UNIT-1 Historical Periods of Globalization

The Contemporary World *Prehistoric Period (10000 BCE-3500 BCE)

Globalization Contacts among

hunters and
- is the process in which people, ideas gatherers – who
and goods spread throughout the were spread around
world, spurring more interaction and the world – were
integration between the world's geographically
cultures, governments and economies limited.
- is about growing worldwide
*Pre-modern Period (3500 BCE- 1500 CE)
connectivity.
Invention of writing
Characteristics of Globalization
and the wheel were
1. It involves both the creation of new great social and
social networks and the multiplication technological boosts
of existing connections that cut across that moved
traditional, political, economic, cultural, globalization to a
and geographical boundaries. new level.
2. Globalization is reflected in the
*Early-modern Period (1500-1750)
expansion and the stretching of social
relations, activities, and connections. European Enlightenment project tried to
-The process of Emergence of gigantic achieve a universal
and virtually identical shopping malls in form of morality and
all continents to cater to consumers law. unlimited
who can afford commodities all over material
the world-including products whose accumulation.
various components were
manufactured in different countries.
This process is called social stretching. *Modern Period (1750-1970)
3. Globalization involves the
intensification and acceleration of social Innovations in transportation and
exchanges and activities. communication technology, population
4. Globalization processes do not occur explosion, and
merely or an objective, material level increase in migration
but they also involve the subjective and transformation
plane of human consciousness. in traditional social
patterns.
Historical Periods of Globalization

1. Prehistoric
2. Pre-modern
3. Early modern
4. Modern
5. Contemporary
*Contemporary Period (from 1970 to present) Political Issues that Surface in this Dimension

The creation, expansion, and acceleration of 1. The principle of state sovereignty

worldwide interdependencies occurred in a
dramatic way and it
was a kind of leap in
the history of
globalization.
2. Increasing impact of various
intergovernmental organization
3. Future shapes of regional and global
governance

Cultural Dimension

- This refers to the increase in the

amount of cultural flows across the
Dimensions of Globalization
globe. Cultural interconnections are at
Economic Dimension the foundations of contemporary
globalization
- This refers to the extensive - Cultural diversity often results
development of economic relations hybridization
across the globe as a result of - Individualism and consumerism which
technology and the enormous flow of are the dominant cultural
capital that has stimulated trade in both characteristics of our age and the drive
sources and goods for economic success stimulated by the
Major players in the current century’s global internet and other technological
economic order devices circulate much more easily than
they did in earlier periods.
1. Huge international corporations - Cultural diversity often results
(General Motors, Walmart, Mitsubishi) hybridization- a constructive interaction
2. International Economic Institutions process between global and local
(IMF, World Bank, The World Trade characteristics which is often visible in
Organization) food, music, dance, film, fashion, and
3. Trading Systems language.
- Media empires generated and directed
Major Sources of Economic Growth across
the extensive flow of culture. Examples
Countries:
of these are Yahoo, Google, Microsoft,
1. Property rights and Disney. Advertisement plays an
2. Regulatory institutions important role in this cultural flow by
3. Institutions for macro-economics featuring various celebrities in the
4. Stabilization television aside from transforming
5. Institutions for social influence newscast into entertainment shows.
6. Institutions for conflict management
Religious Dimension
Political Dimension

- This refers to an enlargement and

strengthening of political interrelations
across the globe
 - Religion is a personal or
institutionalized set of attitudes, beliefs,
and practices relating to or manifesting
faithful devotion to an acknowledged
ultimate reality or deity
- It is also portrayed as a defining
element in future conflicts. Whether
the root cause of a particular conflict or
merely a vehicle for the mobilization of
nationalist or ethnic passions, religion is
certainly central to much of the strife
currently taking place around the globe.
Roman Catholic Teaching of Globalization There
are eight (8) principles that summarize the
Roman Catholic Teachings:
1. Commitment to universal human rights
2. Commitment to the social nature of the
human person
3. Commitment to the common good
4. Solidarity (The principle of Solidarity
affirms that membership in the human
family means that all bear responsibility
for one another.)
5. Preferential option of the poor (In the
Theology of the Incarnation- Christ God
became poor for us so as to enrich us
by his poverty. The poor are susceptible
to the effects of environmental
irresponsibility because they live in
countries where cheap building
materials and cheap labor are readily
available. They regularly work in
farming, fishing, and forestry, areas
which suffer environmental damage).
6. Subsidiary (The Catholic Church teaches
that decisions should be made at the
lowest level in order to achieve the
common good.
7. Justice
8. Integral Humanism- is concerned with
whole person.
Ideological Dimension
- Ideology is a system of widely shared
ideas, beliefs, norms and values among
a group of people.
- Globalization is a social process of
intensifying global interdependence
while globalism is an ideology that gives
the concept of neo-liberal values and
meanings to globalization.
Major ideological claims of advocates of
globalism:
1. Globalization is about the liberalization
and global integration of markets.
2. Globalization is inevitable and
irreversible.
3. Nobody is in charge of globalization
4. Globalization benefits everyone
5. Globalization furthers the spread of
democracy in the world.
UNIT 2
GLOBAL ECONOMY
Learning Objectives
1. Define economic globalization
2. Explain the two major driving forces of
global economy
3. Differentiate economic globalization
from internationalization
4. Trace the origin of economic
globalization
Economic Globalization
- refers to the increasing
interdependence of world economies as
a result of the growing scale of cross-
border trade of commodities and
services, flow of international capital
and wide and rapid spread of
technologies.
- It reflects the continuing expansion and
mutual integration of market frontiers,
 and is an irreversible trend for the
economic development in the whole
world at the turn of the millennium
- It also refers to the movement of
people (labor)and knowledge
(technology) across international
borders.
- According to the International
Monetary Fund, economic globalization
is a historical process, the result of
human innovation and technological
progress.

