Globalization and Its Key Features - Essay Example

Globalization and its key features “It has been said that arguing against globalization is like arguing against the laws of gravity” Kofi Annan Introduction: The term globalization has become widely popular over the past couple of decades permeating into diverse fields including social, political, technological, economical as well as literary. It refers to a mega-phenomenon which has made its presence felt in almost all aspects of human life, thus becoming the key driver which is shaping contemporary trends and re-structuring the economic framework. The concept of globalization has often been widely been used to describe a general change in trends in almost every aspect of our lives, thus indicating a paradigm shift triggered by certain key elements with technology, being in the centre of it all. On account of such transformations taking place on a massive scale the concept of globalization has also been described by many as the end of mankind’s ideological evolution (Cazdyn and Szeman, 2011: 25; Herod, 2009: 39); of renewable natural resources (Brauch et al., 2009: 679); as well as the end of the world – thus inciting controversies; both - within and beyond the academic and literary circles. As the process of globalization intensifies, the debates, controversies and criticisms surrounding the same are likely to grow simultaneously. This paper aims to discuss various key aspects of globalization beginning from the general definitions of the term to the key features, impacts and implications, theoretical underpinnings of the concept, and criticisms as well as counterviews surrounding it. Definitions: The term globalization has been defined differently by different authors. Some of these definitions are included as follows: According to Giddens (1990) globalization is defined as "the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa" (qtd. in Hothi, 2005 p. 10). Walters (2001) describes globalization as "A social process in which constraints of geography on social and cultural arrangements recede in which people become increasingly aware that they are receding" (p.5). Hirst and Thompson (1996) define the term as "a myth suitable for a world without illusions, but it is also one that robs us of hope" (qtd. in Glenn, 2012 p. 46). Ohmae (1992) defines the term merely as "the onset of the borderless world" (p.14) According to Friedman (1999) globalization is "the inexorable integration of markets, nation-states and technologies to a degree never witnessed before- in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before, and in a way that is also producing a powerful backlash from those brutalized or left behind by this new system... Globalization means the spread of a free-market capitalism to virtually every country in the world" (p.7-8). As observed from the above definitions, the concept of globalization is diverse and encompasses a wide range of issues and aspects within its gamut, thus indicating its vast outreach and scope. It can be deduced that globalization is a trans-border process fuelled by technological developments and impacting simultaneous changes in political, social, economic, and cultural structures worldwide. The key features of globalization, based on the definitions provided above, are described in the following section. Key features: Some of the key features of globalization include liberalization of international trade, privatization and deregulation of markets and trade policies, global integration of humanity, compression of spatial dimensions, etc. to name a few. Liberalization of international trade: The liberalization of global trade and the increase in cross-border trade is one of the key characteristics of globalization. There is a significant rise in international trade due to liberalization of international trade policies. The liberalization of international trade entails free and uninhibited exchange of goods and services across international borders as well as the unrestricted investments in overseas projects, i.e. Foreign Direct Investments (FDI) (Friedman, 2000). Although the liberalization of trade is known to cause a significant rise in world trade, leading to increase in productivity and massive economic growth; the trend is viewed to be discriminatory by various critics. This is mainly because it is argued that industrialized countries (comprising of most of the developed countries in the Western world) have managed to garner massive share in the economic trade as compared to the developing countries (OLaughlin, Staeheli, Greenberg, 2004). Privatization and deregulation: The privatization and deregulation of economic policies and markets refers to the change in co-ordination and governance structures from public to private corporate sectors and the rise in significance of private sectors over public sectors (Kalb, 2000). Globalization has caused a dramatic change in the organizational structures with a greater emphasis on privatization of services which were once solely controlled and managed by governmental organizations. These services post globalization have been outsourced to private institutions (Beishem, Young, Finger, 2012). Privatization gained momentum due to increased globalization and the resultant increase in intense competition thus invoking the superiority of private sector over the public sector. The effects of the same were visible in the UK as well as U.S. and other industrialized nations which began a massive drive to convert and transfer state-owned assets to private institutions. The drive to privatization in the U.K was justified with the reasoning that the reduction in public sector is inevitable in order to protect the business-like approach and deliver fundamental change in the organizational structures as well, by completely doing away with