Globalization PDF

The Contemporary World Reviewer Globalization - Refers to the process by which something involves the entire world and becomes global in scope. - Opposite of global is local - Makes the world smaller - Is the process by which businesses, ideas, and cult...

The Contemporary World Reviewer Globalization - Refers to the process by which something involves the entire world and becomes global in scope. - Opposite of global is local - Makes the world smaller - Is the process by which businesses, ideas, and cultures spread across the world, creating interconnectedness and interdependence among nations. - Driven by advances in technology and communication, it leads to the blending and exchange of resources, products, and cultures Types of Globalization - Social globalization - Technological globalization - Financial globalization - Economic globalization - Political globalization - Cultural globalization - Ecological globalization - Sociological globalization History 1897 - Charles Russell (Watch Tower Bible and Tract Society) corporate giants-largely national trusts and large enterprises 1930 - Publication entitled Towards New Education globalize- holistic view of human experience in education 1970 - Globalization used 1981 - Theodore Levitt - mainstream business audience 2000 - IMF 4 basic aspects of globalization: trade and transactions, capital and investment movements, migration of knowledge, dissemination 2013 - Globalization-borderless society- international migration 2017 - Globalization was used in teaching, in meetings and in conferences 2018 - Phenomenon of globalization is now on full swing in all academic disciplines Nature of Globalization - Conglomerate of various multiple units - Money - Patents - Credit Info - Trade Names - Control System Dimensions of Globalization 1. Planning to expand the business worldwide 2. Giving up the distinction between domestic and foreign market 3. Locating the production and the physical facilities of the business 4. Creating product development and planning 5. Global sourcing of the factors of production 6. Global orientation, structure and management Reasons of Globalization 1. Rapid shrinking of time and distance across the globe 2. Stability of companies and institutions 3. Sharing of country’s advancement in all fields 4. Transportation costs 5. Increase cross border trade by WTO Stages of Globalization - Domestic Market potential is limited to the home country Production and marketing facilities located at home Surplus may or may not be exported No overt efforts to develop foreign markets - International Which markets to enter Market entry strategies ❖ Off-shoring/global outsourcing ❖ Exporting ❖ Licensing ❖ Franchising ❖ Joint Ventures/Acquisitions ❖ Direct Investments - Multinational The domestic based company begins to carry out its own manufacturing, marketing and sales in the key foreign markets The company moves to a full insider position in these markets, supported by a complete business system including R&D and engineering This stage calls on the managers to replicate in a new environment the hardware, systems and operational approaches that have worked so well at home It forces them to extend the reach of domestic headquarters, which now has to provide support functions such as personnel and finance, to all overseas activities - Global The company movies onward a genuinely global mode of operation  To make this organizational transition, a company must denationalize their operations and create a system of values shared by corporate managers around the globe to replace the glue and nation based orientation once provided Today’s global corporations are nationality-less because consumers have become less nationalistic. They invest, they train, they pay taxes, they build up infrastructure and they provide good value to customers in all the countries where they do business. Merits of Globalization 1. Global competition 2. Innovation 3. Exports job 4. Capital low 5. Living standards 6. Productivity 7. Tourism Demerits of Globalization 1. Unemployment 2. Salary 3. Labor rights 4. Sovereignty 5. Domestic enterprise Importance of Studying Globalization 1. Demand for work 2. Global challenges 3. Global relationship 4. Model of collaborative international team 5. Promotion of local business and industry Theory of comparative advantages - Countries that are good at producing particular goods are better off exporting it countries that are less efficient at producing that good. Globalization of World Economics International Trade System - refers to the network of laws, regulations, and agreements that govern the exchange of goods and services between countries. - It includes importing and exporting products and services across borders and the various rules and regulations that impact international trade. Origin and History  - Truly global trade kicked off in the Age of Discovery. It was in this era, from the end of the 15th century onwards, that European explorers connected East and West – and accidentally discovered the Americas. - The Silk Road was the first major trade route that connected the East and the West. It was an important trade route for over 2,000 years, connecting Asia with Europe via the Middle East The Bretton Woods System - In July 1944, representatives from 44 Allied nations met in Bretton Woods, New Hampshire, to design this system - It was inaugurated in 1944 during the United Nations monetary and financial conference to prevent the catastrophes of the early decades of the century from reoccurring and affecting international ties. - This system was largely influenced by British economist John Maynard Keynes who believed that economic crises occur not when a country does not have enough money, but when money is not being spent and thereby, moving’ - On August 15, 1971, President Richard Nixon announced that the U.S. would no longer convert dollars to gold at the fixed rate. The event is often referred to as the "Nixon Shock." Neoliberalism and Discontents - Neo-liberalism is a largely unregulated capitalist system with a set of economic policies that limits restrictions on manufacturing, reduces barriers to commerce, reduces tariffs, and free trade that came up to develop a nation's economy - promotes, above all, total freedom of movement for capital, goods and services. It advocates the opening of economies, and competition in the world market in conditions of absolute freedom Key principles - Privatization refers to the transfer of ownership and control of public sector enterprises or services to private hands. Under neoliberalism, it is believed that private companies can operate more efficiently than government-run services due to market competition and the profit