Understanding Globalization: Definitions and Concepts

Definitions of Globalization

• Involves increasing interaction among people, states, or countries.
• Achieved through the growth of international flow of money, ideas, and culture.
• Primarily focused on the economic process of integration with social and cultural aspects.
• Characterized by the interconnectedness of people and businesses worldwide.
• Leads to global, cultural, political, and economic integration.
• Enables ease of movement and communication.
• Needed to conduct business internationally.
• Facilitates the free movement of goods, services, and people across the world.
• Creates seamless and integrated systems.
• Involves the liberalization of countries' impact protocols.
• Welcomes the flow of foreign investment into key economic sectors.
• Encourages countries to attract global capital.
• Achieved by opening up economies to multinational corporations.

Globalization as Defined by Other Authors

• Martin Albrow and Elizabeth King: Globalization is the process by which the people of the world are incorporated into a single world society.
• Anthony Giddens: Globalization is the intensification of worldwide social relations that link distant localities, shaping local events by occurrences miles away and conversely.
• Prof. Roland Robertson (1992, University of Aberdeen): Globalization is the compression of the world and the intensification of the consciousness of the world as a whole.

Historical Foundation of the Term Globalization

• Before the Age of Discovery, the term did not exists.
• The Age of Discovery preceded in 1820s.
• The 20th Century it continued into 1900s.
• 1897: Charles Taze Russel coined the term "Corporate Giants", referring to large national trusts and enterprises.
• 1930: The word "Globalize" appeared as a noun denoting a holistic view of human experience in education.
• Late 1970s: The term "Globalization" was coined.
• Early 1981: "Globalization" was used in an economic sense.
• Late 1980s: Theodore Levitt popularized "Globalization".
• Late 2000s: The IMF identified the basic aspects of globalization.
• 2013: Globalization was used to define a "borderless society".
• 2017: Globalization was often used in academic contexts.
• 2018: Globalization is now used across all disciplines.

Indicators of Globalization

• Interdependence of countries in different social aspects is an indicator.
• Advancement of science and technology is also an indicator.
• Environmental issues across borders reflect globalization.
• Economic, cultural, and political globalization are key indicators.

Nature of Globalization

• A conglomerate of various units is located in different parts of the globe.
• These units are linked by common ownership.
• Multiple units draw on a common pool of resources.
• Resources include money, credit, information, patents, and trade names.
• Requires a control system to manage these resources.
• Units respond to a common strategy.
• Product presence is established in different markets globally.
• Human resources are highly diverse.
• Transactions involving intellectual properties occur across the globe.

Reasons for Globalization

• Rapid shrinking of time and distance due to advanced technology.
• Domestic markets are no longer rich due to interlocking factors.
• Companies seek political and economic stability in other countries.
• Aim to gain technological and managerial expertise.
• Reduction of high transportation costs.
• Proximity to raw materials and markets is important.
• Finished products may not be available in the country of origin.
• World Trade Organization(WTO) stimulates cross-border trade.
• UN and arbitration bodies facilitate international agreements.

Stages of Globalization

• Stage 1: Arm's length service activity by a primarily domestic company entering new markets via local dealers and distributors.
• Stage 2: The company/institution takes over these activities on its own.
• Stage 3: The domestic-based company begins its own manufacturing, marketing, and sales in key foreign markets.
• Stage 4: The company moves to a full insider position with a complete business system, including R&D and engineering, but headquarters mentality persists.
• Stage 5: The company moves towards a genuinely global mode of operation, achieving global localization and serving local customers globally, requiring denationalization and shared values among managers.

Explore various definitions of globalization, focusing on economic, social, and cultural integration. Learn how it fosters international interaction, free movement of goods, and the flow of foreign investment. Understand the interconnectedness of people and businesses worldwide.