Globalization: Definitions

Globalization is a trend toward increasing interdependencies among world markets and the diffusion of

• New ideas• Technologies• Products• Services and• Lifestyles

Through international markets.

Globalization: Components

Globalization comprises two components:

• Modernization

• Westernization

Globalization: Components

Globalization comprises two components:• Modernization: involves the upgrading of

the technologies and living standards as new ideas, technologies, products, and services diffuse through the world.

Globalization: Components

Modernization:

Transfer of technology jumpstarted modernization movements in many

countries as scientific and technological advances have upgraded national lifestyles

and aided efficient resource use.

Globalization: Components

Westernization: • involves the emulation of lifestyles

particularly, those of Americans and Western Europeans

Globalization: Components

Westernization:

Up to the 20th century, it was western Europe trying to dominate the World culture. In the 20th century, it was the turn of the USSR and the communist movement to try to be the dominant global philosophy. Now it’s the US’s and Hollywood turn.

Challenges to Westernization

Westernization (monoculturalism) is challenged by other countries because of:

• Undermined their religious values

Challenges to Westernization

Westernization (monoculturalism) is challenged by other countries because of:

• Undermined their religious values • Encourage individualism

Challenges to Westernization

Westernization (monoculturalism) is challenged by other countries because of:

• Undermined their religious values • Encourage individualism• Challenge the hereditary social class structure and

privileges.

Globalization: Periodization

Globalization can be classified in three eras:

Exploration to 1500

Colonization 1500-1900

Internationalization 1900 to present

Globalization: Exploration to 1500

During this period:

• villages were formed which allowed for division of labor to produce goods and services

Globalization: Exploration to 1500

During this period:

• villages were formed which allowed for division of labor to produce goods and services

• infrastructure (roads) were built to connect communities and as a result, Regional markets were created

Globalization: Exploration to 1500

During this period:• villages were formed which allowed for

division of labor to produce goods and services

• infrastructure (roads) were built to connect communities and as a result, Regional markets were created

• transportation systems were built to connect regional markets into national markets.

Exploration to 1500During this period:• villages were formed which allowed for division

of labor to produce goods and services• infrastructure (roads) were built to connect

communities and as a result, Regional markets were created

• transportation systems were built to connect regional markets into national markets.

• As national markets became constrictive, businesses looked outward for expansion.

Globalization (1500 –1900): Colonial era

This era is replete with wars, conquests, colonization, and trade.

Globalization (1500 –1900): Colonial era

This era is replete with wars, conquests, colonization, and trade. Foreign domination and influences were magnified through diffusion catalysts.

Globalization (1500 –1900): Colonial era

This era is replete with wars, conquests, colonization, and trade. Foreign domination and influences were magnified through diffusion catalysts. These catalysts (ideas, philosophies, and technical innovations) increased the speed, efficiency, and effectiveness of he movements of ideas and goods between and within nations.

Globalization (1500 –1900): Colonial era

diffusion catalysts include:

• Development of mega languages: means of communication of ideas and philosophies

Globalization (1500 –1900): Colonial era

diffusion catalysts include:

• Development of mega languages:

• Advances in arms and military capabilities: means of subjugating and controlling colonies.

Globalization (1500 –1900): Colonial era

diffusion catalysts include:

• Development of mega languages

• Advances in arms and military capabilities

• Writing and printing technologies: Spreading the knowledge beyond individuals and establishment of education system

Globalization (1500 –1900): Colonial era

diffusion catalysts include:

• Development of mega languages

• Advances in arms and military capabilities

• Writing and printing technologies

• Transportation innovation: The steam engine brought markets closer.

Globalization (1500 –1900): Colonial era

diffusion catalysts include:• Development of mega languages• Advances in arms and military capabilities• Writing and printing technologies• Transportation innovation• The industrial revolution (1750-1830): wide

spread use of cast iron, knitting machines, gun powder, and electric generators revolutionized production and trade.

Globalization (1500 –1900): Colonial era

diffusion catalysts include:• Development of mega languages• Advances in arms and military capabilities• Writing and printing technologies• Transportation innovation• The industrial revolution (1750-1830

• Advances in communication (telephone and telegraph): facilitated information flows between and within national markets and aided supply chain mechanism.

Globalization (1500 –1900): Colonial era

diffusion catalysts include:• Development of mega languages

• Advances in arms and military capabilities

• Writing and printing technologies

• Transportation innovation

• The industrial revolution (1750-1830

• Advances in communication (telephone and telegraph

• Retail establishments: provided the public with the ability to see and buy new products and services.

Globalization: Historical Background

Modern International corporation 1900-Today.

1900-1945 Company internationalization

1945-1980 Increasing international competition

1980 – present Globalization.

1900-1945 Company internationalization

• Colony based subsidiaries were established

• 1st WW, depression of 20s and 30s, and 2nd WW slowed and curtailed these activities

1945-1980 Increasing international competition

• FDI by the US based companies took off and established a firm foothold in Canada and Western Europe.

Globalization: 1980 – present

Major catalysts for globalization:

• International trade (GATT and its replacement WTO, IMF, World Bank, and the UN)

Globalization: 1980 – present

Major catalysts for globalization:• International trade (GATT and its replacement WTO, IMF,

World Bank, and the UN)

• Because of inertia in opening the markets internationally, countries created trade blocs as intermediate step to globalization (EU and NAFTA).

Globalization: 1980 – present• International trade (GATT and its replacement WTO, IMF, World Bank,

and the UN)

• Because of inertia in opening the markets internationally, countries created trade blocs as intermediate step to globalization (EU and NAFTA).

• FDI. Initially this was done in resource rich countries. Later it became a tool for exploiting markets in colonies. After 1945, it became a tool for efficient seeking companies to use cheap resources in developing countries willing to host them.

Globalization: 1980 – present

Major catalysts for globalization:• International trade (GATT and its replacement WTO, IMF,

World Bank, and the UN)• Because of inertia in opening the markets internationally,

countries created trade blocs as intermediate step to globalization (EU and NAFTA).

• FDI. Initially this was done in resource rich countries. Later it became a tool for exploiting markets in colonies. After 1945, it became a tool for efficient seeking companies to use cheap resources in developing countries willing to host them.

• Global movement toward capitalism.

Globalization: 1980 – present

Major catalysts for globalization:• International trade (GATT and its replacement WTO, IMF, World Bank,

and the UN)• Because of inertia in opening the markets internationally, countries

created trade blocs as intermediate step to globalization (EU and NAFTA).

• FDI. Initially this was done in resource rich countries. Later it became a tool for exploiting markets in colonies. After 1945, it became a tool for efficient seeking companies to use cheap resources in developing countries willing to host them.

• Global movement toward capitalism.

• Technology and global media: satellite, computers, internet.