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Globalization: a sweet word gone bitter?
With the recent commotion around
offshore outsourcing the word globalization has landed in a black book for
many citizens of industrialized countries. This is particularly unfortunate,
because the very trend of going global was initiated by these same
industrialized countries at a time when they were in search for alternative
markets for their massive productions of goods.
Here’s the perspective that
many fail to acknowledge: offshore outsourcing is definitely nothing new.
It’s just the same ligament on the body called globalization, but now seen
from the other side. A recent Business Week article explained it
outstandingly by stating that, in the past, the same corporations that are
now outsourcing jobs were outsourcing products. Basically, these companies
were then offshoring the "demand" for American
goods and services to
countries such as India, while they are now simply making the next, logical
step, which is “continuing their strategy of profit maximization by
outsourcing the supply of their products.” Although it is therefore
understandable that the actuality of globalization is finally hitting home
for a large group of U.S. workers who, up till recently, had no clue where
the geographical locations of their just-lost jobs were, it remains
regrettable that this had to be the way for innocent
people to get confronted
with reality.
Another interesting fact is emphasized by Forth in his
article “the road to Bangalore” (FDM), in which he points out that it is
remarkable how little uproar there was when blue-collar jobs were massively
exported and the little man was left penniless, but that, now it has been
demonstrated that executive positions are not abstained from this
world-encompassing development, the inconvenience is vigorously being
vocalized.
To shine some light on the essence of this issue for all
citizens of the world, it might be useful to evaluate some recent comments
from reputable news sources on globalization, and thereby list a few
important facts:
1. Globalization is only bad for people who refuse
to realize that they live on the globe, and that there is more to the world
than their own country or workplace. The lesson to be learned from the recent
offshore scares is that it is the highest time for every citizen of the world
to enlarge his or her horizon by using every opportunity to familiarize him-
or herself with other parts of the world. In a May, 2004 article published
in Alexandria, Wright, a U.S. citizen, explains his eye opening
experience while studying in Argentina for six months. He emphasizes the
emergence of his current broadminded perspective through daily exchange of
perceptions and ideas with locals. He then calls for American youngsters to
look for ways to do the same: getting over their fear of leaving their
comfort zone and their insecurity to face adventure, and finding
opportunities to work and study abroad for a while in order to get a better
understanding of what’
s out there and how to make it useful.
2.
Globalization is crucial for companies, but they should realize that there
are certain things to examine before deciding their next geographical
location of business: the transparency of the local market is one of the main
things World Trade mentions in its June, 2004 edition. Political stability is
another point to ponder. However, this point should be considered along with
other issues. China, for instance, is economically far less stable than
India, but for some types of business China may be a better target point.
Conclusion: there is a multiplicity of factors to be
evaluated. Not just
one.
3. Maintaining a global mindset is equal to maintaining a
futuristic mindset. Globalization will not be reversed, so protectionism is
silly and, on the long run, distressing for a country’s economy. Drezner
warns in the
May/June 2004 edition of Foreign Affairs, “resorting to
protectionism to halt the process [of reallocating labor and capital to more
profitable sectors of the global economy], is a recipe for decline.”
Drezner subsequently stresses, “An open economy leads to concentrated costs
(and diffuse benefits) in the short term and significant benefits in the
long term. Protectionism generates pain in both the short term and the
long
term.”
4. Globalization is more a business than a political
trend. It is
therefore a fact, like Krauthammer states in the May 10th
edition of “TIME,” that no government has the power to influence its ups and
downs. It is, hence, senseless to honor administrations for job creation, as
much as it is to accuse them of job losses. The article clarifies that job
creation in the 90’s was not President Clinton’s virtue, but the result of
business
decisions made at that time by globally operating corporations such
as Microsoft and IBM. In a similar perspective, the current job losses in
the U.S. cannot be attributed to President Bush, but to the development of
the Internet and the decisions of business corporations to take
their outsourcing practices to the next level at this time.
5.
Opening one’s mind for globalization enables every individual to realize the
various fascinating trends that are present in the world, and get a better
understanding of the specific characteristics of the various continents:
everyone has its own interesting qualities. In the May 24 edition of Forbes,
for instance, China is reviewed as a country with a culture that rather
focuses on challenges than achievements, which may
explain their tremendous
economical growth in the past 25 years. Especially when compared to Latin
America, which experienced a meager fourth of China’s growth, most likely
because of the predominant mentality in this part of the world to blame all
other nations and continents but itself for its slow growth.
