Globalization and Business

Dr. Daniel Sullivan

Fall 2009
Class Date Synopsis

Class 1

 A key theme that we developed during class was the issue that international business is concerned with cross national commercial transactions in the effort to improve the efficiency of those with an eye toward improving one's competitive position in one's particular industry. In contrast, globalization refers to the network of relationships that span individuals, companies, institutions, and countries that effectively move us all toward,  for lack of a better expression, a one world order. Simply put,  international business is about increasing trade and financial linkages across countries while simultaneously respecting intrinsic economic, political, and cultural points of national differentiation. In contrast, globalization is about the issue of integrating activity worldwide, a process that relies upon dynamics of denationalization, whereas points of national differentiation are subjected to relentless standardization pressures in the quest to optimize worldwide efficiency.

In addition, we amplified these perspectives through the global shift concepts expressed in the YouTube clip--Did You Know. This clip, the latest in a increasingly popular series of profiles of change in the world, highlights the demographic and technological revolutions currently unfolding and the resulting implications to knowledge creation, social relations, career design, and standards of excellence.

 Regarding how to encapsulate what happened in class today, perhaps the best way is to emphasize the three readings that we kind of drilled the most--namely the world is flat, 3 billion new capitalists, and as goes GM, so goes the USA. One way to conceptualize this set of readings is simply the good, bad, and the ugly. The good refers to the world is flat and the opportunities that transformation creates for individuals in resetting their careers and rethinking their choices.

The 3 billion new capitalists symbolizes the bad part--no longer can we simply presume that we operate in a geographic and cognitive vacuum that is impervious to the actions and ambitions of others on the periphery. More specifically, now we must also compete with 3 billion other folks who are, on average, much more inclined to work far more diligently, for far less compensation, and ultimately with far more ambition given their intent to not only prosper but in many cases the absolutely compelling urgency to survive.

The ugly part is the seemingly traitorous notion that the United States could go the way of General Motors, and indeed go bankrupt. A ludicrous assumption to even brook a few years ago, the question of the solvency of the United States, given recent trends in debt, performance, and competitiveness, it is no longer merely for  debate among the lunatic fringe. And, if the US does find itself in a solvency crisis, all bets are off and the issue of globalization quickly resorts to the issue of localization aided and abetted by trade wars such as that which we are currently seeing in the initial skirmishes between the United States and China. If in fact, those sorts of battles escalate, coupled with harsh implications for the intricate sustainability of cross national dependency and financial flows, then  globalization probably would come to grinding halt and localization pressures with quickly grow in intensity--think of the process of adding more and more sand to a high performance engine.

Class 2

Class began by noting the implication of the cornucopia of choices construct with connection to the issue of global outlook and the interpretation of the world either representing a barren landscape or a market marked with opportunities.  Translating these thoughts into more practical device, we noted the implication that one can begin preparing for this transformation, and quite critically breaking free of the herd mentality,  Through the rather straightforward task of seeking different information.

A key issue at play are simply what these three perspectives, the good, the bad, and the ugly, within the interactive context of international business versus globalization and it's moderating dynamic of global shift, holds for people's standards of leadership excellence and conception of career design.

 As we had done in our earlier class, we rely on an external benchmark of the standards of executive leadership--specifically those put forth by the five chief executive officers profiled in the Harvard Business Review article. Against their sense of the dynamic of change in their production going forward, we asked which if any provides a way to frame our interpretation of the implications of our earlier class discussions to practical as well as philosophically meaningful perspectives. We began by evaluating the implication of three dimensions--the issue of inflection points, the precedent of leadership legacies, and questioning the centricity of alternative perspectives. This interpretation anchor are then ensuing consideration of the European and US paradigms, of executive leadership standards, respectively circa 1900 and the latter half of the 20th century.

Perhaps the critical dimension to keep in mind here is the interaction created by the nature of the global environment and implications to how companies then design operations in ultimately staff those people of certain qualifications. More precisely, we note that the nature of travel and communication, extent of trade and investment regulations and the corresponding transnational institutional context essentially configures the game board for international business activity to take place. Companies, acting as market takers, then decide how they intend to innovate with the ambition of creating value, map out their strategic logic of operations, and design their organization by which they then will attempt to achieve their objectives. And again as mentioned above, once they complete the steps the task of staff in operations with people of presumably the most relevant qualifications becomes the task to complete.

