Session VII-a

The Extremes of
Globalization,
One Size Does Not Fit All

1
 The Extremes of Globalization,
One Size Does Not Fit All
… AND POVERTY IS STILL WIDESPREAD …
EAST ASIA

LATIN AMERICA

SOUTH ASIA

SUB-SAHARAN AFRICA

EASTERN EUROPE / CENTRAL ASIA

0 10 20 30 40 50

MERCHANDISE EXPORTS
2000 Page 2
1980
 The Extremes of Globalization
One Size Does Not Fit All
… WHILE FOREIGN INVESTMENT HAS EXPANDED …
EAST ASIA

LATIN AMERICA

SOUTH ASIA

SUB-SAHARAN AFRICA

EASTERN EUROPE / CENTRAL ASIA

0 15 30 45 60

BILLIONS OF DOLLARS FOREGIN DIRECT INVESTMENT

1980 2000 Page 3
 The Extremes of Globalization
One Size Does Not Fit All
… BUT GROWTH HAS BEEN UNEVEN …
EAST ASIA

LATIN AMERICA

SOUTH ASIA

SUB-SAHARAN AFRICA

EASTERN EUROPE / CENTRAL ASIA

-2.5 0 2.5 5.0 7.5

PERCENT PERCENT AVERAGE

ANNUAL GDP GROWTH Page 4
1980-90 1990-2000
 The Extremes of Globalization
One Size Does Not Fit All
EXPORTS HAVE SURGED FOR TWO DECADES …
EAST ASIA

LATIN AMERICA

SOUTH ASIA

SUB-SAHARAN AFRICA

EASTERN EUROPE / CENTRAL ASIA

0 100 200 300 400 500

PERCENT 1990 2000

Page 5
 General Environment:
Key Trends and Events

Demographic
– Aging population

– Rising affluence
– Changes in ethnic composition
– Geographic distribution of population
– Greater disparities in income levels
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 General Environment:
Key Trends and Events

Sociocultural
– More women in the workforce
– Increase in temporary workers / migration
– Greater concern for fitness
– Greater concern for environment
– Delays in family formation

Page 7
 General Environment:
Key Trends and Events

Political/Legal
- Tort reform – rule of law
- Disabilities Acts
- Deregulation of utility and other industries
- Increases in state-mandated minimum
wages
- Taxation at local, state levels
- More grass roots representation
- Election as legitimate way to rule Page 8
 General Environment:
Key Trends and Events
Technological
– Genetic engineering
– Emergence of Internet technology
– Computer Aided Design/Computer-Aided
Manufacturing Systems
– Research in man-made and exotic materials
– Pollution/Global warming
– Miniaturization of computing technologies
– Wireless communications Page 9
 General Environment:
Key Trends and Events

Economic
– Interest rates
– Unemployment
– Consumer Price Index
– Trends in GDP
– Changes in stock market valuations

Page 10
 General Environment:
Key Trends and Events
Global
– Currency Exchange Rates
– Emergence of the Indian and Chinese
Economies
– Trade Agreements among regional blocs,
bilateral (e.g. NAFTA, EU, ASEAN)
– WTO Agreement (leading to elimination of
tariffs)
Page 11
 Emerging Socio-Cultural Issues
in Asia-Pacific
The World Today : Trends
• Globalization
• Ethical Issues
• Workforce Diversity
• Entrepreneurship
• E-Business
• Quality Management
• Workspace Spirituality Page 12
 Emerging Socio-Cultural Issues
in Asia-Pacific

Today’s World
 World is run by companies, not countries
 All factors of production (including labour) are mobile
 Borderless world
 Value chain activities positioned where they are
optimized (cheapest and best)
 Transportation cost / time decreased

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 Emerging Socio-Cultural Issues
in Asia-Pacific
Today’s World
 Opening of economies
 Acceptance of free market economics
 Deregulation, privatization

 Trade theories
 Focus on benefits of trade
 Integration / interdependence of world economy

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 Emerging Socio-Cultural Issues
in Asia-Pacific
Communications Revolution
 Internet
 Satellite
 Cellular telephones
 Laptop computers
 Video conferencing
 Distance learning
 24 hour world-wide news networks Page 15
 Emerging Socio-Cultural Issues
in Asia-Pacific
Advantages of Globalization
 Free trade
 Open capital markets
 International migration
 Optimal allocation of the world’s resources
 Closer understanding between peoples
 Exchange of information

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Problems of Globalization
 Decisions made in other countries impact lives
 Workers threatened as companies shift
production to low-wage economies
 National cultures and identities under threat

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Factors Against a Global Approach

 Customers demand products and services
tailored to local needs
 Global organizations are difficult to manage
 Globalization can undercut unique
competencies of foreign subsidiaries
 Formation of regional trading blocs such as
NAFTA and ASEAN
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 Emerging Socio-Cultural Issues
in Asia-Pacific

Problems People Have With Globalization

 Most people feel threatened by globalization.
 Globalization is too big, too overwhelming.
They prefer not to think about it.
 Treat globalization in the same way they do
death, illness and war. They try not to think
about it.

