Even in fun, you should see the obvious. Last fall, my wife and I went on a cruise to the Caribbean. During this seven day adventure, we visited several countries that catered to our whims as Americans.
Yet, the impacts of globalization were obvious on the cruise ship. Both the passengers and the cruise staff appeared to operate within their own cultural preferences when not having to succumb to the dominant culture.
There were several occasions where there was multiple languages being spoken in the same area which provided a different backdrop to me as an American. We were all interconnected but yet apart.
Global forces continue to change business operations and society as a whole. The results of globalization mean that countries, businesses, and people become interdependent. Organizations typically pass through four stages to international commerce: The domestic stage, the international stage, the multi-national stage, and the global stage. In search of more profitability, companies send many of their business functions abroad in an attempt to obtain cheaper resources (i.e. labor) for products or services.
Should globalization change our thinking as Americans too? In the 1960s, the United States was a megastar internationally, accounting for 66.3% of worldwide foreign direct investments. As globalization began to open barriers to the free flow of commerce, non-U.S. firms sought to increase production activities to establish a presence in major foreign markets.
Given these changes, things started happening. In 2009, non-U.S. firms accounted for 14.1% of the stock foreign investments with the majority of these firms based in Hong Kong, South Korea, Singapore, Taiwan, India, and China. Charles Hill, author of International Business, notes: “The world may be moving toward a more global economic system, but globalization is not inevitable. Countries may pull back from their recent commitment to liberal economic ideology if their experiences do not match their expectations.”
Of course, globalization is not all good. America was once the center of all important business transactions internationally. However, now there is an emergence of other key global partners. Brazil, Russia, India, and China are becoming dominate providers of products and services abroad.
With the threat of outsourcings, many Americans are worried about job opportunities. Richard Daft, author of Management, further argued about the impacts of globalization: “For today’s managers, the whole world is a source of business threats and opportunities.” Should U.S. parents worry about their children’s future given the declining role of the United States in the global environment?
Today’s American students are not doing better than their parents as it relates to education. According to the Organization for Economic Cooperation and Development (OECD), the U.S. ranks fourth worst among 29 developed countries for children obtaining a higher level of education than their parents.
Only 21.6% of those 25 to 34 years old achieved a higher level of education than their parents in the United States. That compares to an OECD average of 36.8%. Consequently, current and future U.S. workers will be vulnerable to the consequences of globalization. Unfortunately, many politicians, executives, and media pundits do not have a long-term perspective about the opportunities and threats related to globalization. They should!
Discuss the opportunities and threats associated with globalizations and how emerging leaders can compete.
© 2013 by Daryl D. Green