THE CONTEMPORARY

WORLD
C

GEC 106
Activity 1

Create a concept map of Globalization.

• Think about ideas, words, process or phenomenon that you think are related to
Globalization.
• Make your own definition of Globalization based on your concept map.
Samsung Electronics Co., Ltd. - is a South Korean multinational electronics company
headquartered in Suwon, South Korea.
• Samsung Electronics is currently manufacturing 50 percent of its mobile phones in
Vietnam and only 8 percent in Korea.
• At present, Samsung Electronics is running six mobile phone manufacturing facilities in
the six countries of Vietnam, China, India, Brazil, Indonesia, and Korea.
 How globalized are you?
•Activity 2

• Make an inventory of everything that you

possess that are of foreign brands.
• Which country makes the most of your possessions?
• Discuss why certain products are made in the
Philippines while others are produced abroad?
 Why study globalization?
a. Understand globalization
The perspective of the person who defines globalization shapes its definition.
Globalization is many things to many different people. If one sees
globalization as positive, the person can say that it is a unifying force. If it is
deemed as crating greater inequalities among nations, globalization is
negatively treated.
b. Globalization is the debate and the debate is globalization.
– Sociologist Cesare Poppi

The debate on globalization has grown in the past decade beyond any
individual’s capability of extracting a workable definition of the concept.

c. Globalization is a reality.
 What is GLOBALIZATION?
• the free movement of people, goods, and services across boundaries.

• the process by which businesses or other organizations develop international

influence or start operating on an international scale.
• According to Manfred Steger, the expansion and intensification of social relations and
consciousness across world-time and across world-space.

Expansion – both the creation of new social networks and the multiplication of
existing connections that cut across traditional political, economic,
cultural and geographic boundaries.
Intensification – expansion, stretching and acceleration of these networks.
• the term globalization should be used to refer to a set of social processes that are
thought to transform our present social condition into one of globality. At its core, then,
globalization is about shifting forms of human contact.

• Process of world shrinkage, of distances getting shorter, things moving closer. It pertains
to the increasing ease with which somebody on one side of the world can interact, to
mutual benefit with somebody on the other side of the world. – Swedish Journalist
Thomas Larson

• Martin Khor, the former president of the Third World Network (TWN) in Malaysia, once
regarded globalization as colonization.

• Globalization means the onset of the borderless world – Ohmae (1992)

• Globalization is a planetary process or set of processes involving increasing liquidity and
the growing multidirectional flows of people, objects, places and information as well as
the structures they encounter and create that are barriers to, or expedite, those flows.

• A term that is closely related to globalization is transnationalism (Khagram 2012), or

“processes that interconnect individuals and social groups across specific geo‐political
borders” (Giulianotti and Robertson 2007: 62).

• A related concept is transnationality, or “the rise of new communities and formation of

new social identities and relations that cannot be defined through the traditional
reference point of nation‐ states” (Robinson 2007: 1199–1201).

• Transnationalism: Processes that interconnect individuals and social groups across specific geopolitical
borders.
• Transnationality: The rise of new communities and formation of new social identities and relations that
cannot be defined as nation‐ states.
 Globalization should not be interchanged with
Globalism
Globalism Versus Globalization

• a national policy of treating the whole world as a proper sphere for political influence
– merriam-webster dictionary

• the attitude or policy of placing the interests of the entire world above those of
individual nations – dictionary.com
• Ideology
• The idea that events in one country cannot be separated from those in another and
that economic and foreign policy should be planned in an international way
- https://dictionary.cambridge.org/dictionary/english/globalism

• a policy that is worldwide in scope

Sometimes globalism means lowering trade barriers. Other times it means aggressive
foreign policy through international organizations like NATO. Other times it means
supporting a global bureaucracy like the United Nations.
 Activity 3

Introduce your name, age and address in 3 languages.