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Ways to Get People to Think Globally

 Don’t expect other people to act and feel the
same as you do
 Delay judgment until you have had time to look
at an issue from multi-perspectives
 Put yourself in the other person’s shoes

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Tolerance : CAVEAT
 True tolerance comes from understanding
 Tolerance never comes from ignorance
 Unfortunately the notion of belonging to one
country, one religion, one team leads to the
preference for that country, religion and team
and then to the idea that all others are inferior

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Global Understanding
 When you understand, you stop being afraid.
When you stop being afraid, you stop worrying
about protecting yourself.
 When you are out to protect yourself, you
perceive all actions, words, ideas and strangers
as potential threats.

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 Emerging Socio-Cultural Issues
in Asia-Pacific
Today’s World
 Importance of Information
 Economies of networking
 Accuracy and updating of information
 More difficult to sustain competitive advantages

 Rapid technological advances

 New platforms for products and services
 Acceleration of change
 New business models
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 Emerging Socio-Cultural Issues
in Asia-Pacific

Quality Management
 Continual improvement and responding to
customer needs and expectations
 Customer – Anyone who interacts with the
organization’s product or service
 Common belief : Cost Productivity
 But : Quality Cost (due to reject and
repair of product)
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 Emerging Socio-Cultural Issues
in Asia-Pacific
Workspace Spirituality
 Employees want meaningful work which can
contribute to the society
 Strong Sense of Purpose – instead of just
earning money
 Individual Development – not just work, but
also grow and learn
 Toleration of Employee Expression – allow
employees to express their feeling and mood
without fear of being fired Page 25
 Emerging Socio-Cultural Issues
in Asia-Pacific

“New Rules” for Corporate Survival

 Outsourcing
 Innovation
 Cost Leadership
 Focus
 Product Differentiation

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Rules for Today’s Enterprises

 Diverse markets
o Consumer needs, while converging, are
still very local
o Variables: culture, wealth, income
distribution, geography, “history matters”

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Rules for Today’s Enterprises

 Must adapt and be agile
 Understand where the value is for the
consumer
o Are the new services profitable ?

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Rules for Today’s Enterprises

 Human Resource Management
o Employees as most important resource, not
just a cost
o New diverse, intercultural workforce
o Stakeholder view
o Employee / employer bonds stronger

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 Emerging Socio-Cultural Issues
in Asia-Pacific

Rules for Today’s Enterprises

 Building on relationships, philosophy of
partnership. “Their problem is our problem.”
o Customers
… but also
o Suppliers
o Clients
o General Community
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 Emerging Socio-Cultural Issues
in Asia-Pacific

Rules for Today’s Enterprises

 Communication
o Distance no longer a factor
o Across languages
o Across culture

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 Emerging Socio-Cultural Issues
in Asia-Pacific

10 years ahead …...

International Trade Unions growing
 E.g. NAFTA, EU
 Africa ? Asia ? …Inter-union relations ?
 Leads to stability

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 Emerging Socio-Cultural Issues
in Asia-Pacific

10 years ahead …...

Economies Opening
 Interdependance
 Leads to stability

 Wealth distribution
 Will someone get left behind ?? Consequences ?

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 Emerging Socio-Cultural Issues
in Asia-Pacific

10 years ahead …...

 Developing world vis-à-vis developed world …
 Living standards
 Cultures, expectations
 Developing countries may overtake the modern
developed countries
 Increased cultural migration / mixing

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 Emerging Socio-Cultural Issues
in Asia-Pacific

The years ahead …...

 China’s Socialist experiment …
 Great importance for other countries; India, Russia,
Africa, South America

 Arab countries
 Wealth extracting exports …
 Consequences …
 Iraq experiment; where will it lead ?
•Terrorism Page 35
 Emerging Socio-Cultural Issues
in Asia-Pacific

The years ahead …...

 General depletion of scarce resources
 Breakdown of world environmental treaties ?
Enforcement ?
 Regulation difficulities (internationally)

 Synthetic (GM) substitution

 Raw materials no longer geographically based

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 Emerging Socio-Cultural Issues
in Asia-Pacific

The years ahead …...

 Continual connection to Internet (information
network)
 Instant data flow- no need for storage devices
 PC devices simplified
•Must solve screen problem
 Car fuel- Electric, Hydrogen Cells …
 Suppliers ? Not georgraphically dependent

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 Emerging Socio-Cultural Issues
in Asia-Pacific

The years ahead …...

 Convergence of International Laws
 Out of necessity- discrepancies cause transaction
costs- HUGE DISINCENTIVE

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