The term globalization is now used with increased frequency but has variable meanings in different contexts.

s. There is a necessity to recognize the structural implications of this revolution especially when dealing with the problem of how to do strategic planning. Defining globalization

Globalization has changed the way we think about the world and borders are now reduced. Crossborder structures are strengthened and political and legal institutions no longer represent insurmountable obstacles. Globalization has some negative effects. Indeed it has radically influenced how we live our lives and this change can be neither controlled nor reversed. The most general sense of globalization is applying to the whole earth Political meaning

Globalization increases dependencies between national and international bodies. In practice, this is the development of a New World Order dominated by the USA. The benefits of economic globalization are enjoyed only by the countries that are prepared to accept or at least give up lipservice to Western concepts of democracy or for countries like China that are powerful enough to ignore calls for universal human rights. The economic damages ensued from non-compliance with global standards has serious repercussions on the social and cultural life of the community. Global trade

Globalization cannot be defined as simply as a quantitative increase if trade. Global capital

Globalization theory commonly refers to the ever-increasing mobility of capital across the globe and the impact it has on national economies.

Capitalism: investment of finances in creating new productive capacity. International capitalism: investment of funds earned from one country in a project based
elsewhere. In 1999, GOWAN pointed to a recent shift of modern capitalism that can be associated with globalization. There is a difference between money-dealing capitalism and employment of capital in a productive sector. In the first case, capitalists aim to make profits from trading funds regardless of the sector the profits arrive

In the second case, capitalists invest money in the products and goods which are sold at a profit and possibly contribute to social life. The global industries are industries which are able to operate across national boundaries with a minimum of disruption. This was made possible by the lack of government regulations and common operating procedures and structures. The development in information technologies mean that capital transactions can be made almost instantaneously to anywhere in the world and it decreases the needs for large investments in premises and staff. However, globalization cannot eliminate weaknesses and sometimes risks are increased. There are 3 major risks: Operational risks (associated with technological infrastructure, security, integrity of the data, system availability, internal control and auditing, outsourcing) Reputational risks Legal risks

Global / Multinational companies

In order to avoid confusion, companies with multinational interests relate their investment and customers in a range of ways Multinationals are defined as these that own and manage investments located in countries other than that of headquarters The management structures vary widely because different companies have different needs to control relations between the headquarters and foreigner investment. Global production

It is the fact of developing and selling in response to common demands in different nations. It leads to the development of a standardized good or service that appeal to the shared needs. However, no truly global product exists. A product is varied in order to meet the different needs in the different countries. Roots of globalization

Globalization is a new phenomenon (1970) and comes from the internationalization of finance and production and the development of information technologies. Internationalization of finance

Disasters of WW1, the slump of 1930 and WW2 ended the autonomy of national financial systems. The Bretton Woods system was designed to create financial stability. Exchange rates were fixed within 10%. In 1972, Bretton Woods collapsed and the financial system changed radically. The foreign currencies were free from centralized control and they could be traded for each other across the borders. In the 90, the growing strength of European and Asian economies forced the USA into a

greater awareness of its need to protect its own economic supremacy. Then, the WTO and the IMF (International Money Funds) were created. The IMF is used to give American companies access to foreign markets without facilitating foreign investments in the US. Internationalization of production

After 1945, the American production system became increasingly global. Indeed, all the aspects of production processes were centralized. In 1970, Toyota began to experiment with the internationalization in a way that the manufacture of a complex good could be diversified to different locations. The different parts were then assembled at a location close enough to sales outlets. All this was simplified by the internationalization of production, the capital could be moved across national borders to purchase raw material, plants Both of these 2 aspects introduced major structural changes, but globalization was made possible because of a 3rd factor: the development of information technologies. Globalization and Human Resources

The cost of labor is the major factor determining production costs. This explains outsourcing and offshoring. The jobs are transferable under conditions that: Production processes can be fragmented without loss Production output can be transferred between locations without inducing significant losses Same skills are available in different locations Nowadays, MNCs design jobs so that they can be transferred. Impact of migration

Migrants have provided countries with the cheap labor force needed for continuing economic growth. The only exception is Japan in the way that only the migrants with Japanese origins were allowed to enter the country. In theory, movements of working population decrease economic and cultural differences between the countries. Effects of mass migration

Causes problems in both countries from which the migrant come (traditional social structures are undetermined by mass emigration of the working population, it endangers social and cultural structures) and the targeted country to which migrants move (inflames resentment and insecurity among those who feel their economic and cultural identity is at risk) In general, people prefer to move where standards of living is the highest and economic opportunities are the greatest. Globalization does not spread economic opportunities equally throughout the world, indeed it focuses in societies that are already prosperous. Their intellectual and artistic cultures are enriched by the influx of new ideas and values. Effects of mass immigration

Migrants are often not integrated in the welfare systems, which can give immigrants children less chances to access education. Attitudes take time to change and migrants are sometimes rejected by the mainstream. Cultural stimulus to globalization

Globalization refers and reflects values such as: Relatively high tolerance of competition and readiness for conflict Drive to make change High individualism Conviction that one has the right to impose ones perception of right and wrong on other cultures

Globalizers: a culture group?

Globalization reflects an ideology of modernity and the assumption that a single, universal community can be created, founded on principles of reason that are accepted by everyone. Most of the globalizers speak English; have similar tastes in food, clothing, cultural pursuits and sports. According to Hoffestede, they do not constitute a cultural group! Globalized control

Globalizers do not exercise direct role on national governments, but they have a strong indirect impact. Indeed, they use their organizations to persuade national governments with the formulation and the implementation of strategies for globalization. They have less need to respond to national interests. Effect: drives towards a globalized rationalism outside control of local populations. Impact of cultural engineering

In a globalized world, losers will always be losers because they compete with giants without (or with a few) resources. This creates frustration throughout the populations and can lead to the formation of extremists groups.