Introduction to the Study of Globalization

At the end of this module, you are expected t0:

1. Differentiate the competing conceptions of globalization
2. Identify the underlying philosophies of the varying definitions of globalization
3. Agree on a working definition of globalization for the course and recognize
the history of our Global Economy
4. Identify the Effects of Globalization

Introduction to the Study of Globalization

We live in a world that is interconnected by a confusing range of complex
economic transactions, social and environmental problems, and international
political collaborations and conflicts. We are bombarded with global economic
news every day. A decision by American policymakers to subsidize the production
of ethanol, a form of gasoline containing an additive produced from corn, is seen
by many as a key reason that grain prices are higher around the world. The
emergence of China as a major exporter of manufactured goods affected wages in
both rich and poor nations.

Definition of Globalization
Globalization, according to sociologists, is an ongoing process that involves
interconnected changes in the economic, cultural, social, and political spheres of
society. As a process, it involves the ever- increasing integration of these aspects
between nations, regions, communities, and even seemingly isolated places.

In terms of the economy, globalization refers to the expansion of capitalism to

include all places around the world into one globally integrated economic system.

Culturally, it refers to the global spread and integration of ideas, values, norms,
behaviors, and ways of life. Politically, it refers to the development of forms of
governance that operate at the global scale, whose policies and rules cooperative
nations are expected to abide. These three core aspects of globalization are fueled
by technological development, the global integration of communication
technologies, and the global distribution of media.

Every day, we wear clothes that labeled, “made in China”. Cars that have parts
that were manufactured in all parts of the world. When you go to a grocery store,
there are grapes that were grown in Chile, sugar that is 50% off from Jamaica, and
curry from India. When I was young, in order to have an imported item, you need
to go to that country. But now, because of globalization, you can easily avail
imported products in a cheaper price, all of these are because of globalization. In

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Introduction to the Study of Globalization

this lesson, you will learn the meaning of globalization, some of its positive and
negative effects, and some real examples of globalization.

While browsing your TV channels you may stop at the various shopping
channels, and in your brief stop ,you may view a panel discussing globalization in
the marketplace. Even in the news, there is always a story that discusses the
economic sequence of globalization. Globalization is the opening of local and
nationalistic perspectives to a broader outlook of an interconnected and inter-
dependent world with free transfer of capital, goods, and services across national
frontiers.

The History of Our Global Economy

Some sociologists, like William I. Robinson, frame globalization as a process that

began with the creation of the capitalist economy, which formed connections
between distant regions of the world as far back as the Middle Ages. In fact,
Robinson has argued that because a capitalist economy is premised on growth and
expansion, a globalized economy is the inevitable result of capitalism. From the
earliest phases of capitalism onward, European colonial and imperial powers, and
later U.S.

imperialism, created global economic, political, cultural, and social connections

around the world.

But despite this, up until the mid-twentieth century, the world economy was
actually a compilation of competing and cooperating national economies. Trade
was inter-national rather than global. From the mid-twentieth century on, the
process of globalization intensified and quickened as national trade, production,
and finance regulations were dismantled, and international economic and political
agreements were forged in order to produce a global economy premised on the
“free” movement of money and corporations.

Effects of Globalization
Globalization has both positive and negative effects. On an individual level,
globalization affects both the standard of life and the quality of life. On a business
level, globalization affects an organization's product life cycle and an
organization's balance sheet. Globalization also affects how governments
throughout the world create policies affecting areas such as monetary regulation
and trade.
 Individual Effects
On an individual level, globalization has affected the standard of life and quality
of life of individuals and families throughout the world. Standard of living is the
level wealth, comfort, material goods, and necessities available to a certain
socioeconomic class in a certain geographic area. Quality of life is the degree to
which a person enjoys the important possibilities of his or her life. In many
instances, quality of life has improved for those who live in developing nations.
For many developing nations, globalization has led to an improvement in standard
of living through improved roads and transportation, improved health care, and
improved education due to the global expansion of corporations. However,
globalization has had a negative effect on ind ividuals who live in developed
nations. This is due to the fact that corporations now have the option of
establishing manufacturing operations in nations where manufacturing and
production costs are less expensive. As a result, many manufacturing jobs leave
developed nations and move to developing nations.

Corporate Effects
On a corporate level, globalization has had an effect on organizations' product or
service life cycle. Product life cycle is the period of time over which an item is
developed, brought to market and eventually removed from the world market.
One such example of globalization having a positive effect on a product's life
cycle would be the Kinder Egg. Kinder Eggs are egged-shaped chocolate candies
with tiny toys inside and are very popular with children. However, due to the fact
that the tiny toys may be a choking hazard for children, the United States banned
the sale of these candies. However, due to globalization, the Kinder Egg is still a
popular candy sold in Canada and several countries throughout Europe.

Negative Corporate Effects

Many companies offer their services globally to expand their market, or they use
services from overseas to decrease their costs. Outsourcing services, decrease in
wages, workers’ rights and interdependent economy are some of the negative
effects of globalization on companies.

Outsourcing Work

Foreign workforce offers cheaper labor for many service-related positions, but the
control of quality of service, shipping expenses and time delays can have hidden
costs. A company considering outsourcing a service needs to look at all related
expenses and possible problems from having it done overseas. Shipping products
overseas, delays in information or financial reporting can reduce any financial
savings.

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Introduction to the Study of Globalization

Service jobs, such as information technology, manufacturing, education,

accounting, and software development are being lost in developing countries, such
as the United States and Europe, to lower paying emerging countries, such as India
and China. Outsourcing work that was an internal function may help minimize
company expenses. However, the quality of the work can suffer and potentially
create more expenses because of the language barriers.

Decrease in Wages

Many jobs performed in emerging countries for less cause a decrease in the wages
offered in developing countries. As wages decrease for positions that paid more
the workers will feel less appreciated and put forth less effort in their job. In
emerging countries where there are minimal wage labor laws, the competit ion for
outsourced work will drive down wages for the workers. When companies stop
seeing their personnel as a business investment they create long-term problems for
a short-term savings.

Workers’ Rights
In some emerging countries, labor laws that protect workers from exploitation and
mistreatment are almost non-existent. This could harm the image of a company
that outsources services from a foreign company that exploits children or the
rights of their workers. A company’s public reputation in how it treats its
employees, even if they are overseas, can cause a loss in customer support of
products.
 Figure 1. Effects of Globalization

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Introduction to the Study of Globalization

References and Supplementary Materials

Books and Journals
1. Manfred Steger, Paul Battersby, and Joseph M. Siracusa; ed.2014; The SAGE Handbook of
Globalization. Two vols. Thousand Oaks: SAGE;
2. Chapter 2 of Textbook: “Approaches to the Study of Globalization “ by Manfred B. Steger.
3. Manfred Steger, “Ideologies of Globalization .” 2005. Journal of Political Ideologies
10(1):11-30

Online Supplementary Reading Materials

1. https://study.com/academy/lesson/what- is-globalization-definition-effects-examples.html

2. "N2Growth"; The Impact of Globalization on Business; Mike Myatt; May 2010, The
Kansas State Collegia

3. https://study.com/academy/lesson/zero-population- growth-definition-countries.html

4. https://www.thoughtco.com/globalization-definition-3026071