Chapter 9Globalization and Culture

Team 8- JapanJacob Henson, Nils Floren, Aaron Whitmire,

Brandon Allen, Cory Rogers, Sergio Torres, Jose Contreras, Kelli Philp, Thomas Freeland, Melissa Giussani

Paradox 9.1Can global economic integration occur

without political and cultural integration?

John NaisbittJohn Naisbitt believes

Most ethnic groups want the positive aspects of economic integrationEx. lower tariffs and moving capital across borders

Do not want to politically and culturally integrate

John NaisbittNaisbitt predicted that there will be 1,000

small nations divided by religion, language, and ethnic backgroundsSince the Cold War ended there have been

over 20 new countries in EuropeAndorra, an ethnically distinct region

between Spain and France, became its own nation

Yugoslavia became four new nations after the Balkan Wars

Economic IntegrationEconomic integration can happen without

political and cultural integrationWorld Trade Organization (WTO)European Union (EU) includes 27 nationsNorth American Free Trade Association

(NAFTA)

Economic Integration Issues with economic integration

Not all countries conform to currencyOne negative vote can stall action in the EUMexico, Canada, and the USA fight with each

other making trading tenseDoha trade discussions have been cancelled

Economic Integration Lower overall costs with economic

relationshipsIncreased contact between different groups

lead to integrating politically and culturallyProcess may not be smooth

Full integration of politics and culture is unlikely to occur

Paradox 9.2: Is Globalization a myth?

Globalization: the process by which regional economies, societies, and cultures have become integrated through a global network of political ideas through communication, transportation, and trade

Segregated Some Areas that have notbeen touched by Globalization:-Some areas in Latin America,- Africa- Asia

Globalization: Connecting the World

Since 1992 trades has more than doubled between developing nations

Evolution of technology : Internet and Communications

Paradox 9.3 Is Globalization an old or new

phenomenon?Past View

RomeSilk Road1870-1914

Present ViewToday

Business schoolsTechnology’s Impact

Four critical elements of globalization

Corporations capital base

Corporate mind-set

Supply chain

Market presence

Supply ChainWal-Mart

Huge StoresReverse Saturation ModelOwning their own TrucksDistribution Centers delivering to Stores

Barry Lynn’s ViewGlobal corporations

Global Financial SystemsBond market crisis

East Asian Financial crisis

Russia banking system

Thomas FriedmanWrote, “World is Flat.”

Globalization is because of:InternetVideo ConferencingOutsourcing

Friedman’s CritiquesMany believe it is a “Spiky World.”

Highest Peak

Middle Peak

Lowest Peak

Different Types of Globalization

Globalization 1.0 (1492-1800)Columbus, Steam power

Globalization 2.0 (1800-2000)Multinational corporation

Globalization 3.0 (2000-Present)Linking individuals globally

In ConclusionWorld is becoming more globalized, but in a

different manner than in the previous eras.Significant Overlap in previous eras.Globalization in the past pales in

comparison to what is happening today, especially with the rise of China, India, other developing nations, and market economy.

Paradox 9.4Is there a reasonable probability that a

global financial collapse will occur and undermine globalization?

Financial CollapseKnowledgeable analysts have expressed

fear of another major financial collapse in the future.

The International Monetary Fund has identified 64 banking crises between 1970 and 1999 capable of causing a global meltdown.

Financial Collapse Undermining Globalization

Experiences since 1990 suggest there is a reasonable probability a global financial collapse could occur that would undermine globalization.

Companies who take part in globalization need to secure capital base and take other necessary precautionary actions.

Paradox 9.5

Does globalization encourage nationalism?

Different ExamplesWuhan University in China-2004

MBA Students

Czech Republic Banks

Nationalism“Also almost all citizens across the world

identify primarily with their ethnic and national cultures and globalization threatens such identification.” Bhagwati 2004

Study Abroad Experience

“At a minimum, it is critical that nationalism be contained to some extent if globalization is to succeed”

Paradox 9.6Are nations becoming simultaneously more

and less powerful because of globalization?

Nation’s Losing PowerJessica Matthews, “Power shift”

Increase in international trade and communication systems

Example: United States approving GE’s offer to purchase Whirlpool when the EU did not approve the offer

MNEs posses substantial resourcesModularized factories

On the other side…China vs. GoogleFrance vs. YahooLaw of Sea

Paradox 9.7Can one nation dominate the global

economy and political system?

The belief of Conquering the world is nothing new…

-Julius Caesar -Alexander The Great -Napoleon

-Hitler-British

Who do people believe will be the next nation to attempt world domination?

-China and or India-The Asian Century

Some of the factors leading to a nation’s desire to conquer other regions?

Scarce resources -Potable water

-Arable land

What would happen if there was another attempt by one nation to rule the world?

Paradox 9.8• Is Globalization doomed?

“Foreign Affairs”by Niall Ferguson

Five FactorsImperial overstretch of national governmentsGreat power rivalryUnstable alliance systemPresence of rogue regime sponsoring

terrorismRise of revolutionary terrorist organizations

hostile to capitalism

Ferguson’s ComparisonGreat Britain was major power, now it’s the

United StatesImports > ExportsRivalry with China and other NationsWar with Iraq.Allies doubt U.S. leadership due to national

debt increase.Muslim Extremism similar to Bolshevism in

Russia.

Sesit’s ViewSimilarities

Low inflationRising commodity pricesNew regional powers emergingState-sponsored terrorismGrowing power rivalryFinancially overstretched dominant powers.

DifferencesDemocracyDecline in wars in current era

Gupta and Govindarajan Downplay similarities between eras.

Globalization is inevitable, although it can be derailed by nuclear warfare/epidemics.

In ConclusionWorld changes suddenly and future is

uncertain.

There are many similarities between eras and there is a call for increased attention to macro-level influences.

Paradox 9.9Does Globalization increase prosperity and

inequality simultaneously?

Global ProsperityReduction in povertyWealth per capita

Is there a connection to inequality?

InequalitiesCEO’s vs. Corporate workerAlmost all OECD countries have

experiences growing inequalitiesProof?What are the affects?

Max Weber

Paradox 9.10Who are the winners and losers in a

globalizing world?

Not Everyone WinsThe winners of globalization are clearWho loses?

Farmers in China forced off public landsWhite and Blue collar with outsourcingOverall Economy

• Should assistance be provided to losers?

Paradox 9.11Is increased education the antidote for

outsourcing?

Engineering and Business degreesBlue-collar vs. White-collar workers

Gosselin 2006: College graduate salaries decreased 5% 2000-2004

Outsourcing will continue

Alan Blinder 2006: Personal Service Jobs are harder to outsource

Outsourcing can be prevented in some fields but not in others

The end