Chapter 9 Globalization and Culture

1. Chapter 9Globalization and Culture • Team 8- Japan • Jacob Henson, Nils Floren, Aaron Whitmire, Brandon Allen, Cory Rogers, Sergio Torres, Jose Contreras, Kelli Philp, Thomas Freeland, Melissa Giussani

2. Paradox 9.1 • Can global economic integration occur without political and cultural integration?

3. John Naisbitt • John Naisbitt believes • Most ethnic groups want the positive aspects of economic integration • Ex. lower tariffs and moving capital across borders • Do not want to politically and culturally integrate

4. John Naisbitt • Naisbitt predicted that there will be 1,000 small nations divided by religion, language, and ethnic backgrounds • Since the Cold War ended there have been over 20 new countries in Europe • Andorra, an ethnically distinct region between Spain and France, became its own nation • Yugoslavia became four new nations after the Balkan Wars

5. Economic Integration • Economic integration can happen without political and cultural integration • World Trade Organization (WTO) • European Union (EU) includes 27 nations • North American Free Trade Association (NAFTA)

6. Economic Integration • Issues with economic integration • Not all countries conform to currency • One negative vote can stall action in the EU • Mexico, Canada, and the USA fight with each other making trading tense • Doha trade discussions have been cancelled

7. Economic Integration • Lower overall costs with economic relationships • Increased contact between different groups lead to integrating politically and culturally • Process may not be smooth • Full integration of politics and culture is unlikely to occur

8. Paradox 9.2: Is Globalization a myth? Globalization: the process by which regional economies, societies, and cultures have become integrated through a global network of political ideas through communication, transportation, and trade

9. Segregated • Some Areas that have not been touched by Globalization: -Some areas in Latin America, • Africa • Asia

10. Globalization: Connecting the World • Since 1992 trades has more than doubled between developing nations • Evolution of technology : Internet and Communications

11. Paradox 9.3 Is Globalization an old or newphenomenon? • Past View • Rome • Silk Road • 1870-1914 • Present View • Today • Business schools • Technology’s Impact

12. Four critical elements of globalization • Corporations capital base • Corporate mind-set • Supply chain • Market presence

13. Supply Chain • Wal-Mart • Huge Stores • Reverse Saturation Model • Owning their own Trucks • Distribution Centers delivering to Stores • Barry Lynn’s View • Global corporations

14. Global Financial Systems • Bond market crisis • East Asian Financial crisis • Russia banking system

15. Thomas Friedman • Wrote, “World is Flat.” • Globalization is because of: • Internet • Video Conferencing • Outsourcing

16. Friedman’s Critiques • Many believe it is a “Spiky World.” • Highest Peak • Middle Peak • Lowest Peak

17. Different Types of Globalization • Globalization 1.0 (1492-1800) • Columbus, Steam power • Globalization 2.0 (1800-2000) • Multinational corporation • Globalization 3.0 (2000-Present) • Linking individuals globally

18. In Conclusion • World is becoming more globalized, but in a different manner than in the previous eras. • Significant Overlap in previous eras. • Globalization in the past pales in comparison to what is happening today, especially with the rise of China, India, other developing nations, and market economy.

19. Paradox 9.4 • Is there a reasonable probability that a global financial collapse will occur and undermine globalization?

20. Financial Collapse • Knowledgeable analysts have expressed fear of another major financial collapse in the future. • The International Monetary Fund has identified 64 banking crises between 1970 and 1999 capable of causing a global meltdown.

21. Financial Collapse Undermining Globalization • Experiences since 1990 suggest there is a reasonable probability a global financial collapse could occur that would undermine globalization. • Companies who take part in globalization need to secure capital base and take other necessary precautionary actions.

22. Paradox 9.5 Does globalization encourage nationalism?

23. Different Examples • Wuhan University in China-2004 • MBA Students • Czech Republic Banks

24. Nationalism • “Also almost all citizens across the world identify primarily with their ethnic and national cultures and globalization threatens such identification.” Bhagwati 2004 • Study Abroad Experience

25. “At a minimum, it is critical that nationalism be contained to some extent if globalization is to succeed”

26. Paradox 9.6 • Are nations becoming simultaneously more and less powerful because of globalization?

27. Nation’s Losing Power • Jessica Matthews, “Power shift” • Increase in international trade and communication systems • Example: United States approving GE’s offer to purchase Whirlpool when the EU did not approve the offer • MNEs posses substantial resources • Modularized factories

28. On the other side… • China vs. Google • France vs. Yahoo • Law of Sea

29. Paradox 9.7 • Can one nation dominate the global economy and political system?

30. The belief of Conquering the world is nothing new… -Julius Caesar -Alexander The Great -Napoleon -Hitler -British

31. Who do people believe will be the next nation to attempt world domination? -China and or India -The Asian Century

32. Some of the factors leading to a nation’s desire to conquer other regions? • Scarce resources -Potable water -Arable land

33. What would happen if there was another attempt by one nation to rule the world?

34. Paradox 9.8 • Is Globalization doomed?

35. “Foreign Affairs”by Niall Ferguson • Five Factors • Imperial overstretch of national governments • Great power rivalry • Unstable alliance system • Presence of rogue regime sponsoring terrorism • Rise of revolutionary terrorist organizations hostile to capitalism

36. Ferguson’s Comparison • Great Britain was major power, now it’s the United States • Imports > Exports • Rivalry with China and other Nations • War with Iraq. • Allies doubt U.S. leadership due to national debt increase. • Muslim Extremism similar to Bolshevism in Russia.

37. Sesit’s View • Similarities • Low inflation • Rising commodity prices • New regional powers emerging • State-sponsored terrorism • Growing power rivalry • Financially overstretched dominant powers. • Differences • Democracy • Decline in wars in current era

38. Gupta and Govindarajan • Downplay similarities between eras. • Globalization is inevitable, although it can be derailed by nuclear warfare/epidemics.

39. In Conclusion • World changes suddenly and future is uncertain. • There are many similarities between eras and there is a call for increased attention to macro-level influences.

40. Paradox 9.9 • Does Globalization increase prosperity and inequality simultaneously?

41. Global Prosperity • Reduction in poverty • Wealth per capita • Is there a connection to inequality?

42. Inequalities • CEO’s vs. Corporate worker • Almost all OECD countries have experiences growing inequalities • Proof? • What are the affects? • Max Weber

43. Paradox 9.10 • Who are the winners and losers in a globalizing world?

44. Not Everyone Wins • The winners of globalization are clear • Who loses? • Farmers in China forced off public lands • White and Blue collar with outsourcing • Overall Economy • Should assistance be provided to losers?

45. Paradox 9.11 • Is increased education the antidote for outsourcing?

46. Engineering and Business degrees • Blue-collar vs. White-collar workers

47. Gosselin 2006: College graduate salaries decreased 5% 2000-2004

48. Outsourcing will continue

49. Alan Blinder 2006: Personal Service Jobs are harder to outsource

50. Outsourcing can be prevented in some fields but not in others