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TRAVEL EXECUTIVES’ PERCEPTIONS ON THE IMPACT OF GLOBALIZATION ON CONTEMPORARY BUSINESS Dr. J. Mark Munoz Asst. Professor, International Business, Millikin University 1184 West Main St., Decatur, IL 62522 USA Tel No : (217) – 420-6762 E-mail : [email protected] Dr. Marios Katsioloudes Professor of Management, St. Joseph’s University Philadelphia, PA 19131 Tel No : (610) –660-1117 E-mail : [email protected] Mr. Rory Barr Student Researcher, Millikin University 1184 West Main St., Decatur, IL 62522 USA Tel No : (217) – 420-6762 E-mail : [email protected]

ABSTRACT Business today is no longer as restrictive and as compartmentalized as it was in the past years. Where the consumer of the past used to associate product quality with the country in which it was manufactured, this “quality stereotype” is no longer used. National boundaries no longer curtail the efficiency and speed of business transactions. The world has become a global marketplace. With globalization, business between nations of the world has grown and increased, such that money flows rapidly in and out of nations, creating a situation in which the countries of the world are highly interdependent on each other economically and politically (Greenberg and Baron, 1997). A number of factors account for this event. First, technology has drastically lowered the cost of transportation and communication, thereby enhancing opportunities for international commerce. Second, laws regulating trade has generally become less restrictive throughout the world. Third, developing nations have sought to expand their economies by promoting exports and opening their doors to foreign companies seeking investments. This trend has expanded opportunities for economic growth and competition throughout the world (Greenberg and Baron, 1997). In the light of the changes taking place in business and industry, the researchers explored potential influences brought about by globalization. Specifically, the study sought to determine the impact of globalization on contemporary business as perceived by the travel executives and members of the Pacific Asia Travel Association in the context of the following theories advanced by Thomas L. Friedman: (1) That in our present era, the way we do business is far different compared to the period prior to the Cold War era; (2) That there has been a marked change in the

way one communicates with others; (3) That there has been a dramatic change in the investment approaches of individuals; (4) That technology has paved the way for changes in the business environment; and (5) That countries need to implement strategic measures when coping in a global environment. The travel executives were singled out in the study for reasons of linguistic congruency, since the travel executives were proficient in English. Perspective was a factor because the travel executives had very likely traveled to many parts of the world. Multicultural exposure was another factor because the travel executives had likely been in contact with several races and cultures. Cross-involvement was taken into account because the travel executives had been involved in multifarious activities and transactions with diverse people from numerous sectors. Lastly, technological aptitude was considered because due to the nature of the work they performed, the travel executives were familiar and updated with advances in technology. INTRODUCTION Business today is no longer as restrictive and as compartmentalized as it was in the past years. Where the consumer of the past used to associate product quality with the country in which it was manufactured, this “quality stereotype” is no longer used. It is no longer meaningful to refer to an “American product,” a “German product” or a “Japanese product” (Hill, 1994:6). National boundaries no longer curtail the efficiency and speed of business transactions. The world has become a global marketplace. In the global business environment, diversity predominates. Consequently, the recruitment of employees is no longer confined to national borders. The concept of diversity of the workforce is now emerging. Rice (1994:78) declares that the management of diversity has been linked to such benefits as improved productivity and lower employee turnover and other costs related to human resources. On the part of management, international human resource management practices and activities have become important. A strategic approach requires understanding and working with differences to gain from each employee (Wright and Noe, 1996:245). The concept of global competitiveness becomes more understandable and more meaningful in today’s business transactions and production of goods and services. No longer is there an exclusive claim to quality because in a global environment, no country has a monopoly of excellence in production. Likewise, a single norm is applied for judging the quality of consumer products. The globalization of markets is taking place; along the same line, the phenomenon of globalization of production is the by-word of manufacturing. Regarding the globalization of markets and production, Hill (1994:5-6) observes: “With regard to the globalization of markets, it has been agreed that we are moving away from an economic system in which national markets are distinct entities, isolated from each other by trade barriers and barriers of distance, time and culture, and toward a system in which national markets are moving into one huge global marketplace. According to this view, the tastes and preferences of consumers indifferent nations are beginning to converge on some global norm.” Hill (1994:6) adds that in connection with the globalization of production, it has been observed that increasingly, individual firms are dispersing parts of their production process to various locations around the globe to take advantage of national differences in the cost and quality of such production factors as labor, energy, land, and capital. As a result, the demand for highly-skilled workers has accelerated. Concomitant to the globalization of markets and of production is the increasingly global competitiveness that has brought about changes in the management of quality. Increasing global competition and the uniformity of quality of specifications even with the diversity of production sites have given rise to emphasis on quality and continuous improvement (Bartol and Martin,