(English not included. 30 points)
 Metaphors of Globalization
Metaphor: Use of one term to help us better understand another

• Solid and Liquid

SOLIDITY describes a world in which barriers exist and are erected to prevent the
free movement of all sorts of things. It was the nation-state that was most likely to create
these “solid” barriers (for example, walls [e.g. the Great Wall of China; the wall between
Israel and the West Bank], border gates and guards), and the state itself grew
increasingly solid as it resisted change.
 However, at an increasing rate over the last few centuries, and especially in the
last several decades, that which once seemed so solid has tended to “melt” and
become increasingly LIQUID.

Solid material realities (people, cargo, newspapers) continue to exist, but

because of a wide range of technological developments (in transportation,
communication, the Internet, and so on) they can move across the globe far more
readily.
• Gas
As the process continues, those liquids, as is the case in the natural world (e.g.
ice to water to water vapor), tend to turn into gases of various types. Gases are
lighter than liquids and therefore they move even more easily than as liquids. This
is most easily seen literally in the case of the global flow of natural gas through
lengthy pipelines. More metaphorically, much of the information now available
virtually instantly around the world wafts through the air in the form of signals
beamed off satellites. Such signals become news bulletins on our television
screens or messages from our global positioning systems letting us know the best
route to our destination.
• Solidity - People, things, information, and places “harden” over time and therefore
have limited mobility.

• Liquidity - easing ease of movement of people, things, information, and places in the
global age.

• Gaseousness - Hyper-mobility of people, things, information, and places in the global

age.
 Different Kinds of Globalization
These try to answer the question: What is being globalized?

According to Arjun Appadurai (Anthropologist) Globalization occur at multiple and

intersecting dimensions of integration that he calls “scape”:

1. Ethnoscape – refers to global

movement of people
(tourists, immigrants, exiles,
refugees, guest workers).
2. Mediascape – about the flow of culture, refers to the electronic
and print media in "global cultural flows“.

3. Technoscape – refers to the circulation of mechanical goods and

software, the transmission of cultures through technology
4. Financescape – global circulation of money (fund transfer)

5. Ideoscape – realm where political ideas move around, is the movement

of political ideas from one area to another
- The ideas formed through the combination of the other four “scapes”.
 - Ideoscapes is the movement of ideologies. It is often political and usually has to do with the
ideologies of states and the counterideologies of movements explicitly oriented to capturing
state power or a piece of it. Ideoscapes are usually composed of ideas, terms, and images
including “freedom, welfare, rights, sovereignty, representation, and democracy”.
 We are the OBJECT or SUBJECT of globalization

- a process that increases either homogeneity or heterogeneity

Homogeneity –refers to the increasing sameness in the world as a

cultural inputs, economic factors and political orientations of societies
expand and create common practices, same economies, and similar
forms of government. This is often linked to cultural imperialism.
Does globalization mean we will
have one culture?
Heterogeneity – pertains to the creation of various cultural practices, new
economies and political groups because of the interactions of elements from different
societies in the world. It is associated with cultural hybridization, a more specific
concept is ‘glocalization’ coined by Roland Robertson in 1992.

Glocalization is the fusion of globalization and localization. Refers to the individual or

group, division, unit, organization and community which is willing to “think globally and
act locally”.
THEORIES OF GLOBALIZATION
 World System Theory
• CORE: rich & developed states
• PERIPHERY: poor & dependent states
• SEMI-PERIPHERY: the ‘in-between; semi-industrialised states
 Hyperglobalist

sees globalization as a legitimate process, a new age in human history. Countries

economies become interdependent as the nations sees themselves as less important.
Many individual countries become one global society.
 Modernization

all countries follow a similar path of development from a traditional to modern society.
Emphasis on international integration and the power of external forces to induce rapid
change.
 Skeptical

critical of globalization, considers today’s processes as more regionalized. Skeptics

don’t believe that the current economies are leading towards global capitalism.
 Dependency
was a reaction to a modern theory. A sociological theory which holds that economic
events in history have encourage countries to depend upon the support of core
advanced nations.
 Transformationalist

argues that globalization should be understood as a complex set of interconnecting

relationships through which power, for the most part, is exercised indirectly. They
suggest that the globalization process can be reversed, especially where it is negative
or, at the very least, that it can be controlled
 Network Society
- ”technologistic” approach to globalization or ”Age of information or “informationalism”
- digital connectivity and empowerment of the internet and the World Wide Web
- Generation Z or Gen Z (also known as iGeneration or iGen and Post-Millennials)

