Chapter 1-The Study of Globalization
Chapter 1-The Study of Globalization
Chapter 1-The Study of Globalization
LEARING OUTCOMES:
DEFINITION OF GLOBALIZATION
The following are the many varying definitions of the term globalization:
1. Globalization is the increasing interaction of people, states, or countries through the
growth of the international flow of money, ideas and culture. Thus, globalization is
primary focused on economic process of integration that has social and cultural aspects.
2. It is the interconnectedness of people and business across the world that eventually
leads to global, cultural, political and economic integration.
3. It is the ability to move and communicate easily with others all over the world in order
to conduct business internationally.
4. It is the movement of goods, services, and people across the world in a seamless and
integrated manner.
5. It is the liberalization of countries of their impact protocols and welcome foreign
investment into sectors that are mainstays of its economy.
6. It refers to countries acting like magnets attracting global capital by opening up their
economies to multinational corporations.
INDICATORS OF GLOBALIZATION
● JET ENGINE, THE INTERNET, E-BANKING, E-BOOKS, E-BIKE, THE MRT, LRT AND OTHER
INVENTIONS OF SCIENCE AND TCHNOLOGY ARE ATTRIBUTABLE TO THE SPREAD OF
GLOBALIZATION.
● Environmental changes challenges such as global warming, cross boundary water, air
population, and over fishing of the ocean are linked with globalization
● Globalizing process affect and are affected by business and work organization,
economies, socio-cultural resources and the natural environment.
● Academic literature commonly subdivides globalization into three (3) major areas”
1. Economic globalization
2. Cultural globalization
3. Political globalization
NATURE OF GLOBALIZATION
Globalization is a conglomerate of various multiple units located in the different parts of the
globe which are linked by common ownership.. The multiple limits draw on parts of the globe
but all are linked by common ownership. Multiple units draw a common pool of resources, such
as money, credit, information, patents, trade names and control systems. The units respond to
some common strategy. Product presence is in different markets of the world. Human
resources are highly diverse. Transactions involving intellectual properties such as copyrights,
patents, trademarks, and process technologies are across the globe.
DIMENSIONS OF GLOBALIZATION
1. Planning to expand the business on a worldwide scope
2. Giving up the distinction between domestic and foreign market and instead developing
a global outlook of such business.
3. Locating the production and physical facilities of the business by considering global
business dynamics irrespective of national consideration.
4. Creating product development and production planning on a global market sphere.
5. Global sourcing of the factors of production such as raw materials components,
machinery, technology, finance, and others that are obtained from the best source
anywhere in the world.
6. Global orientation or organization structure and management culture.
STAGES OF GLOBALIZATION
STAGE 1
The first stage is the arm’s length service activity of an essentially domestic company/institution
which moves into new market overseas by linking up with local dealers and distributors.
STAGE 2
The company/institution takes over these activities on its own.
STAGE 3
The domestic –based company institution begins to carry out its own manufacturing marketing
and sales in key foreign markets.
STAGE 4
The company institution moves to full insider position in these markets supported by complete
business system including Research and Development (R&D) and engineering. However the
headquarters mentally continues to dominate.
STAGE 5
The company/institution moves towards a genuinely global mode of operati0n. Global
localization happens, that is, the company/institution serves local customers in markets around
the globe responding to their needs. This requires an organizational transition i.e the company
must denationalized its operations and create s system of values shared by global managers.
MERITS/ADVATAGES OF GLOBALIZATION
1. Global competition and imports keep a lid on prices such that inflation is less likely to
derail economic growth.
2. An open economy spurs fast innovation with fresh ideas from abroad.
3. Export jobs often pay more than the other jobs.
4. Unfettered capital flow keeps interest rates low.
5. Living standards go up faster.
6. Productivity grows more quickly when countries produce goods and services in which
they are of comparative advantage.
7. Countries liberalize their visa rules and procedures so as to permit the full flow of
people from country to country.
8. It results in freeing up unproductive sector to investment and the productive sector to
export related activities resulting in a win-win situation for the world economy.
DEMERITS/DISADVANTAGES OF GLOBALIZATION
1. Several people lose their jobs when companies import cheap labor or materials or shift
production abroad.
2. Workers face pay cut demands from employers who often threatens to export jobs.
3. Unregulated globalization can cause serious problems to poor and developing countries
in terms of labor force, wages, benefits, job termination, and others.
4. High foreign stake on industries where it is not necessarily needed could affect
economic growth of domestic enterprise.
5. Sovereignty of a country and company/institution may be at stake.
Finally, based on the above philosophical dimensions underlying globalization is the free
movement of goods, services and people across the world in a seamless and integrated
manner. It can be thought of to be the result of the opening up of the global economy and the
concomitant increase in trade between nations in this contemporary world.
The point her is that globalization has had positive and negative effects and therefore a deep
approach is needed when discussing the concept. What is undeniable is that globalization is
here to stay hence, it is better for countries in the global economy to embrace the concept and
live with it in this contemporary world.
Name:______________________________________________Score:____________
Date:_______________ ________________________________Time_____________
I. Words to know and understand (define the following terms according to your
understanding (don’t copy from the lecture.)
1. Globalization
2. Contemporary
3. Contemporary world
4. Philosophy
5. Dimension
II. Brush Up
a. What would be the working definition of globalization for your course?
b. Identify five stages of globalization
c. What is the importance of studying globalization?
d. When was the beginning of the contemporary world?
e. Why is the word “globalization” given emphasis or importance in today’s
contemporary world?
f. Identify the reasons for globalization
g. What are the indicators of globalization?
h. What is the theory of comparative advantage?
III. Draw or post inside a box the following data/information and write a brief
description of what you have drawn
1. Contemporary World
2. The Phenomenon of globalization
3. Cyber world _(The world tomorrow)
IV. Write an essay consisting of 150-300 words with this topic “What Globalization
Means to Me”
V. REFLECTION TIME
Direction: Below is a reflection figure that looks like a human figure. Determine
what:
1. You have learned (the knowledge that serves as your foundation to stand
and keep.
2. The things that you realized and appreciated (attitude toward learning)
3. The things you have discovered (skills that you will cherish in life.)
Fill each part of the reflection figure. Share it to the whole class.
REFLECTION FIGURE