1998:30). This program is known as total quality management (TQM), a management philosophy that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational process (Robbins, 1998:15). With globalization, business between nations of the world has grown and increased, such that money flows rapidly in and out of nations, creating a situation in which the countries of the world are highly interdependent on each other economically and politically (Greenberg and Baron, 1997:37 Globalization definitely has an impact on people with different types of business pursuits. It is a challenge to the resourcefulness, initiative and creativity of the contemporary business person. In the organizational aspect, globalization has caused many business and industrial firms to be competitive in global markets. At the same time many organizations have been termed “hollow corporations” or firms that contract out most of its manufacturing (Stahl, 1995:74). It is clear that today’s organization has discarded bureaucracy in favor of networking. In the light of changes taking place in business and industry, the researchers sought to find answers to many basic questions on how much globalization has changed the economic situation of the world and what impact it has on contemporary business as perceived by a number of travel executives throughout the world. For this purpose, this study is conducted. THEORETICAL FRAMEWORK In order to acquire a definite sense of direction in conducting this study, the researchers review the literature on globalization and discuss the implications in the section entitled the Changing Global Landscape. The framework of this study is based on the theory of Pulitzer Prize winner Thomas L. Friedman. Friedman (2000:31-33) uses the analogy of the Lexus and the olive tree. The Lexus represents a fundamental, age-old human drive - - the drive for sustenance, improvement, prosperity and modernization - - as it is played out in today’s global system. The Lexus represents all the burgeoning global markets, financial institutions, and computer technologies with which we pursue higher living standards today. The olive tree represents everything that roots us, anchors us, identifies us, and locates us in this world - - whether it be belonging to a family, a community, a tribe, a nation, a religion, or most of all, a place called home. It makes one a complete person because it identifies a person linguistically, geographically and historically. Friedman’s main theme is the triumph of the Lexus over the olive tree. This victory is known as globalization. Friedman (2000:9) defines globalization as the inexorable integration of markets, nationstates and technologies to a degree never witnessed before - - in a way that is enabling individuals to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper, cheaper than ever before. Friedman further explains that the driving idea behind globalization is free-market capitalism - - the more one lets the market forces rule, and the more one opens the economy to free trade and competition, the more efficient and flourishing one’s company will be. Globalization means the spread of free market capitalism to virtually every country in the world. Therefore, globalization also has its own set of economic rules - - rules that revolve around opening, deregulating and privatizing one’s company in order to make it more competitive and attractive to foreign investment.

CHANGING GLOBAL LANDSCAPE Friedman (2000) advances that globalization has five features: (1) In our present era, the way we do business is far different compared to the period prior to the Cold War era; (2) There has been a marked change in the way one communicates with others; (3) There has been a dramatic change in the investment approaches of individuals; (4) Technology has paved the way for changes in the business environment; and (5) Countries need to implement strategic measures when coping with a globalizing world.

Global Business Globalization is characterized by a kind of business in which changing competitive structures are paralleled by shifts in demand characteristics in markets throughout the world. Cateora and Graham (1999:2) declare that with the increasing globalization of markets, companies find that they are unavoidably enmeshed with foreign customers, competitors and suppliers, even within their own borders. Furthermore, many companies are now seeking foreign markets. Companies with existing foreign operations realize that they must be more competitive to succeed against foreign multinationals. They have found it necessary to spend more money and time improving their marketing positions because competition for these growing markets is intensifying. Cateora and Graham theorize that an outstanding feature of global business is the global marketing aspect. In global marketing, companies treat the world, including their home market, as one market. In contrast to the multinational or international market that views the world as a series of country markets (including their home market) with unique set of market characteristics for which marketing strategies must be developed, a global economy develops a global strategy to reflect the existing commonalities of market needs among many countries to maximize returns through global standardization of its business activities - - whenever it is cost effective and culturally possible. Furthermore, as Cateora and Graham (1999:22) expound it, the global marketing concept views an entire set of country markets (whether the home market and only one other, or the home market and 100 other countries) as a unit, identifying groups of prospective buyers with similar needs as a global segment and developing a marketing plan that strives for standardization wherever it is cost and culturally effective. This might mean a company’s global marketing plan has a standardized product but country-specific advertising agenda. Changes in Communication Consciousness of cultural diversity and the language of international business have made changes in the way in which people communicate with one another. A common global strategy entails the adaptation of advertising messages to suit local markets. This strategy is described as communication adaptation (Kotler and Armstrong, 1999:596). Communication adaptation has gained adherence in spite of the international scope of the English language because not in all countries can English be used. Kotler and Armstrong (1999:596) observe that may United States multinationals have had difficulty in crossing the language barrier, with results ranging from mild embarrassment to outright failure. The multinational enterprise must carefully screen its brand names and advertising messages to guard against those that might damage sales or offend consumers in specific international markets (Kotler and Armstrong, 1999:596). In the sphere of advertising, media need to be adapted internationally because media availability varies from country to country. In addition, the global business person should be aware that cultural differences can cause barriers to communication. Communication can make or unmake the global marketer. Changes in Investment Approaches There was a time when planning was very much emphasized in business. There was little flexibility in the programs and plans for entry into any kind of business. Today, investment programs can be tentative in nature and scope. Cateora and Graham note that many companies begin tentatively in international marketing, growing as they gain experience and gradually changing strategy and tactics as they become more committed (Cateora and Graham, 1999:17). Malone and Laubacher (1998) predict that in the future, as communications technologies advance and networks become more efficient, “electronically connected freelancers” (e-lancers) or investors who are not affiliated with specific business organizations may proliferate. Should that indeed take place, the dominant business organization of the future may not be a stable, permanent corporation but rather an elastic network that may sometimes exist for no more than a day or two. Investments can be temporary and investors can change loyalties and commitments.