The concept of the network society is closely associated with interpretation of the
social implications of globalization and the role of electronic communications technologies
in society. The definition of a network society given by the foremost theorist of the concept,
Manuel Castells is that it is 'a society whose social structure is made up of networks powered
by micro-electronics-based information and communications technologies.'
 Globalization of World
Economics
https://www.weforum.org/agenda/2019/01/how-globalization-4-0-fits-into-the-history-of-globalization/
 ORIGIN AND HISTORY OF GLOBALIZATION
(according to GLOBALIZATION-George-Ritzer-Wiley-Blackwell-2019)

History of globalization is no easy matter, since there are a number of

different perspectives on these issues. Here’s five different ways of thinking
about what turn out to be very complex matters.

1. Hardwired - Basic “urge” for a better life: trade (or commerce), missionary
work (religion),
adventures, and conquest (politics and warfare).
2. Cycles - Globalization is a long‐term cyclical process. - it suggests that there
have been other global ages in the past and that what now appears to be a
new global age, or the high point of such an age
3. Phases - Eight great epochs, or “phases,” that have occurred sequentially,
each with its own point of origin.

a. Eurasian Phase (starting 3000 BCE)

b. Afro Eurasian Phase (starting 1000 BCE)
c. Oriental Phase I (starting 500 CE)
d. Oriental Phase II (starting 1100 CE)
e. Multicentric Phase (starting 1500 CE)
f. Euro‐Atlantic Phase (starting 1800 CE)
g. 20C Phase (starting 1950 CE)
h. 21C Phase (starting 2000 CE)

Phases-History of Globalization.docx
4. Events - A fourth view is that instead of cycles or great phases, one can point to much
more specific events that can be seen as the origin of globalization and give us a
good sense of its history. In fact, there are many such possible points of origin of
globalization

a. The Romans and their far‐ranging conquests in the centuries before Christ
(Gibbon 1998).
b. The spread of Islam in the seventh century and beyond.
c. The travels of the Vikings from Europe to Iceland, Greenland, and briefly North
America in the ninth through the eleventh centuries.
d. Trade in the Middle Ages throughout the Mediterranean.
e. The activities of the banks of the twelfth‐century Italian city‐states.
f. The rampage of the armies of Ghengis Khan into Eastern Europe in the
thirteenth century (Economist 2006a).
g. European traders like Marco Polo and his travels later in the thirteenth century
along the Silk Road to China. (Interestingly, there is now discussion of the
development of an “Iron Silk Road” involving a linked railroad network
through a variety of Asian countries that at least evokes the image of
the lure of Marco Polo's Silk Road.)
h. The “discovery of America” by Christopher Columbus in 1492. Other important
voyages of discovery during this time involved Vasco Da Gama
rounding the Cape of Good Hope in 1498 and the circumnavigation of
the globe by one of Ferdinand Magellan's ships ending in 1522
(Rosenthal 2007: 1237–1241).
 i. European colonialism, especially in the nineteenth century.
j. The early twentieth‐century global Spanish flu pandemic.
k. The two world wars in the first half of the twentieth century.

• 1956. The first transatlantic telephone cable.

