Keywords: globalization, global business, michael chibba
Historical and conceptual aspects of globalization and global business
By Michael Chibba
Growing a business to the global level and sustaining its competitiveness is extremely challenging, even under the most favourable conditions. Bearing this in mind, the purpose of this paper is two-fold: to sketch selected historical and conceptual aspects of globalization and global business; and to outline the cornerstones of global business. The discussions and viewpoints presented are not intended to be exhaustive; rather the intent is to highlight what I view as some key points that fall within the scope of this brief paper. Moreover, as a practitioner (in the fields of business and economics) and policy expert, my viewpoint is guided by my experience, knowledge and deep interest in all matters of business, economics, policy and strategy. My perspectives are also tempered by the opinions and arguments of others, and this imparts some balance and a broader scope to the discussions and analyses presented than would otherwise be the case.
Globalization and Global Business
Along with the recent rise of economic globalization, the use of the term “global business” (GBiz) - in lieu of, or in addition to, the relatively established term “international business” - is increasing in virtually all business and related global contexts. GBiz is today all the rage from business schools to private enterprises to state-led global firms to researchers, academics and policy-makers. Given that there is no received wisdom on what exactly is a GBiz, I define it simply as any business that has a global or international dimension and thus the world is its business territory. To add some depth to this definition, and also to offer a semblance of the nature and scope of the subject, here are a few complementary perspectives that are prima facie self-explanatory:
“Global business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies and organizations” (Czinkota et al. 2004)
“… at the center of globalization when things go well international corporations can marshal enormous resources, spread the most advanced technology, and increase available markets exponentially … (but)… the problems of corporations pursuing policies that impose costs on society which the firm itself does not bear (offers a simple lesson:) incentives matter, and governments and the international community must work harder to ensure that the incentives facing corporations are better aligned with those they touch …” (Stiglitz 2006: 187-210; parenthesis added)
“Multinational companies of the 21st century will evolve into globally integrated enterprises … (with headquarters-based) knowledge operations distributed to other countries … (and) through the capabilities of information and communication technologies coordinated to develop and deliver products and services for both global and local markets… (moreover) through this approach, new career routes are opened up within the company that are truly international/ global…”
Indeed, globalization and business - at both national and international levels – are closely linked. Globalization, as defined by Rugman and Hodgetts (2003) in their book entitled International Business is “ the production and distribution of products and services of a homogeneous type and quality on a worldwide basis”. But the concept of globalization is de facto broad in scope and hence the definition depends on the viewpoint being espoused. There are at least five main conceptualizations of globalization, including discussion of its nature and origins (Moore and Lewis 2009; Steger 2009). One viewpoint suggests that globalization has ancient roots and it is a long-term process. The second perspective contends that globalization began with the emergence of the early capitalist system some five centuries ago. The third, argues that the breakthrough to globalization occurred in the 19th century. The fourth attributes the relatively recent collapse of the communist ideology as the turning point in the rise of globalization. And with the fifth conceptualization, as expounded by Moore and Lewis (2009: xiv-xv), globalization is perceived to have five dimensions: (a) “internationalization” -- or as put by Govindarajan and Gupta (2001:4), globalization is “the growing economic interdependence among countries, as reflected in the increased cross-border flow of three types of entities: goods and services, capital, and know-how”; (b) the related phenomenon of “liberalization … (towards an) open, borderless, world economy”; (c) “universalization” (or as a synonym of “worldwide”); (d) “westernization or modernization, especially in its Americanized form”; and (e) “deterritorialization” or reconfiguration of geography, so that social space is no longer wholly mapped in terms of ..... Read more