Small, independent companies may form coalitions. These design coalitions take many forms. Some are organized as joint ventures; some share equity among their members; some are built around electronic markets that set prices and wages. Malone and Laubacher (1998) further predict that a shift to an e-lance economy would bring about fundamental changes in virtually every business function, not just in product design. Technology and Change Globalization has accelerated with advances in technology. Hill (1994:9) believes that the lowering of trade barriers made globalization of markets and production a theoretical reality. Beamish and others (2000:134) observe that managing a far-flung international business requires extensive communication in order to maintain organizational control. Advances in computer and fax technology have made such communication easier and less costly. Comparing the technological advancement of the twentieth century with that of the twenty-first century, Malone and Laubacher (1998) observe that the coordination technologies of the industrial era - - the train and the telegraph, the automobile and the telephone, the mainframe computer - - made internal transactions not only possible but also advantageous. The management of large corporations was centralized and were therefore provided with economics of scale in manufacturing, marketing and distribution. It was economically viable to directly control many different functions and businesses and to hire a large number of administrators and supervisors needed to manage them. In contrast, the communications technology of the present has shrunk the world. Malone and Laubacher (1998) note that with the introduction of powerful personal computers and broad electrical networks - - the coordination technologies of the twenty-first century, the economic equation changes. Since information can be shared instantly and inexpensively among many people in many locations, the value of centralized decision-making and expensive bureaucracies decreases. Individuals can manage themselves, coordinating their efforts through electronic links with other independent parties. Strategic Measures for Coping in a Globalized Environment Firms use a number of strategies in order to maintain their competitiveness. Those that are not able to improve the quality of their products and services have gone out of business. One strategy used by industrial firms is the making of the “hollow corporation” or a firm that contracts out most of its manufacturing. Most consumer electronic products bought in one country were produced in foreign countries (Stahl, 1995:77). Many U.S. managers move in the direction of offshore manufacturing and become hollow corporations because of some factors. The important forces influencing a firm’s decision to pursue global manufacturing operations - cost competitiveness, competitive markets, -government policy, and manufacturing processes. Factors in cost competitiveness include the relative cost of labor, materials, transportation and exchange rates. Competitive markets become a reason to pursue global manufacturing operations as foreign competitors enter U.S. markets and as international markets grow. Government policy that lowers trade barriers encourages global manufacturing operations. Sometimes fear of import restrictions from a host government causes a firm to decide to locate manufacturing facilities in the host country so that the manufactured items escape the import restrictions. Improved manufacturing technologies and processes have been associated with the decision to pursue global manufacturing operations. Automation, the extensive use of information technology, and high quality manufacturing systems permit many firms to pursue worldwide operations with efficiency (Stahl, 1995:77-78). Rue and Byars (1992:129) define global strategies as the alternatives chosen by a particular organization in order to compete in global industries on a worldwide, coordinated basis. Five global strategy options are available to business firms. These options include product standardization, broad-line global strategy, global focus strategy, national focus strategy, and protected niche strategy. Product standardization involves producing and selling a product that has passed quality specifications throughout the world. Broad-line global strategy involves engaging in worldwide competition in the full product line of the industry. This strategy involves product standardization. A global focus strategy involves selecting a particular segment of the industry in which a business competes on a worldwide basis. For this purpose, a business

organization standardizes its products in order to attain global competitiveness. A national focus strategy involves focusing on particular national markets to take advantage of national market differences. Products are suited to the needs of specific countries with their distinct culture and national character. The business firm might also become the overall low-cost producer in serving the unique needs of a particular national market. A protected niche strategy involves a business firm’s forging agreements with countries where government policies limit the number of global competitors entering the country (Goshal, 1987:425).

RESEARCH METHODOLOGY The researcher collected data regarding the respondents’ perceptions on business in general, on communication and information, on finance and investment, on technology, on government and economy, the psychological impact of globalization, an on international education. Each of the statement in the opinionaire corresponds to a five-point Likert-type scale. The respondents were advised to indicate, as they chose, the scale representing their response to each statement. The quantitative and qualitative scales were 5 for Strongly Agree (SA), 4 for Agree (A), 3 for Undecided (U), 2 for Disagree (D), and 1 for Strongly Disagree (SD). Since the purpose of the study was to determine the central tendency of the responses to each statement, the researcher determined the weighted mean of each statement. In order to arrive at a definite interpretation of the respondents’ central tendency, the researcher assigned the following hypothetical mean range to the scales in each item: Range Scale 4.21-5.00 Strongly Agree (SA) 3.41-4.20 Agree (A) 2.61-3.40 Undecided (U) 1.81-2.60 Disagree (D) 1.00-1.80 Strongly Disagree (SD) The data were recorded on tables showing the frequencies and percentages of responses under each item in The various dimensions of the opinionaire. The weighted mean, as well as its qualitative equivalent was also recorded, presented, analyzed and interpreted. STUDY RESULTS AND DISCUSSION The tables referred to in this section are presented at the end of the paper. Table 1 - Perceptions on business in general As a whole, the respondents strongly agreed to the statements pertaining to business, as indicated by the factor average of 4.27. Specifically, the travel executives strongly agreed that “in our present time and era, the way we do business is far different as compared to the time prior to or during the Cold War.” They affirmed that the issue of balance of power between the United States and the USSR has already been resolved. At present, the world is united and business revolves around free trade, thus encouraging every country to come up with the best products, manufactured toward withstanding global competitiveness. Agreement was indicated by the respondents to the statement that “it is easier to start and operate a business today than it was thirty years ago.” Globalization has minimized if not obliterated the restrictions on foreign trade. Beamish and others (2000:135) observe that for the past fifty years, declining tariffs and the emergence of regional trading blocs have had an enormous impact on world trade and investment. Commercial liberalization policies have been adopted by numerous governments since their participation in the General Agreement on Tariffs and Trade (GATT). The promotion of multilateral cooperation has been nurtured by the World Trade Organization. The travel executives agreed that “the appropriate organizational structure in a globalized system is anchored on decentralization.” The respondents were referring to a preglobalization trend in which multidomestic affiliates to a parent company were formed in