• 1958. While it was possible to fly across the Atlantic in the 1930s on seaplanes, making
several stops along the way, the big revolution in this area was the arrival of
transatlantic passenger jet travel, with the first flight being Pan Am's from New York to
London (with a stopover for refueling in Newfoundland).
• 1962. The launch of the satellite Telstar, and soon thereafter the first transatlantic
television broadcasts.
• 1966. The transmission from a satellite of the picture of the earth as a single location,
which not only led to a greater sense of the world as one place (increased global
consciousness [Robertson and Inglis 2004: 38–49]), but was also of great importance to
the development of the global environmental movement.
• 1970. The creation of the Clearing House Interbank Payment System (CHIPS), making
global electronic (wire) transfers of funds (now $2 trillion a day) among financial
institutions possible.
• 1977. The establishment of the Society for Worldwide Interbank Financial
Telecommunications (SWIFT), making global transfers of funds by individuals much more
simple.
• 1988. The founding of the modern Internet, based on Arpanet (which was created in
1969). While it took the Internet several years to take off, this was a turning point in
global interconnection for billions of people.
• 2001. The terrorist attacks on the Twin Towers in New York and on the Pentagon in
Washington, as well as later terrorist attacks on trains in Madrid (March 11, 2004) and
London (July 7, 2005), among others. The following is a specific example in support of
the idea that 9/11 can be taken as a point of origin for globalization (at least of higher
education): “Since the terrorist attacks of September 11, 2001, internationalization has
moved high on the agenda at most universities, to prepare students for a globalized
world, and to help faculty members stay up‐to‐date in their disciplines” (Lewin 2008: 8).
• 2009. The shockwaves caused by the Great Recession as a result of the highly
interconnected global economy. Some of the many effects included changes to
global migration patterns, declines in global remittances, explosions in unemployment
and debt, and many battles over austerity measures – effects that continue to shape
globalization today.

• 2014. The expansion of cellular mobile phone subscriptions to approximately seven

billion, which is almost the number of humans on the planet (International
Telecommunication Union 2014). This suggests that we are now more interconnected
than ever before, even though many parts of the world still have limited access to
cellular networks.
When did globalization start? What were its major phases? And where is it
headed tomorrow?
• Spice Routes (7th-15th centuries)
• First wave of globalization (19th century-1914)
Second and third wave of globalization

• The story of globalization, however, was not over. The end of the World War II marked a
new beginning for the global economy. Under the leadership of a new hegemon, the
United States of America, and aided by the technologies of the Second Industrial
Revolution, like the car and the plane, global trade started to rise once again. At first,
this happened in two separate tracks, as the Iron Curtain divided the world into two
spheres of influence. But as of 1989, when the Iron Curtain fell, globalization became a
truly global phenomenon.

• Then, when the wall dividing East and West fell in Germany, and the Soviet Union
collapsed, globalization became an all-conquering force. The newly created World
Trade Organization (WTO) encouraged nations all over the world to enter into free-
trade agreements, and most of them did, including many newly independent ones. In
2001, even China, which for the better part of the 20th century had been a secluded,
agrarian economy, became a member of the WTO, and started to manufacture for
the world. In this “new” world, the US set the tone and led the way,
Globalization 4.0
• That brings us to today, when a new wave of globalization is once again upon us. In a
world increasingly dominated by two global powers, the US and China, the new frontier
of globalization is the cyber world. The digital economy, in its infancy during the third
wave of globalization, is now becoming a force to reckon with through e-commerce,
digital services, 3D printing. It is further enabled by artificial intelligence, but threatened
by cross-border hacking and cyberattacks.

• At the same time, a negative globalization is expanding too, through the global effect
of climate change. Pollution in one part of the world leads to extreme weather events
in another. And the cutting of forests in the few “green lungs” the world has left, like the
Amazon rainforest, has a further devastating effect on not just the world’s biodiversity,
but its capacity to cope with hazardous greenhouse gas emissions.
• Technological progress, like globalization, is something you can’t run away from, it
seems. But it is ever changing. So how will Globalization 4.0 evolve? We will have to
answer that question in the coming years.
• After the world wars, world leaders sought to create a global economic system that
would ensure longer-lasting global peace. They believed that one of the ways to
achieve this goal was to set up a global financial institution that would promote
interdependence and prosperity. In order to establish a new monetary order.
The Bretton Woods System
The BRETTON WOODS SYSTEM - The name comes from the location of the meeting
where the agreements were drawn up, Bretton Woods, New Hampshire. This meeting
took place in July 1944. The purpose of the Bretton Woods meeting was to set up a new
system of rules, regulations, and procedures for the major economies of the world to
ensure their economic stability.
Delegates at Bretton Woods agreed to create two financial institutions

1. International Bank for Reconstruction and Development (IBRD or World Bank) – to

be responsible for funding postwar reconstruction projects, it was at a time when
many of the world’s cities had been destroyed by war.

