Rizal Technological University Globalization as Defined by Other

College of Business Entrepreneurship Authors

and Accountancy 1. Martin Albrow and Elizabeth
Monday & Thursday 7:30 AM - 9:00 AM King defined globalization as
those processes by which the
Module No. 1 people of the world are
Objectives: incorporated into a single world
At the end of the lesson, the society.
students should be able to: 2. Anthony Giddens defines
● Make a clear definition of globalization as the intensification
globalization; of worldwide social relations which
● Differentiate the competing link distant localities.
conceptions of globalization; 3. Roland Robertson described
● Understand the importance of globalization as the compression
studying globalization for of the world and the intensification
everyone; and, of the consciousness of the world
● Identify the underlying as a whole.
philosophies of the varying
definitions of globalization. Historical Foundation of The Term
"Globalization"
Topic: The Study of Globalization 1820s
● The large-scale globalization
Definition of Globalization began.
There are many varying definitions 1897
of the term globalization. One definition of ● Charles Taze Russell coined a
it is the increasing interaction of people, related term "corporate giants" to
states, or countries through the growth of describe large national trusts and
the international flow of money, ideas, and enterprises of the time.
culture. 1930
Globalization also involves the ● The word "globalize" appeared in
interconnectedness of people and a publication entitled Towards New
businesses worldwide, leading to global, Education.
cultural, political, and economic Late 1970s and 2013
integration. ● The word "globalization" was
Another definition of globalization coined, and later on used to mean
is the ability to move and communicate "borderless society" in 2013.
easily in order to do business Early 1981
internationally, as well as the seamless ● The term "globalization" has been
exchange of goods, services, and people used in its economic sense.
across the world. Half of the 1980s
Moreover, globalization involves ● Theodore Levitt popularized the
countries liberalizing their policies to term "globalization" in the
welcome foreign investment and business world.
attracting global capital by opening up Late 19th Century and early 20th Century
their economies to multinational ● The connectivity of the world's
corporations. economies and cultures grew very
quickly.

