The Benefits of Globalization - Essay Example

Part A Week Two: About Globalization Globalization as a concept refers both to the compression and the intensification of consciousness of the worldas a whole (Roberson, 1992). Waters (2001) thinks that globalization is a social process in which the constraints of geography on economic, social and cultural arrangements recede, in which people become increasingly aware that they are receding and people act accordingly. The benefits of globalization are that some of the people think that globalization is a good thing. The more there is free trade; more will be the economic growth. In fact, government provides some job opportunities, and welfare net. Nowadays, more and more people are having a higher standard of life because of globalization, and travelling has become common, whether its for business or pleasure (Lewis, 2005). However as criticism, people think that the disadvantages are easy to see by looking at occurrences that happen all over the world. Political decisions, weather catastrophes, wars, and many other things, no matter where they happen, seem to affect jobs, economy, and even gas prices (Lewis, 2005). Globalization may lead the disadvantaged companies to the situation of bankruptcy. In order to gain better development, a firm is much difficult to avoid the fierce competition in an open and liberal economic environment (The Economics, 2007). References Roberson, R. (1992) Social Theory and Global Culture. SAGE Publication Ltd. Waters, M. (2001) Globalization. 2nd ed. New York: Routledge. Lewis, W. (2005)Globalisation: Good or Bad? Guardian Unlimited.  The Economics.(2007) Hard Truths about Helping The Losers From Globalisation [Online]. Available from: http://www.economist.com/printedition/2015-02-13[Accessed on: 13rd February 2015]. Week three: Trading blocs Over the years, countries throughout the world have formed many regional trading blocs, and there is without a doubt that they play an important role in the world economy and trade (Wang, 2010). A trading bloc is an association of countries that reduces intra-regional barriers to trade in goods and sometimes services, investment, capital, and labour as well (Schott, 1991). However, trading blocs can be used as a partial justification to explain the formation of the NAFTA as a response to the European Union (EU), and the strategic change of ASEAN as a response to both NAFTA and the EU (Malhotra, et al., 1998). There have different levels of trading arrangements: (1) Zero integration: no systematic, economic inter-dependency, primarily because there is little if any economic or social motive for trade (e.g. Outer Mongolia and the USA). (2) Bilateral treaties of limited scope: permissive agreements covering specific sector of trade flows (e.g. Commerce and Friendship Treaty between the USA and Australia). (3) Free trade areas: each member state removes trade barriers to the entire member trading partners. (E.g. North American Free Trade Agreement of 1994). (4) Customs union: it entails the removal of formal trade barriers among the members and presupposes a far wider range of policy consultation and agreement among the member states. (E.g. the original Benelux was a customs union). (5) Common market: it requires not only the free movement of goods internally and common external tariffs but also full factor of production movement (labour, capital, etc.) within the defined market area. (E.g. EC 1992). (6) Economic union: it is the highest level of integration, short of merging members into one single political entity. (E.g. EU) (Kenevan and Winden, 1993). Therefore, each of these phases assumes a convergence of the key elements of the marketing mix among the members (Robson, 1984).  Reference Kenevan, P. and Winden, A. (1993) Flexible free trade: the ASEAN free trade area. Harvard International Law Journal, 34(1), pp. 224-40. Robson, P. (1984) The Economics of International Integration. Allen and Unwin, London. Schott, J.J. (1991)Trading blocs and the world trading system. World Economy, 14(1), pp. 1-17. Malhotra, N. K., Agarwal, J. and Baalbaki, I.(1998) Heterogeneity of regional trading blocs and global marketing strategies A multicultural perspective. International Marketing Review, 15(6), pp.476-506. Wang, N.(2010) The Relationship between Regional Trading Blocs and Globalization. International Journal of Economics and Finance, 2(1), pp.171-173. Week four: Multinational Company As we all know, multinational company is defined as a company or an organization which operates in several different countries. Typically, Kumar (2013) said that the multinationals have operated in developing countries, where they provide technology, finance capital and marketing skills in return of a profitable market. One of the most important strategic motivations for them is to achieve higher value and market share through expansion of products and services (UNCTAD, 2008). Take Tata (the largest business and it was operating in seven businesses with 96 companies in six continents, and employed 350,000 people (Tata, 2008)). For example, from 2000 to 2008, Tata acquired Jaguar, Land Rover, 8 O clock Coffee, General Chemicals (USA), Tetley, Pearl Group, Corus Steel (UK), Daewoo (Korea), NatSteel (Singapore), Millennium Steel (Thailand), CEC (China) and so on. All of these has strengthened the economic connections between one country and other countries all over the world and has taken part in the improvement and development of relevant countries and areas. However, according to Sethi (2009), those multinational companies will