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Managing globalization

Managing Globalization

Notes based on Managing Globalization in the age of Interdependence,

published 1995 by Pfeiffer & Company, San Diego, CA.

Introductory Quotation:

"In Managing Globalization in the Age of Interdependence, best-selling

author George C. Lodge, Jaime and Josefina Chua Tiampo Professor of Business

Administration at the Harvard Business School, tackles an issue of worldwide

proportions - the tensions created by globalization, the growing interdependence

of the earth's 5.5 billion people.

Globalization is the process forced by global flows of people,

information, trade, and capital. It is accelerated by technology, potentially

harmful to the environment - and at the present, driven by only a few hundred

multinational corporations. Lodge describes and analyzes the process on a truly

global level, looking at the relationships among the world's economic,

technological, political, and cultural aspects to provide more realistic

insights than purely management-based books on the subject.

Business in tandem with government must develop safe new institutions to

manage global tensions. And communitarianism, or collective leadership among the

world's peoples, he says, is the challenge of globalization."

Introduction:

"Globalization is a fact and a process. The fact is that the world's

people and nations are more interdependent than ever before and becoming more so.

The measures of interdependence are global flows of such things as trade,

investment, and capital, and the related degradation of the ecosystem on which

all life depends, a degradation that constantly reminds us that we are all

passengers on a spaceship, or, more ominously, a lifeboat" (p. XI)

"Globalization is a promise of efficiency in spreading the good things

of life to those who lack them. It is also a menace to those who are left behind,

excluded from its benefits. It means convergence and integration; it also means

conflict and disintegration. It is upsetting old ways, and challenging cultures,

religions, and systems of belief." (p. XI)

"In spite of many variations and differences, an ideological framework

can be composed so that globalization may serve the cause of humanity." (p. XV)

Structure:

The book is written in 5 chapters: The Phenomenon of Globalization, The

Collapse of the Old Paradigm, Global Leadership, The Basis for Global Consensus

and World Ideology: Variations on a Communitarian Theme.

Chapter 1: The Phenomenon of Globalization

"Globalization is the process whereby the world's people are becoming

increasingly interconnected in all facets of their lives - cultural, economic,

political, technological, and environmental." (p. 1)

"Japan typifies the Asian model in many respects. Its economy is

externally focuses; aims at gaining market share in the world economy through

exports. Most importantly, it is oriented toward strengthening its producers

rather than encouraging consumers." (p.10)

"Convergence is both forced and facilitated by global information

systems, televisions, faxes, fiber optics and the like." (p. 11)

"Americans have been ideologically averse to government involvement in

their lives, especially in the world of commerce, the domain of 'private

enterprise.' The theory was that firms competed against other firms in open

markets ... The Japanese and other cultures have shown that this view of the world

was not only unrealistic, but also a handicap. There, consortias of firms

cooperating with one another and with the government have emerged to become

fierce competitors" (p. 13)

"Globalization has clearly enriched the rich in the industrial worlds of

Asia, Europe and North America, but at the same time it has widened the gap

between rich and poor both within and among countries." (p. 23)

Chapter 2: The Collapse of the Old Paradigm

"The management of globalization and its tensions requires a global

consensus about purposes and direction." (p. 31.)

"The United States emerged from World War 2 all powerful and committed

to the establishment of a New World order. It took its economic supremacy for

granted..." (p. 38)

"It was not until 1993 - and then only at the urging of the Japanese

government - that World Bank economists reluctantly acknowledged that the East

Asian countries - Korea, Japan, Taiwan, Malaysia, Thailand and China - were

following a development strategy quite different from the one advocated by the

bank, one characterized by extensive government intervention..." (p. 44)

"Today the United States lacks an enemy, and there are four instead of

two centers of World Power: Japan, China, Europe and the United States. Asian

centers are growing fast; western ones are floundering." (p. 51)

"If the United States is to continue to organize collective leadership,

as many seem to want, it must strengthen itself and replace the old Cold War

paradigm with a new one." (p. 51)

Chapter 3: Global Leadership

"In spite of a substantially weaker economy and a more ambiguous moral

purpose, if any country is to lead the world into the twenty-first century, it

seems that it must be the United States - and that means both its government and

its multinational enterprises." (p. 61)

"A weak America cannot lead: It needs strength to be magnanimous and the

confidence to know and secure its vital interests. Only then can it negotiate

the instruments of global order with others." (p. 63)