the bureaucratic, and rigid British hierarchy and giving way to nation-wide reform to break the labour market rigidities and promote flexibility, self-employment and growth (Clarke & Newman, 1997). Other key features of globalization include: development of hyper growth and uninhibited exploitation of natural renewable resources as well as newer markets that enable economic development and growth; integration of culture and economy fuelling homogeneity and intense promotion of the concept of consumerism; de-structuring of public health, social as well as environmental models; major shift in power structures of democratic nation-states and shifting it to global corporate bureaucracies; increase in environmentally harmful export oriented production and the consequent disruption of natural environment (Cavanagh & Mander, 2004). Theoretical interpretation: Various theories of globalization have been put forward by researchers to explain, assess, evaluate and describe the phenomenon. Divergence theories (Hofstede, 1984; Triandis, 1983) focus largely on the cultural diversity and the manner in which such cultural differences affect and impact organizational functioning and experience. Blurring of international boundaries on account of globalization has resulted in blurring of spatial and time dimensions thus giving rise to new global workplace dominated by people belonging to diverse cultures and nationalities. Coping with such diverse workforce is a key them addressed and discussed by divergence theories (Contractor, 2002; Gannon, 2001; Mitroff, 1987). In contrast convergence theories (Bartlett & Ghoshal, 1989; Hickson, Hinings, MacMillan, and Schwitter, 1974) emphasizes on structural adaptation in the midst of the apparent diversity and focuses on the increased flexibility, responsiveness and knowledge sharing in this highly diverse globalized and networked world (Nohria & Berkley, 1994; Miles & Snow, 1995). On the other hand there are various other sociological theories such as the global society approach, the global capitalism approach, the world system approach, and the global culture approach are discussed in brief, in the following section. The world system approach: This approach is mainly based on the key differences between the core, semi-peripheral, and peripheral countries with regard to their changing roles in the international division of labour which is largely dominated by the capitalist world-system (Chase-Dunn & Babones, 2006: 64). The global culture approach: The global culture approach refers to the transformations that the world society is exposed to on account of globalization. These transformations refer to the homogenizing of cultures, and the blurring of national / local ideologies and identities. As organizations transcend geographical boundaries it is imperative for them to follow a uniform code of conducting business, thus resulting in homogenizing of cultures. This approach describes the rise in global consciousness and its resulting impact on governance systems, communities as well as security (Chase-Dunn & Babones, 2006: 65). Impact and implications: Globalization has dramatically transformed the global communities and the impacted almost all aspects of our daily lives. Triggered by technological advancements it has resulted in a domino effect changing the manner in which we perceive the world. Although the term has been and continues to be used predominantly to refer to an economic phenomenon, the reality is that it is all pervasive and entails far reaching effects in social, political, and cultural aspects of our lives. Public sector organizations have shrunk considerably giving way to private sector organizations, and multinational companies have become key players in the contemporary economy (Held, McGrew, 2002). Criticisms and controversies: Globalization has intensified the integration of world markets resulting in significant benefits to almost all sectors of the economy. It has enabled free movement of factors such as labour, capital, technological knowhow, etc thus maximizing economic benefits and effectiveness on a global level. However regardless of the immense benefits offered by globalization the process is not averse to negative repercussions. Globalization has stirred up several controversies ever since its introduction. It was faced with massive demonstrations against the World Trade Organization, the International Monetary Fund, and the World Bank to oppose the ongoing form of globalization (Sharpe, 2002: 234). Critics of globalization have always claimed that globalization promotes inequality; is largely in favour of industrialized nations; and is detrimental to the growth of the poor and developing economies, since the key aim of liberalization of international trade is to boost profitability. The power is hence tilted in favour of the rich elites who are represented by giant multinational corporations in nexus with government bodies, thus marginalizing the poor (Harrison, 2007). Conclusion: Globalization is a mega trend which has and is likely to continue to influence the shaping of the contemporary economy. The concept has its fair share of proponents and opponents who vehemently support their respective ideologies. Although neither of their claims can be denied, the impacts – both positive as well as negative, are apparent and highly visible in the form of a highly integrated world economy, massive investments, and financial inflows. As the key driver of the phenomenon, i.e. technology, continues to evolve, the effects and repercussions of globalization are likely to grow and evolve simultaneously, bringing about a stable and effective system backed by variability. References: Bartlett, C., & Ghoshal, S. (1989). Managing across borders: The transnational solution. 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