Article Review 1

Journal Article Review

Tyler Feldman
Course: MGT 213 March 1, 2015

Article Citation

Foroohar, R. (April, 2014). Globalization in Reverse. Time, Vol. 183 Issue 12, pg. 28.

Summary

Globalization is often defined as the free movement of goods, people and money across borders. That definition is often under threat by many different sources. In fact over the past two years global trade growth has been lower than that of the global GDP growth. This is the first time this has happened since World War 2.

There are many factors that contribute to the slow growth rate of global trade. A few of the main factors are with Europe struggling to end its debt crisis and that emerging markets are expanding slower than they previously were. The biggest factor, however, is that the U.S. is no longer the global consumer of last resort. The U.S. does not act like the giant sponge, absorbing excess goods, like they once did.

This is not necessarily a bad thing for us. This means were are producing more goods and services, such as oil and gas, and buying less foreign goods. But, in order for the U.S. government to keep growing we will need to continue to produces electronics, cars and other goods we also buy. Unfortunately with other economies hurting it appears that not many are willing to take that chance to produce such goods.

Seemingly this is causing globalization to be in reverse and many economists and trade experts are talking about a new era of deglobalization.

Analysis
Purpose: It appears that globalization is not the force that it once was. With economies struggling is it actually causing deglobalization shown by the fact that global trade growth is slowing. This could be a good thing for domestic U.S. companies as it means that more manufacturing in the future could take place right here on American soil.

Question
At the end of the article the author made some key points about the new rules of the global economy. It pointed out that the global economy is changing as global trade growth slows. It raises the questions of how leaders are going to handle this change to keep there economies/companies growing and not lagging.

Concepts
Globalization
Global Strategy
Outsourcing
Offshoring

Implications
If corporations are not ready and willing to change to meet the needs of a changing economy they may have a hard time competing.

Topic Consistency

This article is a nice compliment to chapter 6 in the text book, Internal Management. The article discusses globalization and how it is changing which is covered in chapter 6. Managing a global corporation can be a tough task especially when the global trade growth is slowing. This can lead to tough decision from management on whether to continue global trade or if they should possibly deglobalize and stop or lessen their global trade.

Learning and Commentary

The biggest and most important thing I learned from this article is the fact that the global trade growth is slowing. Nowadays it seems that if you don't globalize you are missing out and not taking advantage of a good opportunity. This article had made me realize that globalization is not always the answer to growing a company. As the economy is changing to companies look to gain a competitive advantage they might have to use other strategies than globalization. This article has taught me that as a manager you have to constantly monitor many different global and non global factors that could affect your business. They also have to adjust their processes of business to reflect the changes occurring in that environment.