Definition – Globalization
Globalization is an inevitable phenomenon that can't be avoided. It is characterized by the shrinking of the world and the appreciation of the thickness of human interaction (Ervin & Smith, 2008, p. 4). This shows that the world is no longer isolated from each other; rather they are increasingly interconnected and interdependent with each other as their decisions affect each other. In micro scales, globalization is the interconnectedness of nations' politics, economies, culture, and society. In today's global world, the economy of an oriental nation interacts with that of the West in a free market. As much as nations work side-by-side to promote global economy, it is also imperative that the people within these economies and markets interact with each other that they adopt to new cultures. As a result of these interactions and interdependency, any national culture may become a global culture with a global impact.
Yet, globalization, as a term, connotes a broad sense that defining it becomes to vague and broad as well. In business, globalization is the "creation of international strategies by organizations for overseas expansion and operation on a worldwide level (Brömme, 2011, p. 3)." However, globalization as a whole includes everything: medicine, religion, arts, law, politics, engineering, music, and education. In this broad concept, Jones (2006) defines globalization as "growing interconnectedness and interrelatedness of all aspects of society (p. 2)." This means that not a single area of life or of the society is isolated from the impact to globalization; globalization becomes a prime mover of the way people interact and relate with each other.
Globalization as a Process
Globalization is not just a single explosion of culture and trade interaction, but it "involves a set of processes that led, many other things, to the supplanting of the nation-state as the preeminent actor in the world (Rizter, 2012, p. 35)." And as a process, globalization is not just pervasive, but it is also a growing phenomenon that transcends geographical locations, culture, ethnicity, economies, and even polity. But this process of allowing all sorts of flow between nation-state does not lead to the decline of the nation-state nor of the government, but rather the process creates a richer way for these nation-states to share the potential of each other for the common good of all.
Held (1999), on the other hand, asserts that globalization is "a process (or a set of processes) which embodies a transformation in the spatial organization of social relations and transactions—assessed in terms of their extensity, intensity, velocity and impact—generating transcontinental or inter regional flows and networks of activity, interaction, and the exercise of power (p. 16)."This means that globalization started in the change of the way members of the society interact and relate to each other, in terms of transactions, in whatever forms and fields. As the result of this transformation of smaller and localized networks, the impact becomes regional and transcontinental, thereby providing a way for global power players to exercise their power not just in terms of local networks, but in an extended network affecting each other.
International Trade and MNC
One of the major impacts of globalization is the internationalization of the markets, wherein multinational companies (MNCs) play an important role. Globalization provides a strategy for most organizations to transact business and operate day-to-day activities considering the global or worldwide environment, rather that just the local market (Körner, 2011). This is the truism of the assertion that globalization is characterized by the growing interdependence of businesses and economies across regions and countries. MNCs are major driving forces in creating this interdependency and interrelationship of economies.
Perhaps, a very important part of the market internationalization is the overlapping of the innovations and technologies that are utilized by MNCs. With advanced approaches on how organizations can keep themselves in good shape in the middle of the border-less competition happening due to globalization, MNCs are faced with an inevitable choice of emphasizing its R & D. This is the improvement of the organization's production, approaches to production, and distribution. As a result, more and more companies are moving their production plants to other locations that can meet demands of technologies and competitions. This is one of the major factors in the internationalization of market allowing factors of economics and politics to drive impact into an organization regardless of its headquarter or host country.
The idea of multinational companies is better expressed on the way businesses interact with each other creating foreign affiliates to a value to the organization's production, export, and industrial perspective (de la Dehesa, 2008). For instance, American automobile companies design vehicles in the parent company, but they maintain affiliates or sister companies wherein they can have the assembly line and other different activities. This allows the parent company to spread the production according to the convenience of production.
On the other hand, another important driver of international trade is the foreign direct investment. When MNCs look for possible growth opportunities, foreign direct investment is a fine option. This would allow the company to have influence on national businesses and projects. As a result, the interdependency and relationship of these companies overlap with each other, which is not defined by the language of globalization.