The first loans granted by the World Bank to the Philippines date back to 1958.
The World Bank lent 300 million dollars in 1987 and 200 million in 1988. Between 1989
and 1992, the World Bank lent the Philippines 1.3 billion dollars to finance structural
adjustment. (The US threatened to block these loans in the event that the Philippines
carried out its plan to close American military bases on its territory.)

Metro Manila (CNN Philippines, October 2) — International lender World Bank has
released a $496.25-million loan (around ₱27 billion) to support rehabilitation projects in
areas hit by Typhoon Ompong.
• The world Bank had a more long-term approach, its main goals revolve around the
eradication of poverty and it funded specific projects that helped them in their goals,
especially in poor countries.
An example of such is their investment in education since 1962 in developing
nations like Bangladesh, Chad and Afghanistan.

• The World Bank Group has set two goals for the world to achieve by 2030:
1. End extreme poverty by decreasing the percentage of people living on less than
$1.90 a day to no more than 3%
2. Promote shared prosperity by fostering the income growth of the bottom 40% for
every country

• The World Bank Group comprises five institutions managed by their member
countries.
• Established in 1944, the World Bank Group is headquartered in Washington, D.C. We
have more than 10,000 employees in more than 120 offices worldwide.
2. International Monetary Fund (IMF) – to be the global lender of last resort to prevent
individual countries from spiraling into credit crises. If economic growth in a country
slowed down because there was not enough money to stimulate the economy,
the IMF would step in.

The IMF’s main goal is to ensure the stability of the international monetary and
financial system. It helps resolve crises, and works with its member countries to promote
growth and alleviate poverty.

IMF has financially assisted Yemen with 93 million dollars on April 5, 2012 to
address its struggle with terrorism.
• How Does the IMF Achieve Its Goals

1. Surveillance. Each year, the IMF sends economists to each of its member countries to
analyze the country’s economic situation.
2. Financial Assistance.
3. Technical Assistance. The IMF provides technical assistance on fiscal and monetary policy,
regulatory procedures, tax policy, and collection of statistics, among other issues.
International Monetary Fund, 700 19th Street,
N.W., Washington, D.C. 20431
Neoliberalism and Its Discontent
• John Maynard Keynes -an early 20th-century British economist, known as the father of
Keynesian Economics.

• Keynesian Economics - an economic theory of total spending in the economy and its
effects on output and inflation, advocated increased government expenditures and
lower taxes to stimulate demand and pull the global economy out of the depression.
• The high point of global Keynesianism came in the mid 1940s to the early 1970s.
During this period, government poured money into their economies, allowing people
to purchase more goods an in this process increase demands for these products. As
demand increased, so did the process of these goods.

• In the 1970s however, the prices of oil rose, the result was the phenomenon called
stagflation (a combination of stagnant economic growth, high unemployment, and
high inflation), a phenomenon Keynesian economics could not have predicted.

• Milton Friedman and Friedrich Hayek, challenged Keynesian economics. What

emerged was a new form of economic thinking called NEOLIBERALISM.
• Neoliberalism - a policy model of social studies and economics that transfers
control of economic factors to the private sector from the public sector. Often
associated with laissez-faire economics, a policy that prescribes a minimal amount of
government interference in the economic issues of individuals and society.
• In the early 1970s, the prices of oil rose sharply as a result of the Organization of Arab
Petroleum Exporting Countries imposition of an embargo as a response to the
decision of the US and other countries to resupply the Israeli military with the needed
arms during the Yom Kippur War.