also take the challenge seriously. These challenges include competitive threat, technological backwardness, unsophisticated products, running of inefficient plant, lack of international experience, weak political institutions, corruption, financial imbalance etc. India’s oil or gas sector EEMs are the most dispersed, since they have to seek these scarce resources globally despite of the logistical disadvantages (Sethi, 2009). Reference Kumar, N. (2013)Managing reverse knowledge flow in multinational corporations. Journal of Knowledge Management, 17(5), pp.695-708. Ghemawat, P. (2001) Distance still matters: The hard reality of global expansion. Harvard Business Review, 79(8), pp.137–147. Sethi, D. (2009) Are multinational enterprises from the emerging economies global or regional? European Management Journal, 27, pp.356–365. Tata (2008) Leadership with trust[online]. http://www.tata.com/aboutus/sub_index.aspx?sectid=8hOk5Qq3EfQ=[Accessed 10/03/15]. UNCTAD (2008) World investment report 2008. United Nations, New York and Geneva, pp.26–32. Week Five: Culture This week was about the culture. After the classes, I came to know that culture is a symbol of the country. As we all know, culture has many different meanings. Some scholars consider that the culture is an appreciation of good literature, music, art, and food (Kim, 2012), while, others think that culture is the full range of learned human behavioural patterns (Kim, 2012). From those definitions, it can be concluded that culture is diversified. But it could be distinguished as the culture is a part of our identity. In this complex environment, people have come from many different parts of the world and they often retain much of their original culture and traditions (Kim, 2012). For example, its easy to spot subcultures in the United States including ethnic groups such as Chinese Americans, African Americans and Mexican Americans (Dongsheng, 2000). They have a common identity, food tradition, dialect or language, and other cultural traits. However, Carley (1991) thinks that culture is the distribution of information, either country to country or person to person, such as language, ideas, technical knowledge, etc. Therefore, the models of information diffusion are complementary as the transmission of elements of culture in a society. For example, translation is a cross - cultural language communicative activity, which is not only the process of language transformation, but also a kind of cultural transmission activity. Because Language is the carrier of information and translation are a cross-cultural communication, the essence of it is transmissibility. At the same time, I believe that education also is a typical communicating activity of culture. The nature of teaching and learning is to spread information. Reference Carley, K. (1991) A theory of group stability. American Sociological Review, 56(3). Dongsheng,F. (2000) Layers of Culture. Journal of Foreign Languages, 3. Kim, A. Z. (2012) What is Culture? Definition of Culture [Online]. Available from: http://www.livescience.com/21478-what-is-culture-definition-of-culture.html [Accessed on: 9th March 2015]. Week Six: Cultural difference in wedding between China and Western countries Wedding is an integral part of the culture, but also is an important moment in people’s life. Due to the difference in cultures between China and Western countries, these rituals and customs form their own characteristics. These characteristics are: 1. Wedding location. For Chinese, wedding is considered as lively, inviting many relatives and friends, therefore the wedding locations are generally chosen in convenient locations like a spacious courtyard or hotel. But in Western countries, wedding ceremony is held in a church or outdoor. 2. Dress colour. In Chinese wedding, the main colour is red, which is the Chinese traditional representative festival colour and generally the bride will wear red gowns. However, in Western wedding the main colours are white. The bride usually always wears white wedding dress, representing the holy and faithful (Ebster, 2005). 3. Wedding dress style. In China, traditional wedding dress is chaplet and official robes (Chew, 2007). Now for influence of the western wedding customs, more and more people also accepted the white wedding dress. Bride usually wears white wedding gown in the beginning, but when they toast, the bride will change the traditional dress into red colour (Anonymous, 2015). On the contrary, in the western wedding, the bride will always wear white wedding gown, while the groom wears a black suit which can make the whole wedding feel solemn (Anonymous, 2012). Conclusions As a result, 1. Chinese weddings are beaming whereas the Western weddings are romantic. 2. Chinese weddings emphasizes on the value of the ceremony, whereas the Western weddings emphasizes on the weddings sense. Reference Anonymous.(2012)The Culture of the Wedding Gown. Wall Street Journal (Online),12, pp. n/a. Anonymous.(2015) Wedding wows; Marriage. The Economist, 414(8927), pp. 38. Chew, M. (2007)Contemporary Re-emergence of the Qipao: Political Nationalism, Cultural Production and Popular Consumption of a Traditional Chinese Dress. The China Quarterly, 189, pp. 144-161. Ebster, D.M.