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Lecture 5

ADM1301 Lecture 5: Chapter 6

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Rumaisa Shaukat

Chapter 6- Globalisation and Multiculturalism Globalisation: What is it?  Globalization: the merging of previously domestic spaces and issues into one multifaceted and interconnected transnational global village.  A term used to describe the growing interdependence of people around the world with regard to societal influence, economies, and cultural exchanges  Refers to the increasing economic integration and interdependence of countries  A global movement to increase the flow of goods, services, people, real capital, and money across national borders in order to create a more integrated and interdependent world economy “Types” of Globalisation  Economic globalization: integration of fragmented markets. Economic relations where diff companies exchange resources for greater efficiency  Political globalization: different nations opinions are needed before making decisions  Social or cultural globalization: how different cultures work together and how different cultures merge together to form a third culture Going Global: Phases of Development  Domestic phase: entrepreneur who start a business want to be able to attract customers after creating a unique product/service. Wants to know what your domestic customers want. Worried more about home country o Product orientated stage  Multi-domestic phase: after business is more stable and understand what customers want, the business may go beyond their original boundaries o Market orientated stage  Multinational phase: firms do business w/ other countries o Diff. between international and multinational. International involves 2 countries while multinational involves more. o More firms operating in more than 2 countries  Global phase o Countries become really large o Diff between global and multinational. Business will have total autonomy and control in different areas of the world Globalisation: Key drivers  Market o Companies may want to explore new markets o May be make more money o Demand for product/services in other parts of the worlds  Cost o When in your home country, there is demand for your product/service but lots of competition. Countries consider operating in other parts of the world to cut costs (cheaper labour force/ raw materials)  Competition o Has led to an increase in world trade  Government o When gov’t has better deal and better agreement in country so business may find benefit to move operations/activities there  Technology o Advancement in tech. has allowed globalisations to increase b/c it is more easier to communicate Globalisation Emerging Themes  Interconnectedness: knowing that you are somehow connected to the other culture that you’re dealing with  Interdependence: where there is a strategic alliance with another firm/organisation at another part of the world may have better access to resources  Integration: only succeed when you can integrate your differences o How can you integrate your differences for a specific goal  Complexity: diversity makes  Competition: competition is more in a globalised setting  Risk: offers both opportunities and risks for developing countries. Some regions in Asia have benefited from globalisations but regions in Africa have suffered from it. Questions to ask: is the risk worth it?  Ethical dilemmas: there is no one best way to deal with ethical dilemma  Civil society: globalisation has increased the importance of civil society groups especially the ones that can act across state borders.  Social Responsibility: more socially responsible; shows intercultural sensitivity for emerging nations  Culture: there has been an intensification and expansion of cultural flows acorss the globe. It as has been said that culture are becoming more homogenised especially as pop culture becomes more widespread  Laws: Globalisation can create “new issues for Business 1. Damage to environment 2. Support for oppressive regimes & Arms Trade 3. Criticism of marketing practices (e.g., tobacco, pharmaceutical, baby formula, etc.) and manufacturing plant safety practices 4. Treatment of employees (e.g., sweatshops and labour abuses) 5. Treatment of indigenous peoples 6. Genetic modification of plants and animals 7. Corruption, bribery and questionable payments Globalisation: Good or Bad?  There is considerable debate over whether globalization is good or bad Arguments FOR globalization: 1. Increases economic growth rate, prosperity and opportunity for all participants: trade benefits everyone 2. Private corporations and open markets provide better goods and services to society: quality of products and services is generally better 3. Increases civil liberties and reduces inequalities 4. Leads to lower prices, higher employment in developing countries and better standards of living: quality of life is supposed to improve 5. Facilitates the transfer of technology, capital, intellectual property and skilled labour 6. A cleaner world environment 7. Rising standard of living in developing countries not v. important 8. Limits on international behaviour Arguments AGAINST globalization: globalisations has polarised the world; rich countries are getting richer and richer and poor countries are getting poorer and poorer 1. Increases the wealth of giant corporations and leaves developing countries poorer o i.e. multinationals become richer but they do not transfer their workers in foreign countries 2. Harms the environment o Many multination move production to other countries where environmental laws are slacker 3. Neuters government’s ability to govern and results in conspiracies between corporations and governments o international org. are being given the power to influence gov’t decision 4. Increases unemployment in developed countries 5. Reduces standards (manufacturing, health, quality, environmental) 6. Periodic financial crises are caused, disrupting the economies of many countries o What effects one country whether negatively or positively can affect another country in a negative or positive way as well 7. Intellectual property is not respected 8. Homogenizes cultures o This may one day result in one single, materialist “globalised culture”. 9. Fuels income inequality between nations 10. Increases the gap between haves and have-nots 11. Causes problems that cannot be resolved by single nations o Ex. overfishing and global warming. o These problems can only be solved with a collaborative effort from many countries. 12. Globalization institutions run by developed countries Globalisation’s Impact of Government  Perceptions of loss of ability to govern: gov’t are losing control b/c of international companies  Changes in industrial policy and the instruments available o Some gov
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