different countries. The multidomestic affiliates were headed by local nationals as country managers whose performance was evaluated by criteria associated with key result areas directed toward making a profit center out of each affiliate. This concept had remained with the respondents because this practice predominated for a number of years. However, in reality, the global company is anchored, not on decentralization but on integration. Companies form a global product division structure in which affiliates around the world are not autonomous. Instead, they become an integrated part of a global organization and often do not perform an independent role (Beamish and Others, 2000). The travel executives strongly agreed that “the business cycle is faster as a result of globalization.” The acceleration of the product cycle is possible with the cooperation of participating government. If in accordance with the theory of Porter (1990), the governments of the various countries increase their investments in education, infrastructure, and basic research, and adopt policies that promote competition within domestic markets, the quality of national products would be suited for international markets. Consequently, the product sells faster. Furthermore, the business cycle is faster in countries with first-mover advantages, such as when they are credited as the pioneer in the manufacture of a fast-selling commodity in the world market. Strong agreement was shown by the travel executives to the statement that “in a globalized system, it is easier to formulate and market brands that have cross-cultural appeal.” For this reason, it is necessary to take note of the principle advanced by Cateora and Graham (1999:85), that the successful marketer needs to be a student of culture. Table 2 - Perceptions on communication The travel executives agreed that “our present world has resulted to changes in the way we communicate with others.” Today, communication is accelerated by various mediums. Friedman (2000) believes that in the early part of the twentieth century, everyone will have access to high-speed, broadband Internet communications right in their home or office or handheld notepad or beeper. Friedman (2000:67) calls this evolution the “democratization of information.” The respondents agreed that “globalization has resulted to our ability to reach out to people in other countries in a faster, deeper, cheaper manner.” The low cost of communicating by telephone, by fax, the Internet, radio and television - - and selling products through these media - - characterizes the twenty-first century. Agreement to both statements was demonstrated by a factor average of 3.78. Table 3 - Perceptions on finance and investment The factor average of 3.63 generally denotes the respondents’ agreement to most of the statements pertaining to finance and investment. The travel executives agreed that “the globalized system had changed the way one invests.” Investments today are rendered convenient and expedited through online brokers. Friedman (2000) notes that the whole world operates like Wall Street because global investing has become easier and more accessible. The ability of online investors to move resources globally has an economic impact on a country was a principle to which the respondents agreed. Disagreement was expressed by the travel executives to the statement that “globalization has encouraged companies to invest in and explore opportunities worldwide.” In the context of the unrest that takes place in some parts of the world today, one can see the reasons why the respondents disagreed to the statement. Needless to say, investors observe the political and legal climate of different countries before they decide to make investments in specific countries. Other investors may consider violations of human rights, curtailment of civil rights, and military rule as a basis for refusal to invest in other countries. The travel executives agreed that “there is a need for the standardization of accounting and financial systems worldwide.” They favored a uniform accounting system in which instead of keeping accounting records and preparing financial statements in varying currencies and systems a common methodology could expedite transactions and contribute to accuracy.

Table 4 - Perceptions on technology The travel executives agreed that “companies that do not modernize or have top-notch technologies would likely fail.” Their agreement is predicated on the idea the use of best technologies is imperative in a highly competitive business environment. The respondents agreed that “globalization requires companies to restructure to take advantage of new technologies.” This finding implied that the respondents were aware of the need to adopt a new structure especially in the creation of global product divisions. Beamish and Others (2000) elaborate that when global product divisions take over, they tend to achieve direct lines of communication into key markets and can therefore get their product and market knowhow to the field unimpeded. Organizational adaptation needs to accompany innovation. The respondents agreed that “the greater a country’s bandwidth, the greater the likelihood of its prosperity.” The respondents were therefore aware of the importance of communication technology in a country’s involvement in the global marketplace. High-speed broadband Internet communications facilitate instant access to communicators all over the world. If a country has greater bandwidth, its business deals will be facilitated. Agreement was signified by the respondents to the statement that “countries exporting IT and services would likely become more prosperous than those who export basic raw materials.” The respondents showed awareness of the important role performed by information technology in a country’s future. Because of the need for high-speed cost-efficient communication brought about by the urgency of global business, information technology would have a strong demand. The factor average of 4.02 denotes that the travel executives generally agreed to the statements in this category. Table 5 – Perceptions on government and economy The respondents agreed on the role of the government in globalization, as indicated by the factor average of 3.95. The respondents strongly agreed that “the best system in our globalized world is free market capitalism.” This response validates the principle advanced by Friedman (2000) that the driving idea behind globalization is free-market capitalism - - the more a country allows market forces rule and it opens its economy to free trade and competition, the more efficient and flourishing its economy. Strong agreement was signified by the respondents to the statement that “the globalized system has knocked off previous barriers between countries.” This response means that with the encouragement of free trade and unrestricted travel, homogeneous groups of customers around the globe have been created. Except for some preferences that have become multi-domestic, the preferences of many consumers tend to become less localized or provincial and approach a global standard (Johansson, 1997). The respondents agreed that “globalization has forced governments to strengthen their digital infrastructure to be globally competitive.” Termed by Friedman (2000) the “democratization of information”, the deregulation of communication media has allowed many countries to experience a breakthrough in the dissemination and acquisition of information. Governments have to use the Internet as a framework to facilitate cross-border communication flow and information access. The travel executives agreed that “there is a need for an e-government.” This response meant that the respondents were aware that in this a need to use technology to heighten interaction between a government and its constituencies. Indecision was shown by the travel executives regarding the statement that pertained to the “need for more strategic alliance and regional integration among countries.” Their uncertainty was brought about by the fact that while regional integration is desirable and definitely the ideal situation in any world order, it is not possible to integrate all countries into a strategic sphere. With some countries, barriers relating to culture, technology, law, unevenness of trade benefits could militate against massive and absolute globalization. The travel executives agreed that “countries need to brand, market, and sell themselves as investment destinations.” A country that seeks to become an investment destination needs to

