster
Globalization contributes to a faster
increase in living standards.
● Productivity grows more quickly
Globalization leads to a quicker
growth in productivity.
● Countries liberalize their visa rules
and procedures Nations tend to
ease their visa regulations and
procedures as part of globalization.
● It results in freeing up the
unproductive sector to investment
and the productive sector to
export related activities resulting
in a win-win situation for the
world economy Globalization leads
to the freeing up of unproductive
sectors for investment and the
productive sector to export-related
activities, which creates a mutually
beneficial situation for the global
economy.