Aspects of Globalization
Globalization results to the emergence of new global markets for sale of products in a volume and unimagined scale of magnitude (Levitt, 1983). With the internationalization of the market, competition became difficult to manage. Instead of domestic organizations competing with each other, new international players, whether through affiliates or FDI influence, join the game of market share. This means that domestic market players have to handle the impact of their presence and have to find direct ways and means to curb the impact of their market presence.
Due to the fact that the domestic market becomes too crowded for growth, it is inevitable for the domestic company to go global or international. This is a strategy to look for possible market opportunities and growth areas outside of the domestic market. As part of the reactive strategies of the company, it needs to explore possibilities of expanding its operations. As a result, the company becomes a new actor in the local market it enters, but this also provides a new market for the company to grow and compete.
When one enters a new market, overlapping of behavior becomes an important factor or barrier for growth. The people who live in a different geography have different culture, social behavior, and social norms. As a result, the company has to deal with them in order to gain market share through penetration. The business is left to choose whether to reinvent itself through segmentation and adoptation or remain in its standardization approach. The new market becomes a driver for change within the organization, and on the other way around, the change within the organization also changes its approach in handling the market.
The change of the market is ushered by the impact of technologies used in communication. Wireless and mobile communications change the value of market scope and the new setting offers empowerment of the people around the globe (Prasad, 2011). With the help of these new tools in communication, international trade becomes a reality, and the interaction between people across the planet becomes real. This provides an entry for a clear statement of globalization, which is interrelatedness between people, their activities, and their society.
Arguments on Globalization
In the paper, The Conflicts of Globalization, Lerche (1998) asserts that the world is becoming a global village which can be easily affected by the situation of another. By forming linkages and collectiveness between nations and societies, they became too interrelated that the space between them became too slim to avoid conflict and impact with each other. Looking closely at the shrinking space argument, it is easy to find how culture crossed borders and nations bringing reality to the assertion of a world that is too closely related with each other. This is a good setting for it provides connection between societies and they become more engaging with each other, but this also offers a problem of conflict. Instead of keeping conflicts regional and between states alone, the conflict becomes a global concern or of international value.
There is a challenge in this shrinking of space and the disappearing of borders in terms of national identity. As stated above, although globalization helps nations to interact with each other, but it does not eliminate the importance of the state-nation or the government. Yet, the challenge of globalization is how nations can keep their own identity in the midst of the growing interrelatedness of their culture, economics and politics. When nations lose their identity, they also their own character and the value of their nationhood, and this is a challenge that negates globalization.
Bergeron (2009) discusses how critics of globalization imagine that "nation-state has ceased (will immediately cease) to function meaningfully, that globalization had delinked the interests of governments from their "own" corporations and has compelled all governments to subordinate completely progressive agendas to the global of international competitiveness (p. 146)." This is the summary on how the World Bank, the IMF and other transnational organizations dictate the way state governments should run their countries.
Perhaps, one of the most important examples of this phenomenon is the issue on global warming. It becomes a global problem that dictates how nations should react and work. As a result, the global village almost agrees on a single fact of the reality of global warming as trumpeted by the transnational organizations created by the same state-nations to oversee them and govern how they think and act.
Approaches of Globalization in Academic Disciplines
Yet, in whatever sense, the definition and understanding of globalization is always anchored on the reality that academic disciplines have different look on it. In above sections, discussion on how business looks at globalization. It is a series of activities and transactions that make businesses to make connections with each other in the aim of growing their competitive advantage, finding new markets, and generating profits out of these advantages. This is the most common explanation and perspective on globalization because people see the phenomenon as a financial value. However, other academic disciplines see globalization in different lights and perspectives.
According to Hopper (2007), even in the social sciences there is a division on how globalization should be referred to defined; sociology, humanities, economies, and international relations have different views on globalization. Yet, these views are always true and correct because of the wide scope of globalization. It is not easy to define or isolate globalization for it transcends different fields and areas of the society. This means that the division of academic disciplines on the value of globalization is grounded on the scope of globalization itself.