highlight positive influences, and downplay or eliminate what may be perceived as negative to the global community. The respondents agreed that “a country’s cultural and environmental foundation has an impact on its attractiveness to global investors.” Part and parcel of the general appeal that a country projects is its exotic flavor and protective attitude towards the environment. That countries should “absorb cultural influences of other cultures to adapt and be enriched in our globalizing world” obtained the strong agreement of travel executives. It is necessary, therefore that intercultural differences be accepted and be taken as a part of the efforts to thrive in a global society. There was strong agreement to the statement that “globalization has created a more open and unified global market for many goods and services.” The travel executives recognized the role of globalization in the integration of business activities such as global marketing, global finance, global production, and global branding. Theodore Levitt has made reference to world markets that are driven “toward a converging commonalty” such that “the global corporation sells the same thing in the same way everywhere (Levitt, 1983). Table 6 - Perceptions regarding the psychological impact of globalization The factor average of 3.85 revealed their agreement to the statements in this dimension. Strong agreement was shown by the travel executives to the statement that “globalization has set in at our world today, and most of what we do have international repercussions.” This finding has a number of implications. First, globalization affects every individual’s way of perceiving his or her qualifications to be fitted to the purposes of globalization. Second, globalization affects the way in which people view technology. Where in the past, technology was associated with the privileged few, most business people today view technology as indispensable. Third, anyone who has a tendency to resist change will, at last accept that lifestyle modifications and alterations in ways of doing things have become necessary. This realization tends to ingrain into people the spirit of creativity, alertness, innovation, and the acceptance of the importance of interconnectivity. The respondents agreed that “the globalized system has changed the way I perceive the world to be.” The respondents realized that the world is no longer composed of isolated countries and individuals working toward individual survival and sustenance. Instead, they perceived the world to be highly interconnected in a way in where people and countries completely open themselves to a global web of business activities and relationships. The world today integrates people, systems and philosophies into a dynamic whole and opens itself to heightened forms of interaction. The respondents agreed that they “felt pressured and threatened as our world further globalizes.” This threatening feeling is psychological in the sense that it assails those who think that they may be unprepared for globalization. The pressures to excel, to engage in global competition, and to meet current international standards are felt by many individuals. This environment may lead to feelings of anxiety and insecurity in individuals and organizations. Indecision was shown by the travel executives pertaining to the statements that “there is a risk that those who are left behind in a globalizing world will create chaos and a backlash.” With their anxiety and feelings of pressure regarding globalization, the travel executives were not sure that a backlash against globalization could create a chaotic world. The respondents recognized the need for acceleration of technology, improvement of systems, and management of quality in order to survive in a globalizing world. However, they doubted that the reactions to globalization would be violent, even if it means that those who are slow to change and to develop would be left behind without economic advantages. Table 7 - Perceptions on international education The factor average of 3.84 denoted that the respondents generally agreed to the statements under this factor. They strongly agreed that “the academe has a major role to play in educating and preparing the youth to cope with our globalizing world.” They acknowledged the important role of the academic sector in revolutionizing technology, imparting radical theories of economics and

trade, and refining the students’ skills and competencies so that they could cope with the rapid trend of globalization. The respondents showed confidence in the capabilities of academic institutions to promote among people a better understanding of globalization and its features, to encourage research on globalization, and to clarify the role of individualized in a globalized world. The travel executives strongly agreed that “studying in another country would heighten an individual’s chance of succeeding in a globalized world.” The respondents affirmed the importance and value of experiential learning in other countries. Studying in another country provides the learner with opportunities to enhance networks, build relationships, understand other cultures, learn new technologies and operational approaches. It allows the learner to appreciate and work through a different environment. Moreover, it trains individuals to embrace diversity and helps build confidence in cross-border business activities. The travel executives agreed that “online education is an effective methodology in providing educational access across borders.” They affirmed that unbounded knowledge could be gained through on-line education. The Internet can be a tool to spread out knowledge and information. Robey and Sales (1994) suggest that there is a need for executives of global organizations to pursue higher education within the ethical context of global business. However, the respondents were uncertain that “they would spend over $500 for a relevant short term course offered by an academic institution in another country via the Internet.” The respondents’ uncertainty may be attributable to costs, mistrust, and feared technological incompatibilities.

