MGMT 110 Lecture Notes - Lecture 1: Financialization, Global Brain
Globalisation
• Globalisation refers to a multidimensional set of social processes that create,
multiply, stretch and intensify worldwide social interdependencies and exchanges
while at the same time fostering in people a growing awareness of deepening
connections between the local and distant.
• Economic globalisation is a subset of globalisation
• According to Clegg et al., globalisation means:
• The worldwide integration in virtually every sphere achieved principally
through markets
• A process whereby the world becomes more interconnected and the fates of
those people and organisations within it become further intertwined
• In business terms, globalisation means business without frontiers, crossing
national boundaries, and dealing with the world, not just the home base
• Dimensions of globalisation
• Economic (global trade, world financial markets, multinternationals,
networking, international trade and business, new labour markets, new
development cooperation)
• Political (human rights, international terrorism, war and new security
problems, IP rights, trade blocs
• Ecological (sustainability, use of common resources and legislation)
• Social/Cultural (society of different identities – local, political, gender, family,
religion, national, individual, social)
• Thomas Freidman’s eras of globalisation
1. Globalisation 1.0
• 1492-early 1800s
• Defined by country globalisation
2. Globalisation 2.0
• Early 1800s-2000
• Defined by company globalisation
3. Globalisation 3.0
• 2000-present
• Defined by individuals
• Rapid
• The dynamic agent of the three eras of globalisation changed from the country, to the
organisation, to the individual
• Convergence of technology (transportation, communication, information)
• Globalisation has caused a reduction of time, space and distance – collapsed it to
immediacy
• Organizations have become much larger and more complex than they were in the
1950s and 1960s. In 1955 General Motors was the largest corporation in the world. It
employed 624,000 individuals and earned a profit of $1.2 billion, prompting then
President Charles Wilson to proclaim to the U.S. Congress that what was good for
GM was good for the country. Today, one of the largest corporations (Walmart)
generates nearly $14 billion in profit and employs 2.1 million people in over 15
countries around the world. Corporations now rival countries in terms of productivity.
Of the 100 largest “economies” in the world, 51 are corporations. While corporations
do not yet have the right to vote, they have acquired substantial power to fund and
influence the outcome of elections in the United States. – Clawson & Neustadtl, 1989
• Globalisation has a technical core, which is organised in terms of flows of inputs,
global distribution, transformation and outputs, organised through global supply
chains
• Why globalisation?
• Economies of scale in production
• National differences in availability and cost resources
• Economies of scope in marketing and distribution