"The Asian model gives government the important role of targeting for

special support those technologies and industries that are crucial to the

nation's future strength. The United States has always supported the industries

vital to the countries national security ... but only recently has it conceded

that it is proper to support other selected industries for the country's

economic security." (p. 69)

"The United States must - and has begun to - change its system in order

to make more effective use of its resources and to strengthen its economy. This

is important not only for Americans' standard of living, but also as a

prerequisite for America's leadership role in organizing the consensus required

to manage the tensions of globalization." (p. 73)

"The United States looks like a less-developed country, importing high-

value, high-tech products and exporting raw-materials and minerals." (p. 72)

"Japan's corporations have built national loyalty into their purposes;

other nations, including America, often do not. This difference has political,

social, and economic effects. A nationalistic corporation helps its nation,

perhaps at the expense of other nations. It designs its global operations to

maximize the benefits at home, such as high-paying jobs, skill development, and

future technological gains. By contrast, a non-nationalistic corporation designs

its operations strictly for the benefit of the corporation, unmindful of the

effects on the home country. It being unclear which procedure is more

competitive, both approaches will continue to flourish with important effects on

different communities." (p. 75)

"Theoretically, management's purpose in the United States is to satisfy

shareholders, but increasingly that purpose in unachievable unless at least

equal weight is given to the long-run interests of the managed and the

community." (p. 78)

The Basis for Global Consensus:

"Socialism and communism are dead. Capitalism reigns supreme. Such

conventional thinking is dangerously misleading. In fact, all three isms are

meaningless, replaced by mixtures of the three that differ radically among

national and regional communities. The mixtures have one thing in common: They

share a communitarianism, as opposed to an individualistic, ideology, even

though particular nations' versions of communitarianism differ widely." (p. 89)

"By the late Twentieth Century they (Capitalism and Socialism) dissolved

themselves by intermingling. Capitalist systems had adopted most of the aims of

Socialism - if not the means - and "socialist" systems realized that to reach

their lofty goals required many "capitalist" tools" (p. 98)

"We have already seen the United States, which is perhaps as

ideologically distant from Japan as any nation can be, changing its ways in a

Japanese-like direction in order to become more competitive. And the pressures

for ecological integrity are causing all nations to bow to certain global

constraints affecting property rights, the uses of property, the role of

government, and, most importantly, our perception of reality" (p. 108)

"National systems - economic, social and political - are being forced to

converge by two global forces: intensifying competition among the different

systems and pressures to preserve ecological integrity" (p. 109)

Chapter 5: World Ideology, Variations on a Communitarian Theme

"There will, of course, never be a single world ideology. There will be

as many ideologies as there are communities, but a variety of pressures are

pushing the nations of the world toward ideological homogeneity" (p. 111)

"The needs of the community (focusing on a national one, for example)

for clean air, and water, safety, energy, jobs, competitive exports, and so

forth are becoming increasingly distinct from, and more important than, what

individual consumers may desire." (p. 118)

"The role of the state in a communitarian society is to define community

needs and to insure that they are implemented. Inevitably, the state takes on

important tasks of coordination, priority setting, and planning. It needs to be

efficient and authoritative, capable of making the difficult and subtle trade-

offs among, for example, environmental purity, energy supply, economic stability

and growth, rights of membership, and global competition" (p. 120)

"The shape which communitarianism takes in different communities will be

formed by crisis. The task of leadership is to prevent crisis from becoming

catastrophe - to make maximum use of minimum crisis for maximum change. This

requires early perception and definition of community needs, and the artful

design of institutions and incentives to insure that they are met. It is also

the task of leadership to make the best of communitarianism." (p. 123)

Summary: From the Back of the Book

"Globalization is so mysterious," says Harvard Business School Professor

George Lodge, "that most examiners tend to approach it in pieces, using

economics, political science, or sociology to approach the subjects it covers.

There is no expert in globalization, nor will there ever be - unless he or she

is a special emissary from the divine"

Lodge's latest work, Managing Globalization in the Age of

Interdependence, is a compact, complete study. It recognizes the

interconnectedness of culture and communication, supply and demand, and the

environment and technology. It also examines the replacement of old, pre-Cold

War connections with new connections developed especially for the 21st Century.

Because of the increasing power of multinational companies and the key

role of business in managing globalization, Managing Globalization in the Age of

Interdependence should be required reading among corporate executives and

managers in every nation."

Call Number: 658.049 Lod

Source: Essay UK - http://www.essay.uk.com/coursework/managing-globalization.php



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