IMPLICATIONS From the results of the study, it is clear that globalization has an impact on contemporary business in the sense that it affects the way in which business is transacted, the speed of communication flow, finance and investment strategies, technological advancement, and government principles and investment strategies. In the light of the great influence of globalization on global stakeholders as a whole, it is necessary for those concerned to plan ways by which business practitioners can cope with a global environment. These strategies consist of making out of one’s firm a learning organization, implementing total quality management, and cultural adaptation. An executive seeking to engage in international business must develop a learning organization. A learning organization is one whose competitive advantage is not only lodged in existing assets and capabilities, but in the ability of the organization to innovate, to create new products, to develop new markets, to adopt new distribution channels, to find new advertising media, and to discard outdated products and tired sales routines (Johansson, 1997). The executive needs to introduce innovations in order to cope with global competitiveness. However, before any innovation can be introduced, the executive must study the environmental, social, and psychological factors that influence the acceptance of any product. No matter how “global” a product is, adjustments must be made to suit the taste and temper of the market. Furthermore, the manager should note that an innovative product might change consumer tastes and preferences and even relationships. For instance, in some countries, the computer is perceived to be a promoter of personal isolation and alienation. There are instances in which products are modified to fit the needs of a multicultural market. Cateora and Graham (1999:345) emphasize that as companies gain more experience with the idea of global markets, the approach is likely to standardize where possible and adapt where necessary. There are global brands like Coca-Cola, Kodak, Sony, Marlboro and Kleenex that have gained worldwide acceptance. Even then, they make country specific adaptations that deviate from the original product in order to be acceptable in some countries. The contemporary executive should explore new markets, especially emerging markets that comprise the newly democratized countries and the developing countries. The exploration process can begin with market research and environmental scanning, since the political climate of developing countries may be characterized by uncertainty. Subsequently, the executive can

introduce new product, develop new niches, and adjust pricing schemes to satisfy different types of customers. The adoption of new distribution channels may require new techniques of selling, depending on the culture and economic situation of the new channel. If the channel is a developing country, the technique of selling may be adjusted to the buying patterns of consumers. For instance, the fast food chain that offers a combination of food items and a drink to be consumed in one meal can find a channel of distribution comprising workers living on modest wages. Various advertising media are open to global organizations. However, the type of advertising media that are appropriate to specific countries should be used. In countries with a high literacy rate and monopolistic management of television outfits, print media are effective channels of advertising. In countries where the literacy rate ranges from average to low, radio and television advertising are appropriate. In poor countries, radio advertising is effective because every family has a radio set. Products that can no longer be used - - because their use is time-consuming and incurs other expenses - - should be rejected. For instance, flannel diapers for infants are going out of use. Some products have to be phased out of the market to accommodate the demand for new and cost-efficient products. Executives who aim to compete in the global market have adopted a total quality management philosophy. Four important techniques are adopted. They ensure customer satisfaction, give attention to competitors, benchmark, and provide employee empowerment. Meeting customer requirements is one level of customer commitment. This level may imply a reactive system to provide to customers what they request of a firm. Such a reactive mode is different from an expression of striving for “total customer satisfaction”, customer delight, or “exceeding customer expectations” (Stahl, 1995). Attention to competitors is another concern in marketing. Changes in competition such as the entry of a new competitor can be a dramatic threat. In the global market, this threat can come from strong and established companies all over the world. Stahl (1995) emphasizes that extensive changes due to competitive threats underscore the importance of competitive strategy and competitor analysis. Benchmarking is another total quality management strategy that can be used in the global market. Benchmarking is the process of comparing work and service methods against the best practices and outcomes for the purpose of identifying changes that will result in higher quality output (Luthans 1995). Glanz and Dailey (1992) declare that benchmarking offers a number of benefits to organizations. First, this technique helps organizations compare themselves against successful companies for the purpose of identifying improvement strategies. Second, benchmarking enables organizations to learn from others. Third, it helps create a need for change by showing the organization how procedures and work assignments should be altered and resources reallocated (Glanz and Dailey, 1992). Another strategy for improving quality is employee empowerment. Empowerment is the authority to make decisions within one’s area of operations without getting approval from anyone else. Thus, the international executive must be given sufficient latitude in decision-making. There are two characteristics that make empowerment unique. One is that the personnel are encouraged to use their initiative and second is that employees are given not just authority, but resources as well, so that they are able to make a decision and see that it is implemented (Luthans, 1995). Ivancevich et al (1994) declare that firms that are aiming to improve quality believe in continuous improvement, a process of constant, incremental improvements in a firm’s process. An organization must create constancy of purpose toward improvement of product and service. When international companies develop strategies for their global markets, they need to be flexible and alert to local cultures (Cateora and Graham, 1999). Although there are several cases of serious mistakes and blunders, there have been great successes as well. The success stories have one thing in common: When the market demands it, successful marketing strategies reflect

