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Structures of Globalization

Globalization refers to the increasing integration and interdependence of economies and societies around the world through cross-border movement of goods, capital, services, technologies and people. It involves three factors - proximity, location, and attitude. Proximity refers to organizations operating closer to customers, competitors and suppliers globally. Location involves integrating operations across international boundaries. Attitude refers to an openness to international business. Globalization can be measured using indices that assess economic, social, and political integration between countries based on flows of trade, capital, information and adoption of international standards. Most highly ranked countries are affluent, developed nations in Europe and North America.

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211 views2 pages

Structures of Globalization

Globalization refers to the increasing integration and interdependence of economies and societies around the world through cross-border movement of goods, capital, services, technologies and people. It involves three factors - proximity, location, and attitude. Proximity refers to organizations operating closer to customers, competitors and suppliers globally. Location involves integrating operations across international boundaries. Attitude refers to an openness to international business. Globalization can be measured using indices that assess economic, social, and political integration between countries based on flows of trade, capital, information and adoption of international standards. Most highly ranked countries are affluent, developed nations in Europe and North America.

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rheena espiritu
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STRUCTURES OF GLOBALIZATION policy responses to trade problems have intensified trade relations between

MODULE 1 and among countries in the world. That is why there is an import-export
promotion effort among the global players.
WHAT GLOBALIZATION MEANS?
of a computer can only be in one of two states: ‘on’ or ‘off’. A bit GLOBALIZATION & COMPETITIVE
(binary digit) represents these two states. There are therefore two which a bit For several decades now, SM and Robinsons have been in business
or; competition and might be worried with the advent of Wal-Mart and Puregold
In the context of economics, it is defined as the recognition by on the competitiveness of their prices.
organizations that business must have a global not local focus. It refers to a new
perspective or attitude about relationships with other people in other nation. It Competitiveness - refers to the relative standing of one competitor against
also refers to the unprecedented scope, shape, number and complexity of other competitors. It is like the game of musical chair where there are finite
business relationship conducted across international boundaries. The numbers of places to sit and some are more desirable than others. It has
phenomenon of globalization according to Stoner et al in 1995 as cited by become a prominent business and government concern in the era of global
Abelos et al in 2006 consists of three interrelated factors namely proximity, business as a contest among nations. Members of the news media routinely talk
location and attitude. about the competitiveness of the United States versus Japan and the United
Proximity Organizations now operate in a much closer proximity than States versus the Pacific Rim. This meaning of competitiveness is part of the
ever before to a greater number and range of customers, competitors, suppliers new attitude of globalization described earlier. It is a direct consequence of the
and government regulators. The increasing technological and managerial unprecedented proximity among nations in the global market place as defined
capabilities of people around the globe are other aspects of proximity. Honda by the International Monetary Fund (IMF).
sent its 60 American specialists to Japan for several years to work with their Competitiveness can refer to a country’s preparedness for future
Japanese counterparts on designs etc. Organizations should treat all clients as competitive interactions. To be competitive in this sense is to have a chance to
“equidistant” from their organizations. win upcoming contests. For example, the Philippine Airlines, tagged as Asia’s
first airline under the management of Lucio Tan had so far refurbished it
Location business class services and retains the world known Mabuhay Class (the first
Location and integration of an organization’s operations across several airline to offer sky bed in long haul flights) needs to stay competitive against the
international boundaries is part of globalization. Nokia cellphones are designed two Asian giants- Singapore Airlines and Cathay Pacific Airways to win for a
and manufactured in Finland but are sold worldwide while Samsung and LG number of industry players who faced higher airfare and maintenance costs.
products are from South Korea. Toyota , Nissan and Honda operate auto
assembly plants in the United States . This new organizational scheme is termed MEASURING GLOBALIZATION
transnational management to describe this growing practice of spreading an There are many alternatives on how to measure globalization per
organization’s operations across many nations. country in the world. The KOF Swiss Economic Institute offers a useful ranking
into three (3) broad categories as follows:
Attitude 1. Economic Globalization measures long distance flow of goods,
It refers to a new open attitude about practising management capital and services as well as information and perception that accompany
internationally. This attitude combines with a curiosity about the world outside market exchanges.
one’s national borders with a willingness to develop the capabilities for 2. Social Globalization measures the spread of ideas, information,
participating in the global economy. Ohmae in 1990 as cited by Abelos et al images and people.
makes this point clear in the simple statement “Nothing is overseas anymore”. 3. Political Globalization measures the diffusion of government policies
Globalization expands and intensifies social relations and consciousness across in terms of the number of embassies and consulates in a country, membership
world-time and world-space. For example, organizations have joined all in international organization, likewise participation of a country in United
together for global warming and save the earth movements. The impact of Nations peace missions and similar advocates.
international trade and investment in one country to another and the foreign
Table 1.1 shows the ranking for several countries. In general, most
of the countries in higher ranking are affluent countries or the so-called
“Global North”. With the exception of Singapore which I situated
geographically in the Global South, the rest are economically well off. The
statistics shows the top 36 nations (among the top 50) in the globalization
index based on the data constructed in 2015. The index is based on three
dimensions or core sets of indicators namely economic, social and political.
The table also reveals that 28 nations included in the top 36 are European
countries.

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