In the case of the European scenario, the standards of ethical orientation  (anchored within a familial context where possible ) cultural sensitivity, foreign language competency, foreign market living experience, people management skills, and a generalized entrepreneurial predisposition were seen as critical to success. In the case of the American scenario, the situation flip-flops, whereby issues of cultural sensitivity and foreign language competency became subordinate to generic presumably universal management methods largely anchored in a quantitative construct of analysis and implementation.

 

Class 3

The latest installment of our profile of the evolution of executive leadership standards within the globalization drama direct our attention to the implication of the migration of value, activity, and energy from the west to the east--specifically the countries of China and India. We essentially try to capture in short order, the dynamic of management philosophy and practice and play in China and India (subject of course to the intrinsic limitations one runs into and the effort to ostensibly interpret the characteristics and conditions of other countries with rich, multifaceted cultures, while inevitably locked into the mindset of that which he or she has been socialized). Nevertheless, the implication of the current cognitive stylings and conceptual practices at play in China come directly to play within the profile of the educational curriculum at the Chinese European international business school (CEIBS). This university is the leading business school in Asia, and one of the top five or so in the world from most observers point of view. In reviewing the nature of their curriculum, within the larger context of the cultural orientation and cognitive standards of China, it becomes apparent that the Chinese emphasize different dimensions. In their conception of management and executive leadership than those which we hold forth in the United States. Similarly, the analogous line of inquiry, with respect to India, suggests also that the management education drama that unfolds in India is distinct from that which plays in America.

Actually, the question arises--so what? Essentially, at this point in the course, one should have a sensitivity to the fact that what we do in America no longer qualifies as both a necessary and sufficient basis for executive leadership. Rather, the globalization of markets has resulted in a shift of epic proportions, a shift that is unfolding as we speak, and a shift that is reorienting the standards of evaluation to expand beyond simply the American- centric perspective to those that also incorporate elements from a China centric and India centric, to say nothing of a Eurocentric perspective.

Going forward, this information also just that students are well a bias to anchor their interpretation of what they aspire to achieve and the ambitions they reject based on a fairly informed reading of what they're immediate geographic cohorts are up to as well as those who are geographically far far away, but cybernetically sitting beside them.　

Review of the Chinese, Indian, and US perspectives on the standards of executive leadership put into play the issue of how one best prepares for a career in business in a flat, globalizing world. In order to convey and communicate the idea that more precisely, we profile the application of the low cost labor rates around the world, coupled with the one laptop per Child program and its suggestion of eventually bringing into the world's central nervous system 2 billion additional people. Essentially, over the next generation, 2 billion more people increasingly will have at their fingertips access to the entire repository of knowledge stored on the Internet. So just for dramatization, villagers in long neglected and faraway places, who may have had periodic access to outdated newspapers, now have access to the latest breaking news along with the cumulative knowledge of the human race. The implications of this transformation are steadily but inexorably unfolding--key among them at this point is the addition of billions of more people, following the wave of the first billions, who are entering the world of globalization, increasingly wired into an all-encompassing boundaryless matrix.

 From a different perspective, we then profiled the implication of the inexorably advancing improvements in computing power. Estimates are by the year 2013 we will see a computer that exceeds the computation capability of the human brain and by 2049 a $1000 computer will exceed the computational capabilities of the entire human species. On a related front, we discussed the expanding explosion of information and the remarkable challenge of trying to maintain pace with that explosion-- sort of the proverbial challenge of drinking from a fire hose running at full volume. So point-blank, besides the intrinsically difficult challenge of being a smart person, we will have it in our lifetime the prospect that matter how smart one is a computer of your shelf for a few thousand dollars or so, will be far smarter than you could ever hope to be. Presumably there will be some sort of equalizer, and as my suggestion of the WiFi Google chip implants suggest, these equalizers will require some sacrifice of your intrinsic humanity and the acceptance of some cybernetic/cyborg capacity.

 And as a point of context, recall that previous paradigms of decorative leadership, most notably the European, the Japanese, and the American, were all correlated with significant change in the configuration of the game board and the corresponding opportunities for and constraints on coordination. So therefore, the expanding game board, as represented by the growing billions of people accessing the mechanics of globalization coupled with the increasing potential for alternative and powerful means of coordination, given the consequence of those sorts of changes to earlier management paradigms, supports the supposition that one can expect the current management paradigms evolve in distinctly different patterns then historically witnessed.

