Globalization Guardian or Democracy

GLOBALIZATION: GUARDIAN OF DEMOCRACY? Globalization supporters argue that an amazing consequence of globalization has been the spread of democracy worldwide. In recent decades, the people of many nations have become better educated, better informed, and more empowered. Supporters say globalization has not sent democracy spiraling into decline but instead has been instrumental in spreading democracy to the world.

Backers of globalization also contend that it is instructive to take a long-term view on the issue of national sovereignty. Witnessing a sovereign state’s scope of authority altered is nothing new, as governments have long given up trying to control issues they could not resolve. In the

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mid-1600s, governments in Europe surrendered their authority over religion because attempts to control it undermined overall political stability. Also, Greece in 1832, Albania in 1913, and the former Yugoslavian states in the 1990s had to protect minorities in exchange for international rec- ognition. And over the past 50 years, the United Nations has made significant progress on worthy issues such as genocide, torture, slavery, refugees, women’s rights, children’s rights, forced labor, and racial discrimination. Like the loss of sovereignty over these issues, globalization supporters say lost sovereignty over some economic issues may actually enhance the greater good.31


1. What does the evidence suggest for each aspect of the debate over globalization and income inequality?

2. Summarize the claims of each side in the debate over globalization’s influence on cultures. 3. What are the arguments on each side of the debate over globalization ‘s impact on national


Why International Business Is Special As we’ve already seen in this chapter, international business differs greatly from business in a purely domestic context. The most obvious contrast is that different nations can have entirely different societies and commercial environments. Let’s take a moment to examine what makes international business special by introducing a model unique to this book-a model we call the global business environment.

The Global Busi.ness. Environment International business is special because it occurs within a dynamic , integrated system that weaves together four distinct elements:

1. The forces of globalization 2. The international business environment 3. Many national business environments 4. International.firm management

The model in Figure 1.3 identifies each of these elements and their subparts that together comprise the global business environment. Thinking about international business as occurring within this global system helps us understand the complexities of international business and the interrelations between its distinct elements. Let’s preview each of the four main components in the global business environment.

Globalization is a potent force transforming our societies and commercial activities in countless ways. Globalization, and the pressures it creates, forces its way into each element shown in Figure 1.3. In this way, the drivers of globalization (technological innovation and fall- ing trade and investment barriers) influence every aspect of the global business environment. The dynamic nature of globalization also creates increasing competition for all firms everywhere, as managers begin to see the entire world as an opportunity. At home and abroad, firms must re- main vigilant to the fundamental societal and commercial changes that globalization is causing.

The international business environment influences how firms conduct their operations in both subtle and not-so-subtle ways. No business is entirely immune to events in the international business environment, as evidenced by the long-term trend toward more porous national borders. The drivers of globalization are causing the flows of trade, investment, and capital to grow and to become more entwined-often causing firms to search simultaneously for production bases and new markets. Companies today must keep their fingers on the pulse of the international business environment to see how it may affect their business activities.

Each national business environment is composed of unique cultural, political, legal, and economic characteristics that define business activity within that nation’s borders. This set of national characteristics can differ greatly from country to country. But as nations open up and embrace globalization, their business environments are being transformed. Globalization can cause powerful synergies and enormous tensions to arise within and across various elements of




Globalization (ch. 1)

International Trade (ch. 5)



Cross-Cultural Business

(ch. 2)

Hiring and Managing Employees

(ch. 16)

International Strategy and Organization

(ch. 11)

Business- Government

.–~ Trade

Falling Trade/FD I Barriers

Increasing Competition

Relations (ch. 6)

Technological Innovation

a society. Company managers must be attentive to such nuances, adapting their products and practices as needed.

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