Globalization and Multinational Enterprises

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Survey of the Theories of
GLOBALIZATION

by
Wendy M. Jeffus
Southern New Hampshire University

TABLE OF CONTENTS

I. INTRODUCTION

II. Internationalization versus Globalization
Multinational Enterprises
Exporting
Licensing/Franchising
Strategic Alliances
Joint Ventures
Wholly-Owned Subsidiary
Emerging Economies
Developed Economies
Universalizers versus Particularists
World-systems
Diversity of Cultures
Global Mindset

III. HYPERGLOBALIZATION
Conflicting Goals
Environmental Consequences
Social Consequences
Extended Product Responsibility
Subsidies and Preferential Treatment of the Corporation Lack of Accountability
Misaligned Incentives
Short-term Profits
Money versus Spirituality
Borderless Economy
Liberalization
Conflicting Goals
Misaligned Incentives
Short-term Solutions versus Long-Term Growth
Protection of Natural Resources
Lies, Damn Lies, & Statistics
Standardization versus Adaptation
Regional Focus
New Paradigm

IV. GLOBALIZATION AND STRATEGY
Global versus Multidomestic Strategies
Service Industry
Common Global Misunderstandings
Developing and Implementing a Global Strategy
Organizational Culture

V. GLOBALIZATION AND PUBLIC POLICY
Approaches to Economic Organization
Historical Review
Determinants of Economic Organization
Corporate Political Strategy
International Environmental Policy
Performance Requirements
Global Political Economy
International Financial Markets
International Relations

VI. Globalization as a Discourse
Capitalist Globalization
Democracy and Free Markets
Corporate Environmentalism

VII. Globalization as an empirical phenomena
Nationalities of Corporations
Information and Communication Technologies and the Digital Divide

I. INTRODUCTION

This survey seeks to address theories of globalization. Globalization has been defined by the International Monetary Fund (IMF) as the increasing integration of economies around the world, particularly through trade and financial flows. (IMF, 2000) As economies become integrated issues emerge with regards to the benefits and costs of such integration and which outweighs the other. The first section “Internationalization versus Globalization” addresses this debate. It begins with a definition of the multinational enterprise and corporate globalization in its many forms and goes on to address the role of globalization in both developed and emerging economies. The way in which managers perceive globalization’s costs and benefits has an affect on corporate decisions to expand abroad. The first section concludes with the idea of a “global mindset” described by Gupta and Govindarajan (2002).

Hyperglobalization
The next section discusses “Hyperglobalization.” The views of David Korten, a strong critic of corporate globalization, are compared to the views of Kenichi Ohmae and Theodore Levitt, who both support globalization. Korten’s book When Corporations Rule the World discusses the conflicting goals between the environment and corporate growth. He also attributes corporate growth to increasing social problems such as a widening gap between the poorest and richest citizens. He calls for extended product responsibility that includes the environmental consequences of production and condemns the subsidies and preferential treatment that corporations receive when expanding abroad. In addition, he believes corporate managers have a lack of accountability for their actions, misaligned incentives which focus only on short-term profits. Finally, he posits that money and spirituality are incompatible.

On the other hand, Ohmae looks at the reality of an increasingly borderless economy...
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