The implication of these two trends--the advent of a global village populated by brighter people willing to work for far less than historical norms coupled with the increasing computational power of the computer matrix shape our understanding of the historic standards of either working harder or working smarter in order to power a management career. In consequence, we appealed to the suggestions of the executives of General Electric and Schering-Plough that the standards of executive leadership in a global market will emphasize the notion of a network. This notion therefore then directs our attention to issues of the Internet as a design metaphor and the principles of chaos as a theoretical structure of interpretation in how one may develop in promote a career in international business. Coupled together these ideas shift our understanding of the challenge of the Chinese--symbolized by the notion of working harder--and the challenge of the Indians--symbolized by the notion of working smarter--with the frontier for American excellence--symbolized by the notion of working differently/thinking differently.

Class 4

       

This part of the course relies on the process of platonic dialectics. Namely the course syllabus states that scholars from Plato to Hegel reason that the evolution of ideas occurs through a dialectical process: a thesis gives rise to its opposite, the antithesis, and, as a result of the ensuing conflict, a third view, the synthesis, arises. In theory, synthesis occurs at a higher level of truth than the first two views, thereby inspiring insight and enabling innovation. The instrumentality of the dialectic process is that of an ‘opposite.’ If absent, an idea not only dominates the ontology of discussion, it predominates to the exclusion of its opposite. We use this process to investigate the features of globalization and business environments outlined in Chapters 1 through 5.

             Specifically, Chapter 1 put this process into play with the issue of globalization versus anti-globalization, a rather straightforward contrast but one which has powerfully polarizing aspects. Chapter 2 elaborates the issue of the integration of cultures into a universal platform that spans the world versus the continuing endurance and perseverance of national cultures distinguished by national boundaries that define, legitimate, and sustain differences. Chapter 3 turns our attention to two related issues, namely the issue of democracy versus totalitarianism and on the legal side of the equation issue the rule of law vs. the rule of man. Chapter 4 moves us forward to the issues of capitalism versus communism, albeit the latter has a somewhat misleading connotation given its larger socio political agenda; hence, let me turn to Chapter 4 we emphasize, emphasize the dialectic of state intervention versus free markets. Chapter 5 completes a circuit for us in portrays the issue of social responsibility and matters of sustainability within the context good versus evil in which people aspire to behave honorably and nobly or else people fall prey to the temptation to exploit and pillage.

             Within the context of globalization as outlined in Chapter 1, class discussion emphasizes the notion that globalization signifies the standardization of activity across the world in the process of Globaity in which we compete with everyone for everything from everywhere (or put more out directly, CE3.To that effect, we can conceptualize processes of globalization in the realm of technology, sociology, institutional, economic, political environments inexorably moving the world toward a common platform of interaction and engagement. If in fact, this program follows as it has thus far in G3, we can anticipate steadily less variability among nations in terms of how business is conceptualized and practiced.

             We then also profiled that the march of globalization is not inevitable. In general, public opinion presently sees the processes of globalization as creating more problems than solving problems in the world today. Within this context, there are a variety of forces that stand in the way of globalization, ranging from matters of income inequality, environmental degradation due to unfettered economic growth, matters of national sovereignty and the threat of stateless organizations, the matter of human rights and subjugation of human rights to economic processes in a globalized world, and to complete the circuit, the puzzling relationship between globalization and terrorism.

             Subsequently, we profiled the issue culture from dialectic of continued presumption that the nation delineates the distinction of culture from country to country. That is the focus on the nation underscores the point that culture helps to define, legitimate and sustain boundaries between groups of people--boundaries can include language, religion, orientation, etc. etc. The matter of formal boundaries was then linked to the philosophy of interpretation expressed in terms of the notion "Cognito, ergo sum," courtesy of Renée Descartes, and it's rather interesting relationship to the discussion in class regarding the issue of "socialized destiny." The issue of socialized destiny implies that the values, attitudes, outlooks, and orientations that one is raised from birth to accept and to endorse shape than individual's behavior remainder of their life. Agents of socialization include family members, relatives, friends and so forth who directly as well as indirectly socialize one's cultural identity. So, in the context of the nation state as the point of differentiation among cultural identities and imagery, we have a process of socialized destiny, and it's rather evocative expression in the notion of I think therefore I am--with the presumption that how one thinks has been shaped and formed early on in one's life and that process of shaping information carries forth the remainder of one's life.

             We threw into consideration at this point the issue of globalization phase 3.0. Namely, the transformation of our assessment and understanding of the unit of analysis of globalization from a country to company to individual over the past 500 years begs the issue of whether in the context of globalization phase 3.0, a context defined by the individual, can one reasonably expect the nation as the basis of delineation to maintain its status as framework of culture. We held forth the antithesis notion that, no it cannot. Rather, the forces that power G3 also increasingly challenge the conception of culture as a national phenomenon.