local custom. Giving numerous examples of the cultural issues which multinational companies must confront, Cateora and Graham (1999) emphasize that a marketer must be sensitive to cultural dynamics. A salient understanding of the culture of various countries is relevant to the global executive. The design, style, and uses of a product must be adapted to the culture of the market. The contemporary executive must realize that markets are not static; they are dynamic. They change in consonance with global trends and influences. Product preference is altered because of changing conditions. For instance, the sellers of beer in Philippine cities report that where “coffee clubs” abound in malls and crowded localities, the sales of beer have diminished. Formerly, business transactions used to be discussed over bottles of beer. Today, these discussions are made over cups of coffee. Thus, a liquor-oriented society has transformed into coffee lovers as a result of the proliferation of coffee joints in the malls. Global executives should learn from the anthropologist, who divides culture into five elements: material culture, social institutions, humans and the universe, aesthetics and language. Understanding the dynamics and sensitivities of these elements in conducting cross-border business can heighten the level of success of the interaction. Material culture includes technology and economics. The global executive must analyze the needs of the market according to its level of technology. This element affects the level of demand for certain products as well as the quality and types of product demanded by the culture. The higher the level of technology in the culture, the more demand there is for sophisticated equipment. The global executive should understand the importance attached by the market to its social institutions. Marketing techniques that appeal to close family ties succeed more in the Philippines, China, Italy, France, and Spain than in other countries. The concept of the relationship between humans and the universe affects the buying patterns of the market. Religion, morality and superstition can spell the difference between success and failure in an enterprise. The marketer must take into consideration the religion of the market before selling goods that might offend the adherents of a specific religion. Morality can affect a market’s preferences. For instance, paperweights with the shape of the human phallus, which sells fast in Denmark may not have a market in the Philippines and in other parts of Asia. In the Philippines, an artistic presentation entitled “Vagina Monologues” played to several empty seats in the theaters because of its title. Superstition exerts an important influence on the buying patterns of many markets. Asian markets are particularly sensitive about products that carry meanings usually associated with evil. Beliefs in dryads, elves, nymphs and ogres, predispositions against the number 13, preference for the number 8, belief in the good luck brought about by dragons, and repugnance for the color black are examples of superstitious beliefs which global executives have to contend with. Global executives have to recognize that the market’s concept and standards of beauty can differ. The uniqueness of a culture can be identified according to its people’s interpretation of symbols, which in turn reflects their mode of artistic expression. In this case, the principle “Beauty lies in the eyes of the beholder” is true. A deep understanding of the languages of various countries is equally important to the global executive. The nuances of language can cause serious barriers to communication. For instances, there are people who cannot pronounce the letter “L” and substitute them for “R” and vice versa. The meanings of idioms and phrases may interfere with the executives’ effort to communicate clearly.

FINDINGS AND RECOMMENDATIONS Based on the findings of the study, the researcher inferred that where the travel executives were concerned, globalization has an impact on contemporary business in the sense that globalization has improved the ways of engaging in business, accelerated communication, removed tariffs and levies that militate against free trade, stimulated technological advancement, encouraged free market capitalism, caused changes in the self-perceptions of groups and

individuals, and encouraged schools to be innovative. Executives worldwide are like-minded on several issues relating to globalization. There has been a general agreement to the views offered by author Thomas Friedman on globalization. In light of the potential impact of globalization on business, it is necessary for executives to plan, develop and implement well-thought strategies in which their organizations can best succeed in a globalized environment. In the light of the results of the study the researcher recommends selected strategies to individuals, organizations, government institutions, and academic institutions as they face the challenges of a globalized environment. 1 Governments and corporations should work together to promote and facilitate e-commerce and e-governance worldwide. The supporting technological systems and infrastructure need to be put into place. 2. Governments and corporations should build organizational structures that are anchored on decentralization and flexibility. Doing so allows them to respond effectively to the challenges and opportunities brought about by globalization. 3. Governments and corporations need to assess and evaluate the potential psychological impact a highly competitive society would have on employees. Training on Global Adaptation and CrossCultural Success would help minimize misconceptions and fears on Globalization and could provide guidance on winning global strategies. 4. Globalization Committees or Advisory Boards may be formed in organizations. These organizational units can address the assessment of Global Preparedness of organizations, enhance cross-cultural understanding through training and discussion forums, and develop strategies for organizational success in a global environment. 5. Governments and corporations should develop a coherent plan to strategically compete and adapt to a global environment. The insights offered in this study may be integrated in the planning process. 6. Academic institutions should thoroughly explore the potential opportunities and threats that exist in online education. International knowledge transfer among individuals, corporations, and governments may become vehicles for global learning. FEATURED TABLES Table 1 Travel Executives’ Perceptions on Business in General (N = 118) Statement In our present time and era, the way we do business is far different as compared to the time prior to or during the Cold War.

Strongly Agree F %

Agree F %

Undecided F %

Disagree F %

Strongly Disagree F %

u

Scale

62

52.54

45

38.13

5

4.24

5

4.24

1

0.85

4.37

SA

26

22.03

36

30.51

23

19.49

27

22.88

6

5.08

3.41

A

It is easier to start and operate a business today than it was thirty years ago.

The appropriate organizational structure in a globalized system is anchored on decentralization 44

37.29

61

51.69

8

6.78

5

4.24

-

-

4.22

SA

The business cycle is faster as a result of globalization

79

66.95

37

31.35

1

0.85

-

-

1

0.85

4.63

SA

In a globalized system, it is easier to formulate and market brands that have cross cultural appeal.

73

61.95

41

34.74

1

0.85

2

1.69

1

0.85

4.55

SA

4.24

SA

Factor Average

Table 2 Travel Executives’ Perceptions on Communication (N = 118) Statement Our present world has resulted to changes in the way we communicate with others

Strongly Agree F %

Agree F %

Undecided F %

Disagree F %

Strongly Disagree F %

u

Scale

24

20.34

53

44.91

31

26.27

7

5.93

3

2.54

3.74

A

22

18.64

70

59.32

14

11.86

8

6.78

4

3.39

3.83

A

3.78

A

Globalization has resulted to our ability to reach out to people in other countries in a faster, deeper, and cheaper manner Factor Average