6.
Globalization is just the market of pure competition seen in a larger scope:
there are a large number of autonomous and knowledgeable buyers and sellers
of an identical product, so the performance of one player affects that of
others. The May 10, 2004 edition of Business Week explains that India’s IT
industry grew through self development and hard work from a pool of talented
people, and not through “political support or patronage.”Isn’t this, then,
exactly what business is about? In the business world we see that one
organization benchmarks in order to find out what it can learn from
competitors. On basis of the findings from this process of leveling, the
organization increases the quality of its products and processes.
The ultimate goal of the organization is to find more customers for
its products.
Now, if you understand this simple economical principle,
globalization should be easy to understand and accept. If we value the
concept of complete market competition within our local economy, why should
we oppose it at a global level?
7. The outcome of globalization
will definitely not be negative for countries that have demonstrated
resilience in the past. Even while the scare for job flight is at its height,
the signs of new job creations are already emerging. And, as Drezner states
in the May/June 2004 edition of Foreign Affairs, “The creation of new jobs
overseas will eventually lead to more jobs and higher incomes in the United
States.” Drezner elaborates that the lion share of jobs in the U.S. require
being local by their very nature, and from those who actually lost their work
to overseas competitors, the majority has been repositioned within their own
company.
8. Like businesses, countries will learn to focus on their
area of expertise through globalization. The perfect competitive market
situation that is currently emerging will result in that. And once every link
in the global production chain knows its specialty, mutual respect and
acceptance will increase, as well as an improved level of organization in
what currently seems chaotic.
9. Globalization offers so many
opportunities that are still
unexploited. People and companies in
industrialized countries should, for example, learn to adapt their products
and services to the great, untapped market of poor global citizens. A simple
adjustment of packaging and size can do miracles. The greatest mistake any
player in the global arena can make – as we have found out by now – is to
underestimate the potential of any stakeholder. But if, as Hammond and
Prahalad suggest in the May/June 2004 edition of Foreign Policy, “large
businesses stop regarding the world's 4 billion poor people as victims and
start eyeing them as consumers,” globalization may truly show its exotic
beauty and tremendous strength to the max.
10. The best way to
handle globalization is to let it crystallize itself out. Think of a
crossroads where the lights are out of order: most of the time things work
out fairly well as long as the traffic participants have to look out for
themselves. It’s only when the hand of the law starts to interfere that long
lines and aggravated drivers start developing. Governments should bring up
the maturity to recognize the necessity of allowing the world to interact
uninterruptedly. We initiated this trend, now the best thing we can do is to
leave it alone.
Dr. Joan Marques,
Burbank, CA,
27/5/04
References:
* Anonymous. (2004). DON'T MAKE
OUTSOURCING A SCAPEGOAT FOR WESTERN WOES. Business Week(3882), 7.
*
Anonymous. (2004). Evaluating Potential in Emerging Markets. World
Trade, 17(6), 30.
* Drezner, D. (2004). The Outsourcing Bogeyman.
Foreign Affairs, 83(3), 22.
* Forth, K. (2004). The road to Bangalore.
FDM, 76(6), 4.
* Hammond, A., & Prahalad, C. K. (2004). SELLING to
the POOR. Foreign Policy, 142(30), 8.
* Krauthammer, C. (2004). Where
Presidents Have No Power. TIME, 163(19), 88..
* Wright, T. (2004).
Opening Doors, Crossing Cultures. T+D, 58(5), 25.
* Zedillo, E. (2004).
On China's Rise. Forbes, 173(11),
043.
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About the
Author:
Joan Marques emigrated from Suriname, South America, to California,
U.S., in 1998. She holds a doctorate in Organizational Leadership, a Master’s
in
Business Administration, and is currently a university instructor
in Business and Management in Burbank, California. You may visit her web
sites at http://www.joanmarques.com
and
http://www.spiritcounts.com
Joan's
manual "Feel Good About Yourself," a six part series to get you over the
bumps in life and onto success, can be purchased and downloaded at:
http://www.non-books.com/FeelGoodSeries.html
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