Class 5

  We threw into consideration at this point the issue of globalization phase 3.0. Namely, the transformation of our assessment and understanding of the unit of analysis of globalization from a country to company to be individual the past 500 years begs the issue of whether in the context of globalization phase 3.0, a context defined by the individual, can one reasonably expect the nation as the basis of delineation to maintain its status as framework of culture. We held forth the presumption that, no it cannot. Rather, the forces that power G3 also increasingly challenge the conception of culture as a national phenomenon. In a G3 world, we shift from a situation of socialized destiny to one of cognitive evolution.

With all that said, we then profiled the forces that are powering the point of global convergence of cultural ideas and imagery, emphasizing the declining capacity of fast disappearing languages and weakening religious affiliations to continually define, legitimate, and sustain cultural boundaries. More specifically, the fact that the number of languages is consistently dropping as well as the fact that more and more people are increasingly speaking English across the world helps to destabilize traditional cultural boundaries. Similar trends concerning the religion, within the context of spirituality versus secularization, shows increasing societal pressure that destabilizes religious affiliation, and by extension, destabilizes the notions of distinct cultural boundaries. Similar effects with respect to the role the media, migration patterns, and the process of information flow across countries accentuates and amplifies these trends. Class then turned to engage the antithesis, as specified in the opening Lebanese proverb for chapter 2, namely "to change customs is a difficult thing." Within that frame that we identified the conditions and actually slow if not stall stop the process of cultural integration being powered by globalization, emphasizing the issue of the iceberg perspective of culture, the work attitudes and leadership behaviors that exist across country clusters, as well as related work attitudes regarding the issue of risk (recall the discussion of the games of go, chess, and backgammon) and finally, the immense variation in the world when the global population is organized as 100 person village in terms of prevailing social, economic, gender, religious, and demographic criteria.

Class 6

 Together these and related issues within the context of larger societal norms suggest that national culture is unwilling and unlikely to roll over and fade away gracefully and quickly.  To complete the circuit we evaluated the primary agents of change, noting the fact that the Internet is the single most powerful force for increasing democratization, economics, and education the world has ever seen. Moreover, within that concept, the emergence of the Internet as the force to create new worlds of social collectivities that exist beyond the anachronistic distinction offered by national boundaries would seem to indicate that going forward. More specifically, as excerpted from the 2009 state of the future, Individuals and groups can self organize around common ideals via the Internet, independent of conventional institutional controls, and regardless of nationality or languages this unparalleled social power is reinventing citizens grow in the political process and change institutions, policymaking and governance. Implications of this concept to cultural identification processes, within the context of a globalization to versus globalization three dynamic are unmistakable. Presently, given current economic and political circumstances, Culture in a G2 world will likely, barring any sustained stop in globalization, fade to the forces that anchor and power the conception of culture in a G3 world.

The topic of today's discussion was anchored in the dialectic between collectivism and individualism and its implications to the proverb that keynotes Chapter 3--namely, every road has two directions. A quick detour to a brief YouTube clip on the issues of collectivism and individualism put into the frame the notion that even though there are a host of names to label every which political ideology as one sees, ultimately they all boil down to a simple pointer perspective--either one champion the rights of the individual over that of the groups or one champions the rights of the group over that of the individual. In the case of the former, individualism flourishes, which therefore support calls and claims on personal freedoms. In the case of the latter, needs and goals of the group supersede any of those of the individual and freedom is simply a vehicle to establish the harmonious relationships within the context of the group.

Against that backdrop, we profiled the issue of freedom in the world, as courtesy of the freedomHouse.org. the most recent edition in its long-running annual snapshots of freedom around the world identifies the fact that in 2009 freedom prevails across most of the world, although there are large source of the globe that are either partly free or not free at all. In its own right, that particular panorama is not terribly terrifying, given the obvious implication that there is freedom in all corners of the globe. But, upon expanding that snapshot into a longitudinal profile, data reported in the textbook and covered in class shows that the world seems to be on the verge of a freedom stagnation with a rising chance of deterioration into a backlash against freedom and democracy. As such, managers who just five years ago questioned question how strong freedom and democracy would sweep across the world increasingly now must ask will democracy continued to stagnate or, more discouragingly, and democracy actually falters and falls. These are not mere points of academic debate. Rather than the conduct of business in both a company. Individual level, in a democracy is far different than that conducted in a authoritarian/totalitarian state. Even in events where a country does not necessarily manifest the traditional hallmarks of an authoritarian state, as identified in the text, it still can bring to bear a state that is ideologically interventionist in in the conduct inactivity of companies and managers. As such, and as highlighted in the looking to the future insert in Chapter 3, managers must analyze, project, and ultimately guesstimate the likely trend toward the direction of individualism versus the direction of the road heading toward collectivism in gauging whether the path will head toward democracy or whether the path will head toward totalitarianism. Upon making that decision, managers then must adjust operations, if not radically reset them in order to preserve property rights, investment freedoms, and strategic flexibilities.

