07a Session Vii-a The Extremes Of Globalization

Session VII-a The Extremes of Globalization, One Size Does Not Fit All 1

The Extremes of Globalization, One Size Does Not Fit All … AND POVERTY IS STILL WIDESPREAD … EAST ASIA LATIN AMERICA SOUTH ASIA SUB-SAHARAN AFRICA EASTERN EUROPE / CENTRAL ASIA 0

10

20

30

40

50

MERCHANDISE EXPORTS 1980

2000

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The Extremes of Globalization One Size Does Not Fit All … WHILE FOREIGN INVESTMENT HAS EXPANDED … EAST ASIA LATIN AMERICA SOUTH ASIA SUB-SAHARAN AFRICA EASTERN EUROPE / CENTRAL ASIA 0

15

30

BILLIONS OF DOLLARS

45

60

FOREGIN DIRECT INVESTMENT 1980

2000

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The Extremes of Globalization One Size Does Not Fit All … BUT GROWTH HAS BEEN UNEVEN … EAST ASIA LATIN AMERICA SOUTH ASIA SUB-SAHARAN AFRICA EASTERN EUROPE / CENTRAL ASIA -2.5 PERCENT

0

2.5

5.0

PERCENT AVERAGE ANNUAL GDP GROWTH 1980-90

7.5

1990-2000

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The Extremes of Globalization One Size Does Not Fit All EXPORTS HAVE SURGED FOR TWO DECADES … EAST ASIA LATIN AMERICA SOUTH ASIA SUB-SAHARAN AFRICA EASTERN EUROPE / CENTRAL ASIA 0

100 PERCENT

200

300 1990

400

500 2000

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General Environment: Key Trends and Events

Demographic – Aging population

– Rising affluence – Changes in ethnic composition – Geographic distribution of population – Greater disparities in income levels Page 6

General Environment: Key Trends and Events Sociocultural – More women in the workforce – Increase in temporary workers / migration – Greater concern for fitness – Greater concern for environment – Delays in family formation Page 7

General Environment: Key Trends and Events Political/Legal -

Tort reform – rule of law

-

Disabilities Acts

-

Deregulation of utility and other industries

-

Increases in state-mandated minimum wages

-

Taxation at local, state levels

-

More grass roots representation

-

Election as legitimate way to rule

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General Environment: Key Trends and Events Technological –

Genetic engineering

– Emergence of Internet technology – Computer Aided Design/Computer-Aided Manufacturing Systems – Research in man-made and exotic materials – Pollution/Global warming – Miniaturization of computing technologies – Wireless communications

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General Environment: Key Trends and Events Economic – Interest rates – Unemployment – Consumer Price Index – Trends in GDP – Changes in stock market valuations Page 10

General Environment: Key Trends and Events Global – Currency Exchange Rates – Emergence of the Indian and Chinese Economies – Trade Agreements among regional blocs, bilateral (e.g. NAFTA, EU, ASEAN) – WTO Agreement (leading to elimination of tariffs) Page 11

Emerging Socio-Cultural Issues in Asia-Pacific The World Today : Trends • Globalization • Ethical Issues • Workforce Diversity • Entrepreneurship • E-Business • Quality Management • Workspace Spirituality

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Emerging Socio-Cultural Issues in Asia-Pacific Today’s World  World is run by companies, not countries  All factors of production (including labour) are mobile  Borderless world  Value chain activities positioned where they are optimized (cheapest and best)  Transportation cost / time decreased Page 13

Emerging Socio-Cultural Issues in Asia-Pacific Today’s World  Opening of economies  Acceptance of free market economics  Deregulation, privatization

 Trade theories  Focus on benefits of trade  Integration / interdependence of world economy

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Emerging Socio-Cultural Issues in Asia-Pacific Communications Revolution  Internet  Satellite  Cellular telephones  Laptop computers  Video conferencing  Distance learning  24 hour world-wide news networks

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Emerging Socio-Cultural Issues in Asia-Pacific Advantages of Globalization  Free trade  Open capital markets  International migration  Optimal allocation of the world’s resources  Closer understanding between peoples  Exchange of information Page 16

Emerging Socio-Cultural Issues in Asia-Pacific Problems of Globalization  Decisions made in other countries impact lives  Workers threatened as companies shift production to low-wage economies  National cultures and identities under threat

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Emerging Socio-Cultural Issues in Asia-Pacific Factors Against a Global Approach  Customers demand products and services tailored to local needs  Global organizations are difficult to manage  Globalization can undercut unique competencies of foreign subsidiaries  Formation of regional trading blocs such as NAFTA and ASEAN Page 18

Emerging Socio-Cultural Issues in Asia-Pacific Problems People Have With Globalization  Most people feel threatened by globalization.  Globalization is too big, too overwhelming. They prefer not to think about it.  Treat globalization in the same way they do death, illness and war. They try not to think about it. Page 19