(2005) The New American Wedding: Ritual and Style in a Changing Culture. Library Journal, 130(17), pp. 76. Week seven: Case study: Muslim Cola Bringing all the points of three weeks together and comparing them it focuses on the different cross cultural frameworks, the characteristics of culture bound and culture free products. While the seminars explores in more details the whole issue of Muslim Cola, first of all, Mecca Cola and Qibla Cola cannot compete with Coca Cola, because they pay more attention to religion and culture including beliefs. If Coca Cola wants to enter a new market, it will have to change their packaging and colour to meet the local culture. So, if Muslim Cola, that these cola companies want to attract on wider audience of Muslim, this is a problem. The approach was to position its brand name like Mecca as a brand that is also a badge of belief (Gray, 2003). But, politics and political events may impact consumer behaviour, competition, and business strategy. Furthermore, in recent years, both the biggest global brands are talking about their local roots as brand. They need to change the packaging and bottle colour appeal to attract wider audience to buy it. However, as the CEO of the leading company Coca-Cola, it is unlikely that Muslim Cola poses a real threat to the entrenched hegemony of Coke (Majidi and Passariello, 2003). Yet that doesnt mean American brands can afford to be complacent. "Consumer attitudes toward American brands can change quickly, if something put in the wrong place"(Geoffrey, 2003). Muslim Cola need to do some marketing researches about another countrys local culture, environment, and the main problem is to change the product on time. Reference Gray, R.(2003) Badge of belief. Marketing, pp.34-35. Majidi, N., and Passariello, C. (2003) After Iraq, Cola wars heat up[ online]. Business Week. Available from: http://www.businessweek.com/bwdaily/dnflash/apr2003/nf20030417_5930_db039.htm. [Accessed on: 27th March 2015]. Geoffrey, A.(2003) The Assault on Iraq: Anti-American Tensions Try Multinationals Ties --- Longtime Building of Images As Local Brands Pays Off In Foreign Buyers Loyalty. Wall Street Journal, Eastern edition, New York, N.Y. Week Eight: Ethics and Koodo This week all together we learn about the Ethics, and the seminar held this week looked at the case study, Koodo mobile in the Canadian cell phone market. After reading this case, I found that Koodo was the first mobility company to eliminate activation and system access fees as well as the first to offer Canadians more affordable and flexible data. While, facing these challenges, Koodo need to offer a simple and transparent approach to mobile service (Paul, 2010). Telus need to create an organization that mirrors the true makeup of our Canadian neighbourhoods from coast-to-coast, enabling them to better understand and support the needs of their clients. Through this approach, the power of diversity and inclusiveness to help them deliver on their top priority to consistently put their customers first in everything they do by being a genuine reflection of their society, their markets and their customers (Paul, 2010). Both of them took some initiatives, for example, in 2003 Telus contributed to organisations such as Wapikoni Mobile in Rimouski, facilitating social rehabilitation for Aboriginal youth through art programmes; the Metropolitan Community Church of Toronto’s Triangle Programme enabling LGBTQ and at-risk youth to be themselves and be valued for who they are; and the BC Wheelchair Basketball Society’s Let’s Play Programme that helps children and youth with varying abilities participate in sports. Meanwhile, Koodo also launched a partnership with Scotia Bank and became their featured partner for their New Immigrant program. New Canadians participating in the Scotia Bank Startright program received an exclusive offer of 30 free international long distance minutes (Horn, 2014). After reading the article, I can see ethical marketing needs high ethical standards, while trust is the foundation for the efficiency and effectiveness of the market system and it is nurtured with high ethical standards. The law alone is not enough to ensure a sufficient quantity of honesty so that the marketplace operates smoothly and fairly. References Horn, J.(2014) Koodos Wrestler Hits The Small Screen. Strategy, pp. 8. Paul, J.(2010) Koodo pulls no punches with El Tabador. Strategy, pp. 23. Week Night: Polities and legal This week has introduced the political and legal aspect of PESTEL analysis. The two main types of law that affects global marketing are the political risks and the legal risk and here are some frameworks for analysis. Covered with Political factors, Economic, Social, Technological, Environmental and Legal, PESTEL analysis is a framework or tool used by firms to analysis the macro environment (Yüksel, 2012). This model plays an important role in the value creation chances of a strategy (Srdjevic, 2012). For Optimax, the Political factors are: 1. Trade barriers 2. Eye/sight government approach for 3. Healthcare business rules and regulation reception 4. intellectual property protection 5. stability of government 6. tax 7. qualification for laser eye operators 8. health insurance 9. Trade Tariff 10. Security management and sale management 11. Equipment 12. Trade restriction 13. Trademarks 14. Foreign currency exchange 15. Fixed assets and shares Economic factors can further be subdivided into two factors: macro-economical and micro-economical factors (Srdjevic, 2012). It includes Inflation rate, GDP growth rate, GDP etc. Furthermore, social factors can also help companies to change the strategies or help management to adapt to any trends. These factors include innovation of technology and automatic technology (Yüksel, 2012). While, the legal factors are: 1. Discrimination law 2. Employment law 3. Safety standards 4. Legal litigation 5. Intellectual property