The Contemporary World: The Study of Globalization Page 1 of 6

2000
● The International Monetary Fund
(IMF) identified four (4) basic
aspects of globalization: (1) trade
and transactions; (2) capital and
investment movements; (3)
migration of knowledge, and (4)
dissemination
Indicators of Globalization
In today's generation life has
become easier, technology evolves and
develops every minute, and keeps on
improving to provide better services to
everyone. All of these improvements that
we enjoy today are the fruit of what we
called “Globalization" which is commonly
subdivided by academic literature into
three major areas namely;
1. Economic Globalization - the
pervasive cross-border flow of
goods, services, capital,
technology, and labor help define
economic globalization.
2. Cultural Organization - refers to
the transmission of ideas and
values between countries.
3. Political Globalization - often
referred to as multilateralism and
involves the creation of multilateral
organizations such as the United
Nations (UN) and World Trade
Organization (WTO).
Nature of Globalization
Globalization is a conglomerate of
various multiple units that draw upon a
common pool of resources, including
money, credit, information, patents, trade
names, and control systems.
These units respond to a common
strategy and have a global product
presence, diverse human resources, and
engage in transactions involving
intellectual properties
Dimensions of Globalization
The Contemporary World: The Study of Globalization
The dimensions of globalization
are the following:
1. Expanding business globally.
2. Shifting from a domestic to a
global business perspective.
3. Placing production and physical
facilities based on global
dynamics, disregarding national
consideration.
4. Developing product and
production plans for a global
market.
5. Sourcing production factors like
materials, technology, and finance
from the best sources anywhere in
the world.
6. Global orientation or
organization structure and
management culture.
Reasons for Globalization
The World Trade Organization
(WTO) is an organization that encourages
“cross border trade” to globally expand.
As there is a rapid decrease of time and
distance across the globe, domestic
markets are no longer rich, so companies
and institutions go global to find political
and economic stability which is good for
other countries than the country of origin.
Furthermore, due to the technological and
managerial expertise of other countries,
advancement tools of communication and
information reduces high transportation
costs which enables the country of origin
to be close to raw materials and market
their finished products.
Stages of Globalization
There are five (5) stages of
globalization:
1. Domestic company/institution
collaborate with local dealers and
distributors to move and reach
overseas market;
2. The company/institution takes
over these activities on its own;
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 3. The domestic-based company
institution begins to carry out its
own manufacturing marketing and
sales in key foreign market;
4. Company/institution moves to full
insider position supported by
complete business system,
however, headquarters mentality
continues to dominate and;
5. The company/institution moves
towards a global mode of
operation where global localization
happens where the company
serves local customers in markets
around the globe responding to
their needs.
Merits of globalization
What can a company or an
institution get from globalization? There
are eight (8) merits or advantages.
1. Global competition and imports
keep costs under control, making
inflation less likely to disrupt
economic progress.
2. An open economy promotes rapid
innovation by bringing in new
ideas from other countries.
3. Export jobs often pay more than
other jobs.
4. The free movement of capital
keeps interest rates low.
5. Living standards go up faster.
6. Productivity grows more quickly
when countries produce goods
and services in which they are of
comparative advantage.
7. Countries liberalize their visa rules
and procedures so as to permit
the full flow of people from country
to country.
8. It results in freeing up the
unproductive sector to investment
and the productive sector to export
related activities resulting in a
win-win situation for the world
economy.
The Contemporary World: The Study of Globalization
Demerits of globalization
Globalization also has its
disadvantages or demerits. Among these
are:
1. Several people lose their jobs
when companies import cheap
labor or materials or shift
production abroad.
2. Workers face pay cut demands
from employers who often
threaten to export jobs.
3. Unregulated globalization can
cause serious problems to poor
and developing countries in terms
of labor force, wages, benefits, job
termination, and others.
4. High foreign shares on industries
where they are not needed could
affect the economic growth of
domestic enterprise.
5. Sovereignty of a country and
company/institution may be in
danger of being lost.
Importance  of Studying Globalization
In today’s contemporary world, it is
important to know the importance of
studying globalization. One of the reasons
for this is the need for individuals skilled in
collaborating with people from diverse
cultures and nations. There is also a
demand to promote our local businesses
to other countries, often requiring owners
to travel abroad independently for
effective promotion.
Our modern world also faces
global challenges which require
interdisciplinary collaboration, gathering
and sharing information across disciplines
and institutions on a global scale. Setting
up meaningful global relationships is one
of the crucial benefits of globalization,
particularly for aspiring future leaders
aiming for effective international
connections.
Knowledge of the merits, demerits
and reasons for globalization will enable
the students to work as a model of
Page 3 of 6
collaborative international team in the
near future along the areas of business,
education, health, science, arts,
engineering, hotel industries, etc., and
discuss best products in these areas.
Importance of Globalization for
Everyone