motive. - Deregulation is the reduction or elimination of government rules and restrictions on businesses and industries. The goal is to allow businesses to operate more freely, without the constraints of government oversight. - Free market The idea of free markets is central to neoliberalism. It advocates for minimal government intervention in the economy, allowing supply and demand to dictate prices, production, and distribution of goods and services. - Austerity  refers to policies aimed at reducing government spending, especially during economic downturns, in order to lower public debt. Discontents - Income Inequality - Erosion of Social Welfare - Erosion of democracy - Environmental Degradation - Labor Rights - Financial Crises Global Financial Crisis - is applied broadly to a variety of situations in which more financial assets suddenly lose a large part of their nominal value. - A financial crisis may be caused by natural disasters, negative financial economic news, or some other event with a significant financial impact. Types of Financial Crisis - International Crisis - Currency Crisis - Wider Economic Crisis - Banking Crisis The Global Economy - refers to the worldwide interconnectedness of economic activities - is primarily driven by trade transactions between developed and developing economies. - it comprises the flow of capital, exchange of technology, and trading of weapons, goods, and services across borders. Global Economic Indicators - Gross Domestic - Product Unemployment - Rate Inflation Rate - Trade Balance - Current Account Balance Global Corporation - are multinational companies that operate in multiple countries, often on a global scale. Generic Strategies for Global Corporations Cost Leadership: Becoming the lowest-cost producer in an industry. Differentiation: Offering unique products or services that are highly valued by customers. Focus: Concentrating on a specific market segment or niche. > Cost Focus: Achieving a cost advantage within a target segment. > Differentiation Focus: Offering a differentiated product or service within a target segment Market Integration - occurs when prices among different locations or related goods follow a similar pattern over a long period of time Types of Market Integration 1. Horizontal Integration - This occurs when a firm or agency gains control of the other firms or agency performing similar marketing function at the same level in a marketing sequence 2. Vertical Integration - This is when the company either owns or control wherein to joint ventures multiple stages in supply chain 3. Conglomeration Integration - Involves a merger between two businesses that are not related to each other completely different industries Economic Globalization Today - Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies. Attributes of Today Global System - national attributes in the systemic international nature followed its effects broadly explaining different foreign policy. GLOBAL INTERSTATE SYSTEM What is Globalization? Globalization is a process of economic exchange in the globe that removes barriers of the flow of goods, services, capital, and labor. The Attributes of Today’s Global System 1. countries or states are independent and govern themselves. 2. These countries interact with each other through diplomacy. 3. international organizations facilitate these interactions (i.e. UN); and 4. Beyond facilitating meetings between states, international organizations also take on lives of their own. a. State, in layman’s terms, refers to a country and its government. - a community of persons more or less occupying a definite territory completely free of external control and possessing an organized government to which the great body of inhabitants render habitual obedience. - The Primary actors we study in international relations are states. b. Nation, according to Benedict Anderson, is an “imagined community” and does not go beyond a given “official boundary”. It is inherently limited and sovereign. It has boundaries, meaning not anyone can be a Filipino. - this refers to a large group of people who share common characteristics such as language, traditions, and ethnicity. c. Nation-state – relatively modern phenomenon in human history whereby it is composed of two non-interchangeable terms: nation and state. suggested “replacements” for nation-states: 1. regional alliances and worldwide organizations 2. regional and int'l economic bonds 3. private capital groups 4. non-state organizations d. Sovereignty · Key concept in the Global Interstate system and international law. - Sovereignty is perhaps the key concept in international law and international relations because it defines the entire way in which countries relate to one another and to international bodies like the United Nations. · States recognized each other in the international system. · By sovereignty, we mean that in principle all states are legally equal (de jure). Problems of Sovereignty · Sovereignty is a legal definition and does not mean that all states are equal in their power, influence, wealth, etc. · Sovereignty also does not mean that states can prevent all crime, injustice, etc. System - Assemblage of units, objects, or parts united by some form of regular interaction GLOBAL INTERSTATE SYSTEM: THE DEVELOPMENT OF WORLD-SYSTEMS World-systems are whole systems of interacting polities and settlements. Systemness means that these polities and settlements are interacting with one another in important ways – interactions are two-way, necessary, structured, regularized, and reproductive. THE DEVELOPMENT OF WORLD-SYSTEMS The world-system perspective emerged during the world revolution of 1968 and the anti-war movement that produced a generation of scholars who saw the peoples of Global South (then called the “Third World”) as more than an underdeveloped backwater. It became widely understood that a global power structure existed and that the people of the non-core had been active participants in their own liberation. The history of colonialism and decolonization were seen to have importantly shaped the structures and institutions of the whole global system. A more profound awareness of Eurocentrism was accompanied by the realization that most national histories had been written as if each country were on the moon. The nation state as an inviolate, pristine unit of analysis was now seen to be an inadequate model for the sociology of development. The modern world-system is structured politically as an interstate system – a system of competing and allying states. Political Scientists commonly call this the international system, and it is the focus of the field of International Relations. THE WORLD SYSTEM THEORY World-system theory is a macro-scale approach