And still in the human sciences, globalization can be defined as a political, economical, or natural phenomenon that has its own subsuming process (Zhang, 2012). Zhang noted that globalization is not just a single phenomenon, but it is a setting that fall out of the established academic disciplines and must be defined in a broader perspective. In this interdisciplinary definition, globalization is "not a cause but a consequence; it is an effect, not a source, a rationalization, not a reason (Zhang, 2012, p. 59)." Based on this understanding, globalization becomes a setting that changes the value of a specific academic discipline, rather than a holistic approach of explanation.
Critical Analysis – Economist and Sociologist
Two of the most important academic disciplines that look at globalization in a different light are: economics and sociology. The economist view is focused on the internationalization of the market, the growth of trade, and financial outflows through nations, while the sociologist view is more on the overlapping and international distribution of culture and the way communication has changed globalization.
As I have stated above, the different perspective and view of globalization according to the academic discipline is not erroneous or a mistake, but rather it shows how unique the impact of globalization is. The economist view on globalization is the most common notion of this phenomenon. When people talk about globalization, it is directly linked to the openness of trade, the volume of exchange, and the relations between companies. Yet, globalization is more than just the trade volume, in the eyes of the economist.
It is the way nations forge their resources and their efforts to make the reality of trade. By creating bridge and pathways for trade to flourish, nations provide a way for the micro and macro sections of the economy to grow. There is a level of political atmosphere in this perspective because it involves the interaction of nations, and the institution of their polity. Globalization, in terms of economics, is not just a view of business, but how nations interact with each other in accordance to the political international governance.
On the other hand, for the sociologist, globalization is the way culture interact with each other. This is further explained on the way music and arts are shared throughout the globe. For instance, Psy's “Oppa Gangnam Style” is shared not just by Koreans, but also by people across the Middle East and other regions. As people move to work or to interact with other people, they also bring with them the culture and perspective. For the sociologist, globalization is the way people move or migrate, integrate and interact with other in a more humane way, rather than in the economic sense.
Conclusion
Skeptics may not believe that globalization, but the examples and situations show that it is really a phenomenon that we are facing and embracing in today's generation. Globalization provides a way for the advancement of the world's objectives and unity. It forges nations to talk with each other, form alliances, and ensure proper relations. In fact, this is an important part of the world's progress today. Globalization provides a way for progress and peace to happen.
Yet, in all the differences of views on globalization, it is impossible to separate them from each other. If sociologist insists that globalization is characterized by cultural exchange, the question is what factors motivate this exchange? Business interactions provides a way for people to migrate and share culture. But still, it is difficult to say that globalization is limited to economics only because business is run by people and people have their values and perspectives. This means that all academic disciplines and perspectives in globalization are overlapping with each other to define globalization in a more succinct and proper manner.
Overall, globalization is a reality that encompasses the lives of people. This is not isolated to a certain aspect of the person alone, but it transcends the totality of the person. There are various explanations in globalization, but the impact provides a summary of all. Today, people can interact with each other, businesses can work together regardless of time and space, and culture is shared for people to be enriched and develop better lifestyle.
References:
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Brömme, J. (2011). Globalization and Culture in the Context of Intercultural Management. GRIN Verlag.
De la Hesa, G. Winners and Losers in Globalization. John Wiley & Sons.
Held, D. (1999). Global Transformations: Politics, Economics and Culture. Stanford University Press.
Hopper, P. (2007). Understanding Cultural Globalization. Polity.
Jones, A. (2006). Dictionary of Globalization. Polity.
Körner, J. (2011). International Trade – Multinational Corporations and Technology Transfer. GRIN Verlag.
Levitt, T. (1983). The Globalization of Markets. Harvard Business Review. Retrieved from http://hbr.org/1983/05/the-globalization-of-markets
Prasad, R. (2011). Globalization of Mobile and Wireless Communications: Today and in 2020. Springer.
Ritzer, G. (2012). Globalization: A Basic Text. John Wiley & Sons.
Zhang, L. (2012). The Concept of Humanity in an Age of Globalization. Vandenhoeck & Ruprecht.
