Competitive Advantage: Globalization Explained
Competitive Advantage: Globalization Explained
Competitive Advantage: Globalization Explained
Introduction to Globalization
A. Defining Globalization
Globalization is the spread of products, technology, information, and jobs across national borders and
cultures. In economic terms, it describes an interdependence of nations around the globe fostered through
free trade.
Globalization defined as “the broadening and deepening of national economies into a worldwide market for
goods, services and capital”2 is in fact nothing new.
Example: Indian spice trade dramatically changed tastes and culture in Europe.
Globalization motives are idealistic, as well as opportunistic, but the development of a global free market has
benefited large corporations based in the Western world. Its impact remains mixed for workers, cultures, and
small businesses around the globe, in both developed and emerging nations.
Globalization Explained
Corporations gain a competitive advantage on multiple fronts through globalization. They can reduce
operating costs by manufacturing abroad. They can buy raw materials more cheaply because of the reduction
or removal of tariffs. Most of all, they gain access to millions of new consumers.
This kind of globalization includes the sharing of ideas, knowledge and cultural norms between nations.
Examples include the popularization of books, movies and shows across the world, such as the "Harry
Potter" or "Twilight" series, which were globally recognizable. Social and cultural globalization tends to
flow in one direction, unlike other forms of globalization. Developed countries such as the United States,
United Kingdom and Canada share cultural information with less-developed countries, rather than the
other way around. As a result, this kind of globalization has been said to erode cultural differences that
make nations unique.
Political Globalization
Political cooperation between different countries is a form of globalization that is used to prevent and
manage conflict. For example, global organizations such as the United Nations and the World Trade
Organization were created to diffuse political issues and maintain order on an international scale.
Intergovernmental entities help nations to develop common laws and policies and discuss immigration
issues. Political globalization is also a way for countries to work toward aspects that affect everyone, such
as climate change.
Politically, globalization has shifted attention to intergovernmental organizations like the United
Nations (UN) and the World Trade Organization (WTO).
Legally, globalization has altered how international law is created and enforced.
Economic Globalization
The economies of nations are interconnected through the exchange of resources, products and money. As
a result, there isn’t a country today that operates on its own in isolation. Countries that are rich in natural
resources, such as oil for example, sell it to other countries for money or in exchange for other materials,
such as lumber. Similarly, countries across the globe sell crops and food to other nations that lack them,
which helps their own economies in addition to those of other countries. As a result, when an economy
crashes, it affects other economies around the globe because they are closely interconnected.
The banking crisis in the United States in 2007 led to a global financial crisis that affected other countries
including Canada and China.
Technological Globalization
This kind of relationship between nations is as a result of the infrastructure in place for television, radio,
telephones and the internet. Traditionally, technological globalization used to be only available to the
upper classes that had access to them. Now, there are many people in developing countries who have
access to cell phones and the internet, making it easier for them to connect to people in other countries
around the world. Technological globalization makes it possible for countries to connect in other ways,
such as financially through sending loved ones money across the globe or culturally by watching movies
from other nations.
globalization of information. This is the concept that knowledge is shared among nations and groups of
people for the betterment of the world
Ecological globalization is the idea that the Earth is a single ecosystem rather than a group of separate
ecosystems. As a result, there are international organizations and agreements that deal with issues like
climate change, biodiversity and wildlife preservation on a global scale, spanning seve ral countries.
Globalization Advantages
Proponents of globalization believe it allows developing countries to catch up to industrialized nations
through increased manufacturing, diversification, economic expansion, and improvements in standards of
living.
Outsourcing by companies brings jobs and technology to developing countries. Trade initiatives increase
cross-border trading by removing supply-side and trade-related constraints.
Globalization has advanced social justice on an international scale, and advocates report that it has focused
attention on human rights worldwide.
When nations work together to fund common goals, then more money becomes useful for needs other than
national defense
By focusing on globalization, we could reduce child labor issues. Human trafficking concerns would be limited
because of more border freedom. People could live, work, or go where they please with fewer restrictions,
making it easier to chase their dreams.
When we’re able to move toward a global-centric society instead of a nation-centric one, these issues will
continue to decline over time.
5. Globalization would remove tax havens for wealthy individuals and businesses.
Tax havens are defined as either a country or independent area where taxation levies are at low rates. They
offer foreign businesses and individuals an opportunity to keep their profits in local institutions with little or
no liability.
Globalization reduces this issue because it eliminates the administrative structures in place which allow the
wealthy to hide their funds from being taxed. Greater transparency would lead to better funding of social
programs, which could reduce poverty and food insecurity over time.
6. Globalization would help the developing world progress faster.
Most of the world today is not developed. By reducing border restrictions, creating common payment
formats, and opening product access by reducing export barriers, more people could improve their way of
life. Higher incomes often lead to lower maternal and infant mortality rates too, which means we’d be saving
lives with this effort.