to analyzing the world history of mankind and social changes in different countries. The definition of the theory refers to the division of labor, be it inter-regionally or transnationally. Currently, the theory divides the world into the core, semi-periphery and periphery countries. CORE NATIONS Core: Describes dominant capitalist countries which exploit the peripheral countries for labor and raw materials. Core nations appear to be powerful, wealthy, and highly independent of outside control. They can deal with bureaucracies effectively; they have powerful militaries and can boast strong economies. be at the forefront of technological progress and have a significant influence on less developed non-core nations. SEMI-PERIPHERY NATIONS Semi: Countries that share characteristics of both core and periphery countries. These regions have a less developed economy and are not dominant in international trade. In terms of their influence on the world economies, they end up midway between the core and periphery countries However, they strive to get into a dominant position in the core nation, and it has been proven historically that it is possible to gain major influence in the world and become a core country. PERIPHERY NATIONS Periphery: Peripheral countries are dependent on core countries for capital and have underdeveloped industry. These are the nations that are the least economically developed. One of the main reasons for their peripheral status is the (because of the high percentage of uneducated people who can mainly provide cheap unskilled labor to the core nations.) There is a very high level of social inequality, together with a relatively weak government which is unable to control the country's economic activity and the extensive influence of the core nations. Interstate system–a system of competing and allying states. A global system, like a regional system, can be characterized by its degree of hierarchy, or by its polarity. What is the Global Interstate System? “Global Interstate System” is a system of competing and allied states around the world. The word “global” refers to the interaction networks in which people live, whether these are spatially small or large around the world. “Interstate” explains the connections and operations between states, and “system” means that these policies and settlements are interacting with one another in important ways; interactions are two-way, necessary, structured, regularized, and reproductive. Global Interstate System Background The international state system was born in Europe with the Treaty of Westphalia in 1648, after the Thirty Years War. Treaty of Westphalia – set of agreements signed in 1648 to end the Thirty Years’ War between the major continental powers of Europe. Westphalian system: A global system based on the principle of international law that each state has sovereignty over its territory and domestic affairs, to the exclusion of all external powers, on the principle of non-interference in another country's domestic affairs, and that each state (no matter how large or small) The system is designed to avert war in the future. Significant events have marked the milestones in the development of the international system. 1. The Peace of Westphalia (1648) In 1648, the Peace of Westphalia, which ended the Thirty Years’ War between Catholic states and Protestant states in western and central Europe, established our modern international system. 2. Shifting Balances of Power (1600–1800) In the seventeenth and eighteenth centuries, the nation-state emerged as the dominant political unit of the international system. A series of powerful states dominated Europe, with the great powers rising and falling. 3. Emergence of Nationalism (1800–1945) The nineteenth century brought two major changes to the international system: Nationalism emerged as a strong force, allowing nation-states to grow even more powerful. Italy and Germany became unified countries, which altered the balance of military and economic power in Europe. 4. New World Orders (1945–Present) The end of World War II marked a decisive shift in the global system. After the war, only two great world powers remained: the United States and the Soviet Union. Although some other important states existed, almost all states were understood within the context of their relations with the two superpowers Purpose of Global Interstate System The balance of power in the interstate system prevents any single state from controlling the world economy, and from imposing a political monopoly over accumulation. This means that "factors of production" cannot be constrained to the degree that they could be if there were an overarching world state. The most important feature of the interstate system is that it is anarchic. Unlike politics within states, relations between states take place in a Hobbesian 'state of nature’. Since an anarchic system is one in which all states constantly face actual or potential threats, their main goal is security. Principles of Interstate System NATIONALISM – a doctrine and/or a political movement that seeks to make the nation the basis of a political structure, especially a state. It is a sense of national consciousness that generally exalts one’s own nation above others and focuses on the promotion of interests. INTERNATIONALISM - desire for greater cooperation and unity among states and people. In a more comprehensive definition, it is a political principle that places the interests of the entire world above those of individual nations and argues for cooperation among nations for common good. This can be divided into two broad categories: liberal internationalism and socialist internationalism. GLOBALISM - Globalism refers to various systems with scope beyond merely international. It is used by political scientists, such as Joseph Nye, to describe "attempts to understand all the interconnections of the modern world—and to highlight patterns that underlie them." Globalism Vs. Globalization Globalism, at its core, seeks to describe and explain nothing more than a world which is characterized by networks of connections that span multi-continental distances.... In short, consider globalism as the underlying basic network, while globalization refers to the dynamic shrinking of distance on a large scale. Internationalism Vs. Globalism Internationalism is political, economic, and cultural cooperation between nations while globalism is an ideology based on the belief that people, goods and information ought to be able to cross national borders unfettered. Internationalism Vs. Nationalism Internationalism is political, economic, and cultural cooperation between nations while nationalism is patriotism; the idea of supporting one's country and culture