Globalization

The term globalization can be taken as referring to a process whereby traditional, local (i.e. regional or national) boundaries are transcended or rendered obsolete. Although there is some debate as to whether globalization as a phenomenon is actually happening, it is perhaps easiest to think of globalization as a summary term, encompassing references to wide-spread change in several arenas, such as politics, international relations, the world’s economic systems, and business and management. Some specific examples of such change might be; the rise of global financial markets; the development of world-wide communications technology (such as the Internet); political unification and transnational organizations (such as the European Union, NATO); transnational regulatory agreements (GATT). From a business and management perspective, each of these examples could also be viewed as signalling opportunities and challenges for contemporary organizations.

Confusion can arise as to whether globalization is itself a driver of change, or whether it is merely a description of multiple changes in different contexts. Each example above could be thought of as evidence of globalization (a manifestation), or a consequence of globalization (an effect) or a driver of globalization (a cause), or a mix of these. Complexity and confusion about causal processes is itself a characteristic of the phenomenon, and also a pointer to a key theme that because no one process (or institution) can be identified as a cause, correspondingly, no one institution can exercise sovereignty. In other words, ‘no one is in charge’. Allied to this is the idea that globalization results in a shrinking of the social world, or space-time compression. The sociologist Anthony Giddens defines globalization as "…the intensification of world wide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa (p 64)."

Another key theme is that globalization will affect national or local cultures. Two contrasting theories (convergence theory and divergence theory) address this. Convergence theory holds that as national boundaries are eroded in the political, technological and business arenas, so too local differences in culture will be eroded, with the end result being one ‘global’ culture. Divergence theory maintains the opposite, namely that cultural diversity will persist or even be reinforced by the rejection of superficial commonality. Each view has implications for Human Resource Management (HRM) insofar as HRM concerns the management of culture.

There are limitations with the definitional framework as given above. For example, it often goes unchallenged that there is an ideological aspect to globalization. It may result in a form of cultural imperialism, with an agenda set by the Northern hemisphere nations. Giddens has memorably referred to this as being less like ‘global village’, and more like ‘global pillage’. Writers such as Baumann have been quick to point to problems with any Utopian construction of globalization. Whereas the removal of established boundaries and compression of space-time may offer unprecedented opportunity for personal growth, it is likely this privilege will be denied the poor, i.e. the majority of the world’s citizens. Also, that globalization is a complex term and not easy to locate or define makes it susceptible to use as a rhetoric to justify otherwise unacceptable change, such as restructuring, de-layering or the relocation of manufacturing plants at short notice.

Further Reading
Baumann Z. (1999) Globalization: The Human Consequences, Polity Press, Cambridge
Giddens A. (1990) The Consequences of Modernity, Polity Press, Cambridge
Hoogvelt A. (1997) Globalisation and the Postcolonial World: The New Political Economy of Development, Macmillan, London
Lawrence P. (1999) Issues in European Business, Macmillan, London
Legge K. (1995) Human Resource Management: Rhetorics and Realities, Macmillan London Top