When you look at the per capita consumption rates of energy globally, one American consumes as much
energy as 31 people in India. If you go to a developing nation, it takes 370 Ethiopians to use the same amount
of energy that a single U.S. citizen uses to meet their needs.
Globalization would likely centralize distribution of necessary resources. With only a few controlling access to
the many, the chance to negatively impact populations on a large scale become greater when borders are
reduced.
Unless new vocational development opportunities implement with the globalization structures, the
boundaries between the developed and developing world will likely continue to exist.
9. Globalization changes how humans would identify themselves.
Humans are global citizens in some ways already. We all share the same planet, after all, so we are united
with that common ground. If we lose borders, however, we also lose a piece of our culture, ethnicity, or
family heritage. People identify themselves based on their history, so being Irish in a global world would have
less impact than it does today. We already seen how this works when Texas came into the U.S. after being an
independent nation. Some Texans label themselves as such first, but many see themselves as an American
before being a Texan.
Disadvantages of Globalization
One clear result of globalization is that an economic downturn in one country can create a domino effect
through its trade partners. For example, the 2008 financial crisis had a severe impact on Portugal, Ireland,
Greece, and Spain. All these countries were members of the European Union, which had to step in to bail out
debt-laden nations, which were thereafter known by the acronym PIGS.
Globalization detractors argue that it has created a concentration of wealth and power in the hands of a
small corporate elite which can gobble up smaller competitors around the globe.
Globalization has become a polarizing issue in the U.S. with the disappearance of entire industries to new
locations abroad. It's seen as a major factor in the economic squeeze on the middle class.
For better and worse, globalization has also increased homogenization. Starbucks, Nike, and Gap Inc.
dominate commercial space in many nations. The sheer size and reach of the U.S. have made the cultural
exchange among nations largely a one-sided affair.
Metaphors of Globalization
“A Metaphor occurs when a unit of discourse is used to refer unconventionally to an object, process or
concept, or establishes in an unconventional way a syntactic relationship between two different words. This
unconventional act of reference… is understood on the basis of similarity, matching or analogy involving the
conventional referent of the unit and the actual unconventional referent.”17
The metaphor of Globalization emerges as a guiding principle at the end of the 1990s. It is a term that has no
reference in any of the world’s well-known encyclopedias before the early 1990’s. Neither Larousse, nor
Encyclopedia Britannica nor the Brockhaus offer any kind of definition of the term before then.4 Claiming
that Globalization as the integration of the world economy has existed throughout history is however an
important dimension of the its present metaphorical use.
Globalization provides the metaphorical setting of the Post Cold War era. It is anything but a “natural”
historical evolution. It is the result of human views, beliefs and politics. Globalization is a human artifact that
is being positioned as a natural phenomenon.
Globalization is a metaphor that fits a myth based on facts and figures. The metaphor of Globalization offers
ONE particular perspective on the global trading and financial order and dismisses other perspectives by
declaring them as unrealistic or infeasible. Barthes sees myths as facts that are chosen by a historical
discourse. The myth is not a system of facts, but a relationship that a period of time has to facts. Facts are
not being destroyed, but naturalized. Metaphors are an important toolkit to achieve this goal. Through
metaphors certain aspects are viewed as normal – common knowledge - whereas others are forgotten.6 The
mythic system to which the metaphor of Globalization belongs allows and sometimes forces the speaker to
structure facts in one specific way, to tell one (coherent) story and declare other views as wrong, ridiculous
or foolish.7
Globalization imposes to think in terms of winners and losers. In a surprising way the metaphor of
Globalization refers to the domain of football. States compete against each other and aim to be at the top of
international rankings. But what will happen to states that disqualify? Will they get a new coach? Will they
have to replace their team/citizens? Who will want these non-performing teamplayer/citizens?
The metaphor of Globalization shows remarkable asymmetries: Asymmetries of ownership and asymmetries
of access. The word “Globalization” literally encompasses the entire world, but what kind of Globalization
can we mean if we speak at the same time of marginalization and exclusion? What kind of understanding of
the integration of the world does Globalization encompass if it can not do without the concept of insiders
and outsiders?
Globalization is an historical process that began with the first movement of people out of Africa into other
parts of the world. Traveling short or long distances, migrants, merchants and others have delivered their
ideas, customs and products to new lands. The melding, borrowing and adaptation of outside influences are
found in many areas of human life.
historical origins of globalization are the subject of ongoing debate. Though many scholars situate the
origins of globalization in the modern era, others regard it as a phenomenon with a long history. Some
authors have argued that stretching the beginning of globalization far back in time renders the concept
wholly inoperative and useless for political analysis.
Globalization Theories
Dynamics of Local and Global Cultures
Globalization and Regionalization