Table 3

Travel Executives’ Perceptions on Finance and Investment (N = 118) Statement

The globalized system has changed the way one invests

Strongly Agree F %

Agree F %

Undecided F %

Disagree F %

Strongly Disagree F %

u

Scale

35

29.66

70

59.32

9

7.63

2

1.69

2

1.69

4.13

A

33

27.97

53

44.91

13

11.02

18

15.25

1

0.85

3.84

8

6.78

21

17.80

20

16.95

49

41.52

20

16.95

2.56

33

27.97

64

54.24

10

8.47

8

6.78

3

2.54

3.98

The ability of online investors to move resources globally has an economic impact on a country

Globalization has encouraged companies to invest in and explore opportunities worldwide

A

D

There is a need for the standardization of accounting and financial systems worldwide

Factor Average

A

3.63

A

Table 4

Travel Executives Perceptions on Technology (N = 118) Statement

Strongly Agree F %

Agree F %

Undecided F %

Disagree F %

Strongly Disagree F %

u

Scale

19

46

43

8

2

3.61

A

Companies that don’t modernize or have top-notch technologies would likely fail 16.10

38.98

36.44

6.78

1.69

Globalization requires companies to restructure to take advantage of new technologies The greater a country’s bandWidth, the greater the likelihood of its prosperity

41

34.74

57

48.30

13

11.02

6

5.08

1

40

33.90

63

53.39

10

8.47

5

4.24

-

45

38.13

56

47.46

11

9.32

5

4.24

1

0.85

4.11

A

4.17

A

4.18

A

4.02

A

Countries exporting IT and services would likely become more prosperous than those who export basic raw materials 0.85

Factor Average

Table 5

Travel Executives’ Perceptions on Government and Economy (N = 18) Statement

Strongly Agree F %

Agree F %

Undecided F %

Disagree F %

Strongly Disagree F %

u

Scale

46

38.98

60

50.85

7

5.93

4

3.39

1

0.85

4.24

SA

52

44.07

61

51.69

4

3.39

1

0.85

0

0

4.39

SA

38

32.20

51

43.22

19

16.10

8

6.78

2

1.69

3.97

A

The best system in our globalized world is free market capitalism The globalized system has knocked off previous barriers between countries. Globalization has forced government to strengthen their digital infraStructure to be globally competitive

Globalization has resulted to changes in the political and economic strategies of countries

25

21.19

49

41.52

17

14.41

20

There is a need for an egovernment

27

22.88

76

64.41

13

11.02

1

17

14.41

34

28.81

42

35.59

12

10.17

51

43.22

34

13

11.02

40

33.90

46

38.98

65

50

42.37

54

7

5.93

3.55

A

0.85

1

0.85

4.08

A

17

14.41

8

6.78

3.30

U

28.81

20

16.95

1

0.85

3.45

A

32

27.12

28

23.73

5

4.24

4.08

A

55.08

5

4.24

2

1.69

0

0

4.24

SA

45.76

8

6.78

5

4.24

1

0.85

4.24

SA

3.95

A

There is a need for more strategic alliance and regional integration among countries

Countries need to brand, market, and sell themselves as investment destinations A country’s cultural and environmental foundation has an impact on its attractiveness to global investors Countries should absorb cultural influences of other cultures to adapt and be enriched in our globalizing world

Globalization has created a more open and unified global market for many goods and services Factor Average

Table 6

Travel Executives’ Perceptions on the Psychological Impact of Globalization (N=118) Statement

Strongly Agree F %

Agree F %

Undecided F %

Disagree F %

Strongly Disagree F %

u

Scale

49

41.52

55

46.61

6

5.08

8

6.78

0

O

4.23

SA

30

25.42

44

37.29

20

16.95

20

16.95

4

3.39

3.64

A

39

33.05

66

55.93

9

7.63

4

3.39

0

O

4.19

A

17

14.41

36

30.51

38

32.20

26

22.03

1

0.85

3.35

U

3.85

A

Globalization has set in at our world today, and most of what we do have international repercussions. The globalized system has changed the way I perceive the world to be I feel pressured and threatened as our world further globalizes There is a risk that those who are left behind in a globalizing world will create chaos and a backlash Factor Average

Table 7

Travel Executives’ Perceptions on International Education (N = 118) Statement

Strongly Agree F %

Agree F %

Undecided F %

Disagree F %

Strongly Disagree F %

u

Scale

51

56

10

1

0

4.33

SA

The academe has a major role to play in educating and preparing the youth to cope with our globalizing world 43.22

47.46

8.47

0.85

O

Studying in another country would heighten an individual’s chance of succeeding in a globalized world

52

44.07

50

42.37

8

6.78

8

6.78

0

O

4.24

SA

12

10.17

65

55.08

29

24.58

9

7.63

3

2.54

3.63

A

11

9.32

32

27.12

45

38.13

24

20.34

6

5.08

3.15

U

3.84

A

On-line education is an effective methodology in providing educational access across borders I would spend over $500 for a relevant shortterm course offered by an academic institution in another country, via the Internet Factor Average

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Levitt, Theodore. “The Globalization of Markets.” Harvard Business Review, May-June 1983. Porter, Michael E. The Competitive Advantage of Nations. New York: The Free Press, 1990. Rogers, Everett M. Diffusion of Innovations. New York: Free Press, 1995. Rue, Leslie W. and Lloyd L. Byars. Management Skills and Application. Burr Ridge, Illinois: Richard D. Irwin, Inc., 1992. Stahl, Michael J. Management: Total Quality in a Global Environment. Cambridge, Massachusetts: Blackwell Publishers, 1995.