GE 3

5 Different interpretations of globalization according to john scholte

1. Internationalization -refers to growth of transactions between countries,

disregarding uniqueness of current condition
2. Liberalization- Removes constraints of movement of goods and people
3. Universalization - The idea of global convergence
4. Westernization - Western social structures of modernity are spread to the rest of
the world without any local adaption
5. Periodization - a means to systemize historical processes.

3 approaches of contemporary globalization

1) Globalists- the globalists view could be viewed in the eye of a pessimistic globalist
or the optimistic or positive globalist
2) Internationalists - views argue that globalization is a myth. They believe that most
economic and social activity is regional rather that global
3) Transformanationalists - views argue that the nation state still remains powerful
they also see the problems can be reversed by restructuring and accommodate the
new forms of global governance.

The effects of globalization in global economic, politics, social and cultural existent.

1) Global economic

 Breaking down of national economic barriers

 International spread of trade, financial and productive activities
 Growing power of transnational cooperation and international financial
institutions.

2) Politics

 Globalization of national policies – influenced by international agencis

 Reducing economic role of govt
 Political lobbying
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3) Social

 Withdrawal of national govt from social sectors ie(for example) declining

share of govt in public spending, reducing social benefits for workers (social
dumping, pension cuts, subsidies reduction)
 Labor reforms and deteriorating labor welfare:-

o Minimum wage fixing

o Employment security
o Modifying tax regulation
o Relaxed standards of security

4) Culrural

 Increased pace of cultural penetration

 Globalization of culture
 Development of hybrid culture
 Resurgence of cultural nationalism ie(for example) shivsena opposing
valentine

Different drivers of globalization

1) Technological drivers

Technology shaped and set the foundation for modern globalization. Innovations in the
transportation technology revolutionized the industry. The most important developments
among these are the commercial jet aircraft and the concept of containerisation in the
late 1970s and 1980s. Inventions in the area of microprocessors and telecommunications
enabled highly effective computing and communication at a low-cost level. Finally the
rapid growth of the Internet[1] is the latest technological driver that created global e-
business and e-commerce.

2) Political drivers

Liberalized trading rules and deregulated markets lead to lowered tariffs and allowed
foreign direct investments in almost all over the world. The institution of GATT (General
Agreement on Tariffs and Trade) 1947 and the WTO (World Trade Organization) 1995 as
well as the ongoing opening and privatization in Eastern Europe are only some examples
of latest developments.
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3) Market drivers

As domestic markets become more and more saturated, the opportunities for growth are
limited and global expanding is a way most organizations choose to overcome this
situation. Common customer needs and the opportunity to use global marketing
channels and transfer marketing to some extent are also incentives to choose
internationalization. (Ferrier, 2004)

4) Cost drivers

Sourcing efficiency and costs vary from country to country and global firms can take
advantage of this fact. Other cost drivers to globalization are the opportunity to build
global scale economies and the high product development costs nowadays. (Ferrier, 2004)

5) Competitive drivers

With the global market, global inter-firm competition increases and organizations are
forced to “play” international. Strong interdependences among countries and high two-
way trades and FDI actions also support this driver.