The themes of technological innovation, entrepreneurship, and organizing
Insights about Global Realities and Possibilities
The global economy includes all of the existing, emerging and potential markets and customers in the world. One ofthe most significant underlying approaches in the drive to be more successful is to make products and services more affordable through design innovations and incorporating customers ’ needs and expectations in the solutions. Such methods have been in play for several decades in the developed countries as companies like Walmart and Toyota have become global giants and great financial successes through innovations to make their products and services both more affordable and their systems more productive and cost-effective.
Globalization requires that businesses and governments become key participants in developing, supporting and advancing the social, economic, technological, market, and environmental underpinnings of the global community of nations and people. The underpinnings include assuring that the recipients of the solutions, especially the customers, stakeholders, and societies of the world, are provided with right products and services that have been designed and delivered from an external perspective, not just those of business leaders and/or high-level government officials, and that everyone’s well being is positively enhanced and not exploited.
The multi-dimensional perspective of globalization includes the effects and impacts on a much larger scale, including all of the driving forces of change. The resulting management constructs are more complicated because reality and future requirements have to be examined from multiple views involving more intensive analysis of the salient forces and more in-depth understandings of the interactions and interrelationships between the forces. Moreover, the analyses require exploring the possibilities as well as the realities, i. e. what could be or should be not just what is. Thus, it is not just a simply matter of obtaining information and data and discerning what is happening; it also involves getting to the underpinnings of reality and trying to ascertain what could be done instead of just trying to understand what is being done. It involves a mindset shift from exploring “what is” to “what could be.”
Strategic leaders have to view human developments and the elimination of poverty in the least developed countries as enormous opportunities for transforming non-customers into customers. Moreover, strategic leaders in rapidly industrializing countries have to create positive outcomes without overwhelming the social world and the natural environment with pollution and wastes. For instance, strategic leaders in China are expanding their industrial outcomes at incredible rates, but in doing so they are creating wastes streams that may become impossible to mitigate in just a few years. Air and water pollution may be the limiting factor in China’s quest to be a global economic power. Such difficulties are much easier to correct before the industrial facilities and power plants are built. Once the plants have been designed and constructed, it is often close to impossible to retrofit pollution abatement on a cost-effective basis. With positive actions, strategic leaders have the opportunity to solve future problems at low investments that in the long-term are inconsequential to overall economics of the processes. Failure to do so may result in significant long-term costs, expenditures, and possible failures.
In Globalization: A Critical Introduction, J. A. Scholte (2000) identifies five categories that help to articulate what globalization is as follows (p15-17):
• Internationalization-the growth of international trade and interdependence among countries and participants.
• Liberalization-reducing government imposed trade restrictions on the movement of goods between countries.
• “Universalization”-spreading of concepts and experiences to people around the world in harmonizing aspirations and outcomes.
• Modernization- spreading social structures around the world affecting local self-determination and destroying local cultures.
• “Deterritorialization”-reconfiguring geography so that social space is mapped out in terms of territorial places, territorial distances, and territorial borders.
Scholte’s perspective provides a sense of the complexities involved in globalization. Clearly, globalization involves moving away from just economic theories about international trade and exchanges to the more integrated business world, in which all ofthe driving forces are considered and acted upon from a unified perspective. Moreover, there are many positive aspects, but as indicated by Scholte, there are many concerns and issues that have to be dealt with, especially those impacting social institutions like the destructions of ingenious cultures and languages.
Globalization today is more than economic forces, political decisions and geography. The expanding physical and informational links between distance markets have spawned a better understanding of cultural and regional similarities and differences among people. Public policy directives in the developed countries to eliminate historic barriers to trade and commerce contribute to common markets and more open communications and travel. However, the evidence about whether globalization is real does not provide a compelling answer. Globalization can be viewed as part of the evolutionary track of expanding opportunities for economic and social activities and interactions. It may be viewed as simply a linear expansion of the economic power that has migrated from the Western countries, principally the G7, to a few new players who are vying for the share in the economic riches. This perspective is not a new paradigm for achieving growth and improvements for all people, but one of simply adding new players to the world elites. The new powerhouses are China, India, Brazil, and Russia (BRIC countries).
The current form of globalization may lead to more intense competition among the key players without regard for the broader social, economic, and environmental factors. New companies in the BRIC countries may focus extensively on economic outcomes and try to gain superior positions against the old line corporations like BMW, DuPont, Ford, IBM, Pfizer, Proctor & Gamble,
Shell Oil, Unilever, and thousands of others. Emerging companies may use their strategic advantages of low-cost labor and positive cash flow to grow rapidly. They may quickly become global players. In this scenario, globalization is really a different manifestation of the old world of the economic models of the twentieth century. The main competitors not only seek to dominate customers and markets, they try to monopolize the essential resources for production through whatever means available. For instance, companies in China are trying to secure source s of raw materials around the world from aluminum to zirconium. Moreover, with the numerous examples of toxic substances being used in producing products or incorporated in the products, there are great concerns that Chinese companies in particular are not following prescribed protocols or generally accepted practices for ensuring safeguards, consumer protection, proper work standards, and environmental protection.
Globalization must include the whole context of reality (inclusiveness), involve providing the best solutions possible (innovativeness), build enduring and trust-based relationships with customers, stakeholders, partners and people around the world (connectedness), provide the requisite information about products, processes and services to all customers and constituencies (openness), and ultimately, ensure that people are successful and that success is enduring over time (effectiveness). To do this, strategic leaders must embrace the importance of the social underpinnings, recognize and respect cultural differences between societies, protect and preserve the natural environment, create and deploy the best technologies and products possible, contemplate non-traditional and countervailing perspectives that reveal ways of doing busine ss more efficiently and effectively, and understand the needs of the future as well as the expectations of the present.
Adil Najam, David Runnalls, and Mark Halle
(2005) of the International Institute of Sustainable Development in their article, “Environment and Globalization: Five Propositions”, identify several challenges and opportunities associated with globalization (P10):
1. The rapid acceleration in global economic activity and our dramatically increased demand for critical natural resources undermine our pursuit of continued economic prosperity.
2. The linked processes of globalization and environmental degradation pose new security threats to an already insecure world. They impact the vulnerability of ecosystems and societies. And the least resilient ecosystems. The livelihoods of the poorest communities are most at risk.
3. The newly prosperous and the established wealthy will have to come to terms with the limitations of the ecological space in which both must operate, and also with the needs and rights of those who have not been as lucky.
4. Consumption-in both the North and South - will define the future of globalization as well as the global environment.
5. Concerns about the global market and global environment will become even more intertwined and each will become increasingly dependent on the other.
These perceptions are very useful when exploring the meaning and future aspects of globalization. It is crucial to realize that globalization is accelerating and that the availability of resources is a significant strategic factor for the sustainable success of global corporations. For most the twentieth century, competition played out in the domain of the markets and the drive for revenue and profits. Today, the availability of natural resources, especially metal ores, petroleum and water, is among the most critical factors for achieving strategic success. Resource vulnerabilities are becoming worrisome. Such vulnerabilities are multifaceted. They include being unable to handle all of the wastes being generated and lacking the capabilities to mitigate, if not eliminate, pollution and hazardous wastes. Failures to resolve such difficulties may limit the overall economic and market potential. As more people around the world expect and demand products and service, the economic realities have to be improved dramatically to satisfy all of the needs and at the same time keep the negative effects and impacts under control and mitigated to the extent possible. The world is more complex and is expected to become more interdependent as emerging markets take their place in the business world of the twenty-first century.