The following are the importance
of globalization for everyone:
● Globalization is the expansion of
local economies and businesses
into a broader international
marketplace, according to Neil
Kokemuller.
● The internet revolutionized the
business arena as it created a
whole new virtual marketplace that
expands beyond physical and
geographical boundaries.
● Globalization is also important for
the development of business,
industry and income levels in
several large populations.
Competition
Businesses do not have a choice
but to compete globally. Moreover, with
the influx of foreign competitors, the
companies’ possibility of surviving and
succeeding domestically has decreased.
Diverse Population
The world has become more
diverse and business trends often mirror
broader societal trends. Since people
move to different parts of the world, they
spread different ideas, perspectives,
traditions, and customs.
The Theory of Comparative
Advantages
This theory states that countries
that are good at producing particular
goods are better off exporting it to
countries that are less efficient at
producing that good. The main point here
is not all countries are good at producing
The Contemporary World: The Study of Globalization
all sorts of goods so other countries turn
to one's advantage by trading with each
other.
Philosophy Underlying Globalization
This new not-yet established era
of globalization poses multiple challenges,
in which there is room for novel
theoretical paradigms.
1. Up until the very end of the 20th
century, the concept of
globalization was mostly unknown
to us, and only recently has it
been acknowledged and adopted.
2. Because the idea of
"Globalization" has given rise to
numerous definitions of the same,
we use "International" rather than
"Global" when discussing global
issues.
3. Some people Associate
globalization with progress, wealth
and peace, some others think that
it can cause negative effects like,
retro regression, disaster and
decay.
4. Globalization is typically defined
as "a process of economic, social,
cultural, and political activity that
transcends nation-state borders
and affects the entire world"
5. Globalization is a controversial
process of building the world as
whole, global institutional
structures and global cultural
forms like the free market.
6. At some point, Globalization can
cause a violence and destructive
public demonstrations.
Based on the above texts,
globalization is the free movement of
goods, services and people across the
world. Globalization can be thought of to
be the result of the opening up of the
global economy.
The point here is that globalization
has had a positive and negative effect
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which is why it needs a deep approach in Statement I: To find political and
discussing the concept. economic stability that benefits other
One thing is certain. countries more than the country of origin.
GLOBALIZATION is here to stay so it is Statement II: Rapid decrease of time and
better for the countries in the global distance across the globe.
economy to embrace and live with it in Statement III: To reduce high
this contemporary world. transportation costs via advanced tools of
communication and information.
Statement IV: To get technological and
ACTIVITY: MULTIPLE CHOICE managerial know-how of other countries.
Directions: Encircle the letter of best a. Statement I, III, IV only
answer. b. Statement II only
1. This person defined globalization c. Statement II, III only
as the compression of the world d. All Statement
and the intensification of the 5. Company X linked up with local
consciousness of the world as a businesses for them to enter the
whole. market overseas. What stage of
a. Martin Albrow globalization is the situation
b. Roland Robertson referring to?
c. Anthony Giddens a. Stage 2
d. Elizabeth King b. Stage 1
2. Which of the following is a major c. Stage 4
area into which "Globalization" is d. Stage 3
commonly subdivided by 6. Company A branches out to the
academic literature? Philippines and is able to adapt to
a. Environmental the local culture and serve the
globalization local customers based on their
b. Technological globalization wants and needs. What stage of
c. Economic globalization globalization is the situation
d. Linguistic globalization referring to?
3. Which of the following is NOT one a. Stage 4
of the dimensions of globalization b. Stage 2
mentioned in the text? c. Stage 5
a. Expanding business d. Stage 3
domestically. 7. In what way is globalization a
b. Developing product and merit in the field of
production plans for a entrepreneurship?
global market. a. Expert jobs often pay more
c. Sourcing production than other jobs.
factors from the best b. Living standards go up
sources worldwide. faster.
d. Shifting from a domestic to c. The free movement of
a global business capital keeps interest rates
perspective. low.
4. There are a lot of reasons why d. Countries liberalize their
globalization exists. With that, visa rules and procedures
which of the following statements so as to permit the full flow
are true?

The Contemporary World: The Study of Globalization Page 5 of 6

 of people from country to
country.
8. Which of the following is a demerit
of globalization to workers?
a. Workers face pay cut
demands from employers
who often threaten to
export jobs.
b. High foreign shares on
industries where they are
not needed could affect the
economic growth of
domestic enterprise.
c. Sovereignty of a country
and company/institution
may be in danger of being
lost.
d. Unregulated globalization
can cause serious
problems to poor and
developing countries in
terms of labor force,
wages, benefits, job
termination, and others.
9. What country is better for
exporting to other countries?
a. Countries that are good at
producing particular goods
b. Countries that are less
efficient at producing
products
c. Countries that involved in
conflicts and human rights
violations
d. Countries lacking of
infrastructure
10. Which of the following is not
included in the recent spread of
globalization?
a. Cultural
b. Social
c. Economic
d. Global

The Contemporary World: The Study of Globalization Page 6 of 6