Globalization Such a Discussion Revolving

Globalization

Such a discussion revolving around the globalization process in all its ensemble is difficult to approach, not necessarily only because of the complexity of the subject, but because it is the type of subject that has been tackled by theoreticians all over the world over the last decade and it is difficult to actually attain a perspective that has not already been achieved.

What is the globalization process in fact? From an economic perspective, given the fact that globalization was triggered by economic considerations, the globalization process can be defined as "the process of corporations moving their money, factories and products around the planet at ever more rapid rates of speed in search of cheaper labour and raw materials and governments willing to ignore or abandon consumer, labour and environmental protection laws." Certainly, this type of definition relies almost entirely on the economic fundamentals. From this perspective, I don't believe there is much argument going on when referring to globalization and identifying it as a process where corporations in the world are looking for cheaper resources in an ever more challenging global economic environment, in which competitiveness and profitability go hand in hand.

On the other hand, globalization was also sustained and supported by the constant liberalization trend in the last decades, starting with regional trade liberalization (in the 50s and 60s), subsequently with global trade liberalization following the Tokyo and Uruguay WTO rounds of negotiation and continuing with the elimination of different capital and labour barriers. The result is an economic global environment where access to capital and labour is much easier.

However, the economic globalization is barely the tip of the iceberg. There are numerous other considerations that need to be discussed in terms of social, political or cultural transformations. Economic globalization is always likely to brig in contact different cultures. Let us consider the simple situation where a Western company outsources part of its activities in an Asian country that boasts cheaper labour and administrative costs. The interactions between the Western economic entity and the local receiving countries are numerous.

First of all, we need to refer to the relationship between the country's government and the Western economic entity. Initially, the national government is interested in offering beneficial, preferential conditions that will encourage the foreign company to invest on the local market. This includes fiscal incentives, a clear legislative framework etc. The relationship between the company and the national government is initially one of convergence and cooperation.

On the other hand, we see numerous situations where the national government and the investing entity arrive at a conflicting point. One of these situations can be related to periods of social unrest, generally caused by a situation in which, on one hand the company needs to achieve lower costs and, on the other hand, it also needs to pay attention to its workforce, to conflict situations that might arise. More concretely, the national employees will attempt to go on strike in order to support their demands, with the tacit or open support of the government, who will adopt different pressure measures in order to subdue the company into giving in to the employees' demands.

There are other situations in which the company and the national government may arrive to a conflicting rather than a convergent position. The national government, in its role as a protector of the people's rights, needs to take measures in such cases as pollution or environmental devastation and will sanction the company in such situations. Additionally, conflicts may arrive because the economic entity needs to position itself inside a certain framework of rules and regulations that the government and the national legislative body has laid out and this can sometimes be on a different approach than the company's strategic objectives. As we can see, the relationship between an investing body and the national government is often quite complex in a global environment, ranging in its behaviours from cooperation and convergence to conflicting situations.

The contact and relationship between a global economic actor in search of cheaper resources and the social group of people labelled as employees is often the most complex in the entire globalization process. This ranges from the company's national managers to all the other employees. The reason for this is quite simple and can be explained with the term "cultural differences" which helps us describe a range of issues on which the approach of national individual employees is different than that of the corporatist counterparts that invest in the country.

The first important cultural difference that comes to mind is, obviously, language. The global environment, through the elimination of many of the previous barriers, is an environment of intense communication between different entities. Technology, with the emergence of the Internet, among other things, has also helped spur a communication incentive never seen before in history. However, language is still an important barrier. There are probably around 1.5 billion English speakers in the world and certainly around 1.2 billion Chinese speakers, but they often don't overlap.

It is the same situation in the case of a foreign company investing in another country in search of cheaper resources: language is often a barrier in communication and a barrier in passing top-down a clear message on the company's intentions, strategic objectives and vision, plans for the future in terms of development and employee relation etc. Language, as a component of cultural differences, through its important role as a communication channel, can be a source of frustration and conflict among global acting entities.

Nevertheless, cultural differences can go a much longer way than cultural differences and can often be related to the individuals' approach towards work, their perspective on life, their perception of time etc. We can agree on the fact, for example, that the Italians and Spanish (and in general all the Latin people) have a very loose approach towards time. It is difficult to perceive a German or Japanese entity, for example, outsourcing in Latin America. It is a relationship that can't properly function exactly because the two cultures have different approaches and perceptions on things.

Conflict situations related to cultural differences can arrive not only between the foreign managerial team and the local employees, but also in the case of communication between same level individuals. We can consider the same situation as previously described with an Italian company willing to commit to a contractual relationship with a Japanese enterprise. Conflict situations can arrive because of different negotiation techniques, different ways of approaching issues etc.

Finally, globalization has helped bring in contact entire cultures and concepts and as we could see especially in the last decades, this often brought about conflict rather than convergence situations. The Arab vs. Western conflict can best be mentioned here. This is no longer a conflict over resources or economic competition, although these can be mentioned as secondary causes. This is a conflict over deeper issues, issues such as perceptions and philosophies, fundamental beliefs and faith. It is a conflict that is thriving in a global context and it is perhaps this very global context that has encouraged and partially fuelled its development.