• Arab countries also used the embargo to stabilize their economies and growth. The
“oil embargo”(a prohibition of the trade of petroleum from one country to another)
affected the Western economies that were reliant on oil.

• To make matters worse the stock market crashed in 1973-1974 after the United states
stopped linking the dollar to gold effectively ending the Bretton Woods System. This
resulted to stagflation – decline in economic growth and employment (stagnation)
takes place alongside a sharp increase in process (inflation), something that Keynesian
economics failed to predict.
• Economists Milton Friedman used the economic turmoil to challenge Keynesian
economics. What emerged was a new form of economic thinking the critics
labeled neoliberalism.

• NEOLIBERALISM - its advocates, US Pres. Ronald Raegan, British Prime Minister

Margaret Thatcher, justified their reduction in government spending by comparing
national economies to households.

• From the 1980s onward, NEOLIBERALISM became the codified strategy of the United
States Treasury Department, The World Bank, The IMF and eventually the World Trade
Organization (WTO) – an organization founded in 1995 to continue the tariff reduction
under the GATT.
• The policies forwarded by WTO – GATT came to be called Washington Consensus.

• Washington Consensus - a set of economic policy recommendations for developing

countries, and Latin America in particular, that became popular during the 1980s. The
term Washington Consensus usually refers to the level of agreement between
the International Monetary Fund (IMF), World Bank, and U.S. Department of the
Treasury on those policy recommendations. All shared the view, typically
labelled neoliberal, that the operation of the free market and the reduction of state
involvement were crucial to development in the global South.
• General Agreement on Tariffs and Trade (GATT) was a legal agreement between
many countries, whose overall purpose was to promote international trade by
reducing or eliminating trade barriers such as tariffs or quotas. According to its
preamble, its purpose was the "substantial reduction of tariffs and other trade barriers
and the elimination of preferences, on a reciprocal and mutually advantageous
basis.“
• TRADE BARRIERS - are government policies which place restrictions on international
trade. Trade barriers can either make trade more difficult and expensive (tariff
barriers) or prevent trade completely (e.g. trade embargo). Trade barriers are
generally classified as

1. Tariffs (taxes on imported goods) and other import

charges
2. Quotas
3. Government Regulation - import licensing, customs
practices, standards, testing, labeling, and various types of certification
• GATT was signed by 23 nations in Geneva on 30 October 1947, and took effect on 1
January 1948. It remained in effect until the signature by 123 nations in Marrakesh
(Morocco) on 14 April 1994, of the Uruguay Round Agreements, which established
the World Trade Organization (WTO) on 1 January 1995. The WTO is a successor to
GATT, and the original GATT text (GATT 1947) is still in effect under the WTO framework,
subject to the modifications of GATT 1994.
• GATT, and its successor WTO, have successfully reduced tariffs.
• The World Trade Organization (WTO) is the only global international organization
dealing with the rules of trade between nations. At its heart are the WTO agreements,
negotiated and signed by the bulk of the world’s trading nations and ratified in their
parliaments. The goal is to help producers of goods and services, exporters, and
importers conduct their business.

• It is an organization for trade opening. It is a forum for governments to negotiate trade

agreements. It is a place for them to settle trade disputes. It operates a system of
trade rules. Essentially, the WTO is a place where member governments try to sort out
the trade problems they face with each other.
 Other Financial Institutions
• THE ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD)
club of the richest countries in the world, 35 member states as of 2016
some member states are Australia, UK, Switzerland, Turkey, Sweden,
Spain, New Zealand, Luxembourg provides governments a setting in
which to discuss, develop and perfect economic and social policy.
• THE ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES (OPEC)
a permanent, intergovernmental Organization, created at the Baghdad
Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi
Arabia and Venezuela. The five Founding Members were later joined
by ten other Members: Qatar; Indonesia – suspended its membership in
January 2009, reactivated it in January 2016, but decided to suspend it
again in November 2016; Libya; United Arab Emirates; Algeria;
Nigeria; Ecuador; Angola; Gabon; Equatorial Guinea; and Congo.

