Globalisation and the Mass Media - Essay Example

Globalisation Introduction This essay deals with the assignment regarding Globalisation. The question selected for this essay is the Question 10: Outline and discuss how localisation and globalisation fit together. Provide examples from a country or sector of your choice. The essay discusses: What Globalisation is What localisation is How they fit in together in what has been described as “Glocalisation”1 by Thomas Friedman in his book “The World is Flat” Examples from a country (India) in some of the sectors where globalisation has made its mark The challenges in localising global practices and products to needs of the host country The emphasis of the essay is on how multinational companies have adapted to the host country (India) and met the challenges of “localisation” being agents of globalisation. The essay discusses the examples of several auto majors, fast food companies and global television channels and their strategies in India. The reason for choosing India as the country of choice is due to the fact that India has liberalised its economy in recent times and has opened the doors to global transnational companies which have found the market and the country to be a diverse mix of cultures and attitudes that can only be overcome by adapting to the needs of the local populace. Globalisation Globalisation can mean many things. There is the economic component of globalisation that is defined as “the integration of national economies into the international economy through trade, direct foreign investment, short term capital flows and international flows of workers and humanity in general”2. As a by product of this economic globalisation is the flow of ideas and culture across national borders. The other definition of globalisation is “the freer movement of goods, services, ideas and people around the world”3. This definition encompasses the qualitative aspects of globalisation in the sense that it goes beyond mere numbers in defining the exchange of information in a borderless world. Ever since the General Agreement on Trade and Tariffs (GATT) came into effect in the 90’s and the World Trade Organisation was established with a mandate to regulate and intervene in the disputes arising out of globalisation, the world economy has been integrated in a way that has surpassed the earlier attempts. This is noteworthy, as contrary to popular belief, trade and commerce between nations has always been the case since the first ships carrying silk, spices and muslin from the east and other exotic stuff from the west has set forth for each other’s shores. In fact, the famous voyage of Christopher Columbus is a testament to the ability of nations to seek out markets other than their own for trade. Though the world was integrated in colonial times as well, the process received a setback in the 21st century in the intervening period between the two world wars. It was only after the establishment of the Bretton Woods system that the world economy started regaining some of its interconnectedness. And the demise of alternatives to capitalism and the free market system ensured that all countries with a desire to alleviate poverty and raise the standard of living of the peoples would invariably turn to trade and commerce and utilize the “theory of comparative advantage”4 as proposed by the noted economist David Ricardo. Globalisation as a phenomenon cannot be wished away. Despite the setbacks to the process by the events in the aftermath of 9/11, Globalisation continues its inexorable march adding new strands to its already well knit thread. The successes of India and China in this decade and the successes of the so-called “Tiger economies” of South East Asia in the previous decades are proof that globalisation works. Setbacks to Globalisation due to 9/11 The attacks of 9/11 were a definite setback to the processes of globalisation5. In a sense, the world turned inwards after 9/11 with greater visa restrictions making it hard for easier movement of people around the world. Since this is a critical component of globalisation, it was a throwback to the old days of protectionism. Also, there was a movement towards localisation with countries in the immediate aftermath suspending many of the neo-liberal policies that they were pursuing till then6. But recent evidence shows that the world has effectively surmounted some of the challenges thrown up by 9/11 and is picking up steam towards the processes of globalisation. Localisation Localisation is defined as the “process of adapting a product or service to a particular language, culture and desired local look and feel”7. Localisation takes many forms for transnational companies wherein they customise and tailor their solutions for local needs. One of the alternative definitions of this process of first creating a product for local economies and then enabling it to be used for localising it for different national economies is called globalisation8. The primary examples of localisation is in the technology and computer software space where the shrink wrapped software comes in multi-lingual formats and with user manuals and other technical specifications translated to the needs of the local customers. As we shall see in the succeeding sections, the ability of a transnational firm to localise is one of the key factors in its success in the home country. Localisation as a driving force for transnational companies has been borne out by the fact that global auto majors and banks have designed specific cars and financial packages according to the country they operate in. The other forms of localisation are in the bargaining power of local unions and other interest groups in having a say in the wage structure as well as in sharing what they see as the “unequal benefits” to the owners and the workers in a globalised world. Glocalisation Glocalisation is the ability of a country to adapt itself to the challenges thrown up by the globalisation process. Globalisation has been described as a process that has not only thrown up MTV and Channel V but has also spawned numerous other “local” community radio stations as well9. This ability of the host country to absorb and assimilate the cultural and economic exchange of information and capital has made the difference between success and failure for many economies. The faster and the more versatile the economy is in making this possible, the better it is at integration into the world economy. According to Thomas Friedman in his book “The World is flat”, how well a country adjusts to globalisation depends on the kind of culture that it has. This is the defining variable according to Friedman10. He cites the instance of India which has assimilated the impact of foreign invasions in the past and like a parchment has added more and more lines above without losing its underlying ethos11. Thus a country like India has been successful in managing the overarching process of globalisation with its unique blend of adapting itself to the process without spawning reactionary movements the likes of which are evident in some of the middle eastern and gulf states. The ability to accommodate diverse points of view and arrive at a consensus has been the hallmark of India which also has the world’s largest democracy. The point about democracy being more suitable to the process of globalisation has been made by several authors though the success of China proves that authoritarian modes of government can be successful in this process as well. Examples from India In this section, we turn to some of the examples where localisation and globalisation have fit in together. We look at India and the success of HSBC bank, MTV, Channel V, Bata shoes and Mc Donald’s in their approach towards the country. These are a few of the companies that have succeeded with the