2 Major Driving Forces for

Economic Globalization

1. The rapid growing of information in all

types of productive activities
2. Marketization - the act or process of
entering into, participating in, or
introducing a free market economy.

Dimensions of Economic
Globalization

1. The globalization of trade of goods and

services
2. The globalization of financial and capital
markets
3. The globalization of technology and
communication
4. The globalization of production

Economic Globalization vs
Internationalization

Economic globalization - is the growing

global integration not only of markets but also
of systems of finance, commerce,
communication, technology, and law that by
pass traditional national, cultural, ethnic, and
social boundaries.
Example of Internationalization:
Internationalization -
is a corporate strategy that
involves making products and
services as adaptable as
possible.

Evolution of the International

Monetary System

1. Evolution of International
Monetary System (IMS)

Monetary system during that time was

decentralized while market based and
money played a minor role in
international
trade in
contrast to
gold.
 Advantage
1870 – 1914

Major economic powers were on gold standards

but could not maintain it and failed because of
the Great
depression

1929 – 1933

730 representatives of 44 nations met at

Bretton Woods, United States to create a new
international monetary system called as the
Bretton Woods system, the aim of which is to
create a stabilized international currency
system and ensure a monetary stability for all
the nations

1944 – 1971

The floating exchange rate system, also known

as flexible exchange rate system was developed
that was
market based

1973
Disadvantage

International Trade &Trade Policies

International Trade

- the exchange of goods, services and X Some countries charge extra fee on the
capital across national borders shipped items – landed cost

X Language barrier
X Limited customer service and different time National Trade Policy
zones
This safeguards the best interest of its trade and
X Returning products and refund takes a longer citizen.
process
Bilateral Trade
X Changes in the government and their policies
Industry
causing delays
Regulate the trade and
International Trade business relations
Comparative Advantage - so long as the between two nations.
two countries have different
relative efficiencies, the two
countries can benefit from International Trade Policy
trade. Comparative
The best interests of both developed and
advantage holds that all
developing nations are upheld by the policies.
countries will always benefit from cooperation
and participation in free trade

Specialization - countries as well as Protectionism

individual businesses can maximize their
welfare by specializing in the production of
those goods where they are most efficient and
enjoy the largest advantages over rivals. It
happens if a country cannot efficiently produce
an item and obtain it by trading with another
country that can.
Trade Policies
- regulations and agreement of foreign
countries
- a defensive trade policy intended to
eliminate the possibility of foreign
competition.
Free Trade
- a largely theoretical policy under which
governments impose absolutely
no tariffs, taxes, or duties on imports, or
quotas on exports. For example,
the North American Free Trade
Agreement (NAFTA), between
the United States, Canada, and
Mexico is one of the best-
known FTAs.

Outsourcing

- A business practice in which services or

Focuses of Trade Policy in job functions are farmed out to a third
International Trade party

3 Essential Features of Modern

Types of Trade
Outsourcing Strategy
Policy
 1. Firms must search for partners with the
expertise that allows them to perform
the particular activities that are
required.
2. They must convince the potential
suppliers to customize products for
their own specific needs.
3. They must induce the necessary
relationship-specific investments in an
environment with incomplete
contracting.

Possible Determinants of the

Location of Outsourcing

1. Size of the country can affect the

“thickness” of its markets.
2. The technology for search affects the
cost and likelihood of finding a suitable
partner.
3. The technology for specializing
components determines the willingness
of a partner to undertake the needed
investment in a prototype.
4. The contracting environments can
impinge on a firm’s ability to induce a
partner to invest in the relationship