OPEC had its headquarters in Geneva, Switzerland, in the first five years of its
existence. This was moved to Vienna, Austria, on September 1, 1965.
• In accordance with its Statute, the mission of the Organization of the Petroleum
Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its
Member Countries and ensure the stabilization of oil markets in order to secure an
efficient, economic and regular supply of petroleum to consumers, a steady income
to producers and a fair return on capital for those investing in the petroleum industry.
THE EUROPEAN UNION
is a political and economic union of 28 members
states that are located primarily in Europe. It is a unified trade and monetary
body of 28 member countries. It eliminates all border controls between
members.
If you are
an EU
national, you
do not need
to show your
national ID
card or
passport whe
n you are
travelling
from one
border-free
Schengen EU
country to
another.
• THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
a treaty between the United States, Canada, and Mexico, which agrees to
remove trade barriers between them. Features of NAFTA include the
elimination of tariffs on imports and exports between the three countries.
The global financial crises and
the challenge to neoliberalism
• Neoliberalism came under significant strain during the global financial crisis of
2007 – 2008
Economic Globalization today
• Globalization remains an uneven process, with some countries, corporations and
individuals benefitting more than others.
• The series of trade talks under WTO have led to unprecedented reductions in tariffs
and other trade barriers but these processes have been unfair.

1. Developed countries are open protectionists.

2. The beneficiaries of global commerce have been mainly transnational
corporations (TNCs) and not governments, and they are more concerned
with profits than with assisting the social programs of the governments
hosting them.
3. Host countries, in turn, loosen tax laws, which prevents wages from rising,
while sacrificing social and environments programs that protect the
underprivileged members of the societies. All these, to lure in foreign
investors seeking high profit at lowest cost possible.

4. Governments weaken environmental laws to attract investors, creating

fatal consequences on their ecological balance and depleting them of
their finite resources (like oil, coal and minerals).
History of Global Market
Integration
• Agricultural Revolution – people learned
how to domesticate plants and animals
and led to major developments like
permanent settlements, trade networks
and population growth.
• Industrial Revolution – 1800s, new
economic tools, like steam engines,
manufacturing and mass
production, from working for their
family, people began working as
wage laborers and becoming
specialized in their skills.
• Capitalism and Socialism

Capitalism – system in which all natural resources and means of production are
privately owned. Emphasizes profit maximation and competition as the main drivers of
efficiency.

Socialism – property is owned by the government and allocated to all citizens,

not only to those with money to afford it. Emphasizes collective goals.
• The Information Revolution - describes current
economic, social and technological trends beyond the
Industrial Revolution. Development of technologies
(such as computers, digital communication, microchips)
in the second half of the 20th century that has
led to dramatic reduction in the cost of obtaining,
processing, storing,
and transmitting
information in all
forms (text,
graphics, audio,
video).
Global Corporations
How do global corporations function?
What constitutes a global corporation?
• The contemporary global corporation is simultaneously and commonly referred to either as a multinational
corporation & TNC0, a transnational corporation &TNC0, an international company, or a global company.

• International companies are importers and exporters, typically without investment outside of their home country

• multinational companies have investment in other countries, but do not have coordinated product o6erings in
each country. They are more focused on adapting their products and services to each individual local market.

• Global companies have invested in and are present in many countries. They typically market their products and
services to each individual local market.

• Transnational companies are more complex organizations which have invested in foreign operations, have a
central corporate facility but give decision-making, research and develop (R&D) and marketing powers to each
individual foreign market.
Why study global corporation
• business has become globalized. Economies and marketplaces around the world are
interconnected and more interdependent than ever before. Thanks, in part, to the
internet, the transfer of capital, goods, and services knows almost no boundaries. Even
the smallest companies are shipping goods from one country to another.

This level of integration requires professionals who are knowledgeable about multiple
cultures and able to apply this knowledge to selling products and promoting services
around the world.