Emerging Socio-Cultural Issues in Asia-Pacific Ways to Get People to Think Globally  Don’t expect other people to act and feel the same as you do  Delay judgment until you have had time to look at an issue from multi-perspectives  Put yourself in the other person’s shoes

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Emerging Socio-Cultural Issues in Asia-Pacific Tolerance : CAVEAT  True tolerance comes from understanding  Tolerance never comes from ignorance  Unfortunately the notion of belonging to one country, one religion, one team leads to the preference for that country, religion and team and then to the idea that all others are inferior Page 21

Emerging Socio-Cultural Issues in Asia-Pacific Global Understanding  When you understand, you stop being afraid. When you stop being afraid, you stop worrying about protecting yourself.  When you are out to protect yourself, you perceive all actions, words, ideas and strangers as potential threats.

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Emerging Socio-Cultural Issues in Asia-Pacific Today’s World  Importance of Information  Economies of networking  Accuracy and updating of information  More difficult to sustain competitive advantages

 Rapid technological advances  New platforms for products and services  Acceleration of change  New business models

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Emerging Socio-Cultural Issues in Asia-Pacific Quality Management  Continual improvement and responding to customer needs and expectations  Customer – Anyone who interacts with the organization’s product or service  Common belief :  But : Quality repair of product)

Cost

Productivity

Cost (due to reject and Page 24

Emerging Socio-Cultural Issues in Asia-Pacific Workspace Spirituality  Employees want meaningful work which can contribute to the society  Strong Sense of Purpose – instead of just earning money  Individual Development – not just work, but also grow and learn  Toleration of Employee Expression – allow employees to express their feeling and mood Page 25 without fear of being fired

Emerging Socio-Cultural Issues in Asia-Pacific “New Rules” for Corporate Survival  Outsourcing  Innovation  Cost Leadership  Focus  Product Differentiation Page 26

Emerging Socio-Cultural Issues in Asia-Pacific Rules for Today’s Enterprises  Diverse markets o Consumer needs, while converging, are still very local o Variables: culture, wealth, income distribution, geography, “history matters”

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Emerging Socio-Cultural Issues in Asia-Pacific Rules for Today’s Enterprises  Must adapt and be agile  Understand where the value is for the consumer o Are the new services profitable ?

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Emerging Socio-Cultural Issues in Asia-Pacific Rules for Today’s Enterprises  Human Resource Management o

Employees as most important resource, not just a cost

o

New diverse, intercultural workforce

o

Stakeholder view

o

Employee / employer bonds stronger Page 29

Emerging Socio-Cultural Issues in Asia-Pacific Rules for Today’s Enterprises  Building on relationships, philosophy of partnership. “Their problem is our problem.” o

Customers

… but also o

Suppliers

o

Clients

o

General Community

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Emerging Socio-Cultural Issues in Asia-Pacific Rules for Today’s Enterprises  Communication o

Distance no longer a factor

o

Across languages

o

Across culture

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Emerging Socio-Cultural Issues in Asia-Pacific 10 years ahead …... International Trade Unions growing  E.g. NAFTA, EU  Africa ? Asia ? …Inter-union relations ?  Leads to stability

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Emerging Socio-Cultural Issues in Asia-Pacific 10 years ahead …... Economies Opening  Interdependance  Leads to stability

 Wealth distribution  Will someone get left behind ?? Consequences ? Page 33

Emerging Socio-Cultural Issues in Asia-Pacific 10 years ahead …...  Developing world vis-à-vis developed world …  Living standards  Cultures, expectations

 Developing countries may overtake the modern developed countries  Increased cultural migration / mixing Page 34

Emerging Socio-Cultural Issues in Asia-Pacific The years ahead …...  China’s Socialist experiment …  Great importance for other countries; India, Russia, Africa, South America

 Arab countries  Wealth extracting exports …  Consequences …  Iraq experiment; where will it lead ? •Terrorism

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Emerging Socio-Cultural Issues in Asia-Pacific The years ahead …...  General depletion of scarce resources  Breakdown of world environmental treaties ? Enforcement ?  Regulation difficulities (internationally)

 Synthetic (GM) substitution  Raw materials no longer geographically based

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Emerging Socio-Cultural Issues in Asia-Pacific The years ahead …...  Continual connection to Internet (information network)  Instant data flow- no need for storage devices  PC devices simplified •Must solve screen problem  Car fuelElectric, Hydrogen Cells …

 Suppliers ? Not georgraphically dependent

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Emerging Socio-Cultural Issues in Asia-Pacific The years ahead …...  Convergence of International Laws  Out of necessity- discrepancies cause transaction costs- HUGE DISINCENTIVE

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