Globalization Group Discussion Questions

Read the case Debating The Merits of Globalizations and in your groups, let’s discuss the case study questions below:
1. Do you think globalization and MNE activity are creating problems for the world? What kinds of problems can you identify? What are the unintended consequences of international business?
If all commercial decisions had an obvious and indisputable social benefit and a benign environmental impact, business leadership would be a great deal easier – and a lot less interesting.
Niall Fitzgerald, The Role of Business in Society – An Agenda for Action, A series of Thought Pieces by Business Leaders in Support of the Clinton Global Initiative http://www.hks.harvard.edu/m-rcbg/CSRI/publications/report_12_CGI%20Role%20of%20Business%20in%20Society%20Report%20FINAL%2010-03-06.pdf I do agree with the Problems are outlined by the Activist as listed below: 1. Disregard for human rights, basic labour standards. 2. Low wage factories – substandard conditions, exploited workers 3. Job ‘Losses’ – in the MNE country of origin 4. Environmental damage due to MNE’s using only the bare minimum to satisfy weak environmental standards 5. Harming cultural interests e.g. ‘McDonaldization’ 6. Stifling the growth of SME’s 7. Inequality –Widening the gap between the rich and poor
However, I would argue that these are hardly ‘unintended’ problems. MNE’s like any other enterprise are created with the aim of generating profit. Profit margins are increased by cutting costs. If a cheaper labour force is identified elsewhere is it not logical outsource these jobs? If a plant is less costly to construct in another country with a weak environmental standards, the clear choice, strictly in terms of business is rather clear.
To be clear, I do not in any way condone the disregard for human rights and wonton environmental damage. My point is simply that, in my opinion, it is not globalization forming the root of these problems but instead individual choices made by heads of MNEs. It is from this standpoint, that many voices both in the world of business and concerned outsiders advocate the concept of ‘corporate responsibility’- a sort of ‘honor system’ for MNE’s. Without a system to police these heads of Multi-national corporations and the wealthiest 5 % of the world’s population writing the rules on global business propriety corporate responsibility is an ideal to which few MNE’s will choose to live up.
2. Summarize the arguments in favor of globalization made by the business executive. What is the role of technology in supporting company performance in a globalizing business environment?
Arguments in favor of globalization made by the business executive: * provide better-paying jobs, * have more profits, * pay higher taxes, and * stimulate purchases * enhance local living standards, and * encourage global competitiveness * provide better benefits than non-exporting firms * amortize the costs of big projects. E.g. pharmaceutical firms R&D in the global marketplace. * uninterrupted international commerce is good “In the long run”
Role of Technology in supporting company performance in a globalization * communication – co-ordinating operations across countries requires constant communication between key players along the Value Chain. The dynamic nature of the global market makes fast and reliable forms of communication a clear necessity. * Production – decreasing product manufacturing time and costs (CAM,CAD), * Travel- lower costs for transportation of raw material and distribution of products * E-commerce and Internet

A powerful force drives the world toward a converging commonality, and that force is technology. It has proletarianized communication, transport, and travel. It has made isolated places and impoverished peoples eager for modernity’s allurements. Almost everyone everywhere wants all the things they have heard about, seen, or experienced via the new technologies.
The result is a new commercial reality—the emergence of global markets for standardized consumer products on a previously unimagined scale of magnitude. Corporations geared to this new reality benefit from enormous economies of scale in production, distribution, marketing, and management. By translating these benefits into reduced world prices, they can decimate competitors that still live in the disabling grip of old assumptions about how the world works.
The Globalization of Markets by Thedore Levitt ,Harvard Business Review

3. What is government’s role in protecting citizens from the potential negative effects of foreign MNEs conducting business in your country?
In researching this topic, there was a stark contrast between the apparent lack of information regarding governmental protection of citizens from the aforementioned negative effects, and the abundance of literature created to invite FDI.
While there exist policies in the Ministry of National Security restricting foreign nationals from engaging in work in Trinidad and thus, curbing loss of jobs due to MNE’s, there is still precious little to lead one to believe this to be an issue that has been subject to much debate at the governmental level. This is somewhat understandable for a young, post-colonial, resource-rich nation far more likely to outsource labour than have its labour force exploited. Take for example major Mas Bands having their costume designs made cheaply in China and having them shipped in to Trinidad for Carnival. This, in addition to the following excerpt, from a joint study on Corporate Responsibility in Trinidad, leads one to believe that MNEs will be free to do as they please until such negative effects become evident.

The Energy and Related Industries sector accounted for most of the expenditure on social and environmental programmes: The Energy and Related Industries sector, which comprises mainly subsidiaries of large foreign multinational companies, played the leading role in the provision of external social and environmental programmes, accounting for over 50% of the total money spent within the sample.
This sector also seemed to attract the best employees as a result of its engagement in a wide range of development programmes in
Trinidad and Tobago
Mapping Corporate Social Responsibility In Trinidad & Tobago,

4. What is the role of education in
(i) addressing the problems raised in the roundtable;
(ii) creating societies in which people can deal effectively with public policy issues;
(iii) creating citizens who can compete effectively in the global marketplace?
As a result of globalization and the interlinked increase in trade, FDI and technological advancement, education has become more and more important. Research by the UK’s Department for International Development examines the role of education in ‘successful’ engagement with the global economy where successis measured by export-led economic growth, plus income equality and peace.
It considered the characteristics of the path of development taken East Asian tiger economies – Hong Kong, South Korea, Singapore and Taiwan – and looked at the role of education in relation to strategies and action taken in other sectors. The research showed that:
While education is not necessarily the main factor, it is important in achieving successful forms of globalisation.
Education is a necessary component of development but economic and political policies are more important.
There is no ‘quick fix’ education solution for all aspects of development in all countries at all times.
It also showed that: * high quality education en masse, to bring marginalised and rural people into the national development agenda * expansion of secondary, technical and higher education to create the skills needed for economic growth * development of communication skills for international economic transactions * fair expansion of education to increase its contribution to social equality * awareness of the potential of education institutions’ official and hidden curricula to promote positive (and also negative) contributions to national unity.
Educated people tend to make the decisions and policies that influence economic globalisation and international agreements. Education provides people with the skills and values needed to succeed in economic globalisation and the minimising its negative impacts.
The role of education in ‘successful’ globalisation
Source(s):
‘Education and Development in a Global Era: Strategies for ‘Successful Globalisation’’, Department for International Development Education Papers 69, DFID: London, by Andy Green, Angela W Little, Sangeeta G. Kamat, Moses Oketch and Edward Vickers, 2007 (PDF) Full document.
Further details about this research project ‘Globalisation, Education and Development’ Full document.
Funded by: UK Department for International Development id21 Research Highlight: 5 April 2008