To add a bit of historical perspective to our interpretation, we referenced the book's discussion of the long waves of democracy that have run through the course of the 20th century; this profile identifies three long waves of democracy that have run over the 20th century, with each wave leading to increasing expansion of the number of democracies around the world, followed by some sort of punctuation event, that then led to a decline in democracies and a corresponding U-turn on the proverbial road and the resulting resurgence in authoritarian and totalitarian systems. The current wave, identified as wave three, began in the early 1980s and had run strong until roughly 2000 or so and since then has been flatlining and, most worrisomely, then over the past three years seem to turn south. The difficulty of this profile is the simple fact that if the cyclicality structure of the past hundred years of history truly is playing out as we speak, then the world is likely headed toward a 15 to 25 year period of totalitarian governments replacing locker cities and authoritarian notions supplanting democratic ideals.

 

Elaborating the intellectual themes presented in the preceding discussion of collectivism and individualism, we put in to play the framework of the American Century versus the Chinese Century. While admittedly a convenient classification schema, by profiling the respective models that prevail in both the American and Chinese Century, we can come to better understanding about the likely inflection points and Kurt and will likely anchor life going forward for the business world.

Regarding the American model, we identified the presumption that over the past 75 years or so, essentially, the period that has run since the conclusion of World War II until essentially, the collapse of Wall Street last fall, the issue of globalization is euphemistically a process of Americanization in which we by virtue of our belief in the primacy of free markets and clinical freedom spread the notion of capitalism and liberal democracy throughout the world. Expediting this process was the presumption that culture should be US/secularization centric, democracy should and must triumph, the rule of law should prevail, and growth is a good and positive force for the improvement of mankind. These ideas, which largely qualified as the projection of the soft power of the American dream, were largely responsible for powering the rise of American-style democracies throughout the world over the past 30 years or so. The past few years have seen a challenge to the vitality of this perspective, due to political, cultural, and economic dislocations that have tarnished the image of the intrinsic beauty of these ideals.

As the tarnish has shown, people have increaingly spotlighted the attraction of the so-called model of the Chinese Century, a model that presumes that culture should be collectivized secularization, a system of totalitarian/sovereign democracy regulates society, the rule of man is the default principal for adjudicating grievances in establishing rights, and growth is an absolute requirement for system stability and party legitimacy.

Amplifying these thoughts were in a brief profile of a comparison of the emergent bipolar structure of the world political process-- once again we are back to a road that has travels in two directions, namely the Washington consensus, versus the corresponding and competing Beijing consensus. Class pointed out that the Washington consensus is ideologically interventionist, aiming to socially engineer a transformation of states throughout the world to mimic the hallmarks of a progressive Western-style liberal democracy built upon a presumption of markets which are free are markets that are effective. Beijing consensus, in contrast is ideologically agnostic, caring not what people wish to do within the context of their particular country as long as they respect the right for China to trade for materials and resources. In this context, the dynamic of change for China is one that is geared toward achieving a state of harmonious stability that legitimates by default, the practices that prevail in any particular country. In contrast, the US style of ideologically interventionism presumes that the world should aspire for state of peace, an outcome that is predicated upon the achievement of democracy, itself predicated upon the development of property rights that are called upon to protect increasing wealth of citizens who have relied upon processes of free-market growth to generate income.

So in a nutshell, today's discussion tried to highlight the characteristics and dynamic of the so-called American and Chinese Century. Perhaps one of the key takeaways from today's discussion is the fact that in the United States, we hold forth that democracy should triumph as a precursor to establish a worldwide state of peace. In contrast, the Chinese have given evidence that they have an alternative point of interpretation, believing that secularization is the basis for a benign totalitarian democracy that has as its fundamental goal and ideal a state of harmonious stability.

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