protection 6. Employment law- opening law 7. Insurance requirements 8. Intellectual property protection 9. Employment law- opening law 10. Trading law 11. Health system 12. Advertising standards, 13. Product labelling 14. Product safety 15. Health-care risk All of these factors including trade tariffs and trade restrictions, etc are the screening criteria of the countries. Government factors have significant influences on business environment or economic environment (Lin, 2006). These factors determine the degree to which a government intervenes in the economy (Yüksel, 2012). So, we can see that Political risks may cause changes in the political environment that may adversely affect the value of a firm’s business activities (Lin, 2006). References Lin, H. (2006) Ethical Applications of Technology in HRD: A PEST Analysis and Implications.19(4), PP. 91-105. Srdjevic, Z., Bajcetic, R. And Srdjevic, B. (2012) Identifying the Criteria Set for Multicriteria Decision Making Based on SWOT/PESTLE Analysis: A Case Study of Reconstructing A Water Intake Structure. 26(12), PP. 3379-3393. Yüksel, I. (2012) Developing a Multi-Criteria Decision Making Model for PESTEL Analysis. International Journal of Business and Management, 7(24), PP. 52-66. Week 12: Global Marketing Context This week has introduced the Global Marketing Context. Marketing environment is the factors and forces outside marketing that affects the marketing management’s ability to build and maintain successful relationships with target customers. Marketing environment consists of two parts: Micro environment and Macro environment (LEONIDOUR, 2010). While, Micro environment includes the company, its suppliers, marketing intermediaries, customer markets, competitors and Publics. Macro environment includes Demographic, Technological, Economic, Political, Nature and Cultural factors (Craig and Douglas, 2005). For example, Wal-Mart’s Macro environment deals with, 1. Demographic: according to Wal-Mart, there are 3 types of shoppers: price-value shoppers, brand aspirationals and price-sensitive affluent. 2. Economic: in 2007, Wal-Mart Stores Inc. reported a 10 percent increase in third-quarter profit, and in 2008, as the world largest retailer’s renewed focus on low pricing thereby attracting financially squeezed shoppers around the world. 3. Nature: in October 2005, Walmart announced that it would implement several environmental measures to increase energy efficiency. 4. Technological: in 2011, the company announced that it was testing its new “Walmart to go” home delivery system where customers will be able to order specific items offered on their website such as groceries, toiletries, and household supplies (Castells, 1996) and this electronic business platform for the domestic market provided a better marketing environment. 5. Political: in 2011, Walmart donated 338 million lbs of food for hunger relief. By the end of this week, I have understood how these forces influence international marketing activities (Moyne, 1995). References Castells, M. (1996) The rise of the network society. Oxford, Blackwell Publishers. Craig, C.S. and Douglas, S.P. (2005) International Marketing Research. Wiley, New York, NY. LEONIDOUR, L.C., BARNES, B.R., SPYROPOULOU, S. and KATSIKEAS, C.S. (2010) Assessing the contribution of leading mainstream marketing journals to the international marketing discipline. International Marketing Review, 27(5), pp. 491-518. Moyne, S. (1995) Research note: international marketing management: a separate academic discipline. International Marketing Review, 12(3), pp. 5-14. Week 13: Global marketing Context and Risks This week we have watched an interview with Jack Ma, the founder of Alibaba, and discussed a report with global risks 2015. Globalization refers to the shift towards a more integrated and interdependent world economy. Globalization has more than 5000 definitions, one of them provided by two Economist journalists. Globalization is ‘the free movement of goods, services, ideas and people around the world (Stiglitz, 2002).’ While, global marketing focuses on resources, global market opportunities and threats, and difference in the scope of activities because global marketing occurs in markets outside the organization’s home country (Bartlett and Ghoshal, 2000). Globalization has more global risks and it includes political risk, country risk and exchange risk. If the company wants to reduce the global risk, they need to have good relationship with host government (Levitt, 1983). This is an indispensable condition for reducing the global risks. Another integral part is corporate social responsibility, which is about sexism against employees and employee satisfaction. Generally, we may see an increase in sex discrimination suits in the workplace, especially if there are significant layoffs and employers let go off more women than men. In Alibaba, Jack Ma pays more attention to status of women. Many top managers were women in his company (World Economic Forum, 2015). However, employee satisfaction also was important which shows that employees were satisfied with their jobs (Stiglitz, 2002). References Bartlett, C.A. and Ghoshal, S. (2000) “Going Global: Lessons from Late Movers”. Harvard Business Review. Levitt, T.(1983) The Globalisation of Markets. Harvard Business Review. Stiglitz, J.(2002) “Globalisation and its Discontents”. W.W. Norton, New York, and Allen Lane, London. World Economic Forum. (2015) annual meeting [online]. Available from: http://webcasts.weforum.org/widget/1/davos2015?p=1&hl=english&a=62866 [accessed on: 17th May 2015 ]. Read More