blend of localisation and globalisation and we also look at the overall sectoral strategies as well. HSBC bank A bank that markets itself with the catchy slogan “The world’s local bank”12, HSBC has financial solutions that span its knowledge of local economies and which are blended with its international expertise and product range. The bank prides itself on the fact that it strikes a balance between its commitments towards the emerging markets like India and maintaining a balance between the earnings from the mature markets. For instance, it was one of the first banks to offer Internet banking in the Asian region. Initially, the service was basic and not as advanced as those in the west. But, now, the Internet banking services in India have evolved to such an extent that utility payments and the like can be handled by them. MTV and Channel V The broadcasting industry is where the blend of globalisation and localisation is acutely felt. This sector in India has adapted itself very well to the needs of the local populace and has proved to be resilient and flexible in the face of challenges thrown up by globalisation. MTV and Channel V have introduced several programs that are distinctly local in flavour. Though initially, these channels started with a mix of rock and other western music with some local bits thrown in, they have evolved to a point where their programming is very much local in flavour. The ad lines like “We are like this only” and “This is India” have found appeal among the youth that form the target audience for these channels. Going local has never been so delineated as in the case of these channels and the “Hinglish” (a combination of English and Hindi) programming that these channels offer is an excellent example of how localisation and globalisation can fit in together. Bata Shoes The name Bata is synonymous with quality and competitive pricing in India. This Czech company which is almost a household name in India has proved extremely successful in combining its global resourcing of materials with the local brands that it manufactures in India. For many people in India, it would come as a surprise that it is a foreign brand. This is testimony to the fact that the company has been successful in adapting itself to the local needs and reaping the benefits of globalisation with localisation13. Mc Donald’s This fast food major has re-invented itself to suit the palates of the host countries in all the markets that it operates. In the case of India, when it found that local tastes were so entrenched and the popularity of its global offerings of burgers was waning, it decided to introduce variants like “Mc Maharaja” and similar varieties. These have proved to be such a hit with the consumers that these are now their flagship offerings. And as we have seen in the section on how globalisation spawns localisation, there are numerous other indigenous fast food brands that have sprung up offering these variants. Thus, the cycle has come full circle and it is the consumers who stand to benefit. GM Foods One area where globalisation is receiving a setback in terms of the native populace vehemently up in arms relates to the GM (Genetically Modified) foods. The critics of globalisation have found a ready villain in the attempts of multinational companies to introduce GM foods. This is particularly true in the case of India where the introduction of GM foods has met with active resistance bordering on the hysterical, at times. While the concerns of the local population can be understood as motivated by a desire of the indigenous farming community not to lose out in the race, it has to be understood by both sides that a balance has to be achieved with respect to self sufficiency and the rights of the native people. The way to go in this is to have a “second green revolution” where foreign seeds and agricultural practices are blended with local conditions to achieve the desired level of food grain production. Big dams, Industrial development and displacement Another area of potential discontent between the force of globalisation and the opposing factors of localisation refers to the protest over big dams and the displacement that they cause. While the economic forces of globalisation demand some sacrifice, it has been observed that the local factors are un-relenting in their approach towards not giving anything away. So, this remains one challenge for the votaries of globalisation which can only be overcome by sustained dialogue and a climb down from the brink by both sides. Another area of “discontent” is the resistance from the people of several states in India against the setting up of industries by steel major Posco in Orissa and the attempt by the Tata group of industries to set up a plant in West Bengal. While these have sometime turned violent, it has to be understood that too much of localisation may not be good for the economy in an increasingly globalised world. What is needed is a well thought out strategy that encompasses the needs of the displaced people and the industrial giants as well. An example of this is the proposal to give jobs in the industries to be set up to the family members of the displaced people. This is one good example of how globalisation can go hand in hand with the forces of localisation. Challenges in localizing products Some of the challenges that transnational firms face when they try to localise are: Unfamiliarity with local market conditions. This has been a feature of many software majors who have found hiring and retaining people a challenge. This has led many of them to tailor their HR policies in such a way that combines global best practices with the needs of the local segments One-size fits all approach. Companies that fail to customise their global brands for local needs and instead rely on the power of the brand globally may also face issues in marketing their products in the host countries. Globalisation and Localisation In the near future, we may see a movement towards localisation as evidenced by some countries moving towards more autonomy for their trade unions and penalising multinational companies for the perceived “damage” that they have done to the local environment. As Stephen Roach points out “it is a question of what degree the world moves towards localisation”14. The effects of such a move towards localisation are felt in the financial and economic markets as there is less free movement of capital and goods. Further the rights of the native workers need to be protected unravelling one of the successes of globalisation namely that of global standards in entry and exit of workers15. One company that has managed to blend these two is Unilever which has made its mark in the markets that it operates without losing its global identity and maintaining the local flavour at the same time. It is such companies who amalgamate the two processes that stand to gain here. Conclusion As we have seen, the companies that adapt themselves to the local markets are the ones that stand to gain most from the globalising process. The tide of globalisation that brings people together may also divide them into smaller groups16. Thus, the promise of globalisation also encourages the despair of localisation. It is the firms that can blend in these challenges that emerge as the winners in the countries and sectors that these issues manifest themselves. There are other sectors where global brands like Nike continue to dominate the local markets as well without need for much localisation. But, in the sectors where such demands are placed on the firms that their innovativeness and adaptability to local conditions matter. In the final analysis, the components of globalisation and localisation should work in tandem and for the ultimate benefit of the consumer as is propagated by laissez-faire economists. Notes Read More