Perspectives on Globalization
chapter 2
PERSPECTIVES ON GLOBALIZATION chapter outline
™ Introduction
™ What is globalization?
Globalization of markets
Globalization of production
™ Methods of internationalizing operations
Outsourcing
Foreign direct investment (FDI)
™ Th eories of international business expansion
Early theories of FDI
Th eory of incremental internationalization
Dunning’s eclectic paradigm
™ Changing patterns of FDI
Destinations of FDI
Outward investors
™ Impact of globalization on societies
Economic impacts
Diff usion of technology
Global fi nancial markets
Culture change and globalization
Environmental impacts
™ MNEs and social impacts
™ Conclusions learning objectives
™ To evaluate contrasting views on globalization and its transformational eff ects on businesses and societies
™ To gain an overview of the means by which organizations expand internationally, in both markets and production
™ To appreciate leading theories of internationalization and foreign direct investment (FDI)
™ To examine critically the impacts of globalization on societies
9781403_945631_03_cha02.indd 37 19/9/08 15:11:36
38 part 1 THE INTERNATIONAL DIMENSION AND THE ORGANIZATION
Introduction
Impending closure of a car components factory in the province of Cádiz in Spain in 2007, by its American owner, Delphi, led to a wave of protests at the site, supported by political leaders, including the Spanish prime minister and the EU
Commission president. Th e workers’ trade union organized a two-day general strike, which paralysed business and transport across the region, achieving global media attention. In the end, the factory closed, aff ecting not just the
1,600 employees, but an estimated 4,000 people in the region who depended on
Delphi for business. By 2008, Delphi had relocated to Morocco, where wages are one-fi fth of Spanish levels. Scenarios like this have become commonplace, and are closely identifi ed with globalization, the topic of this chapter.
PERSPECTIVES ON GLOBALIZATION chapter outline
™ Introduction
™ What is globalization?
Globalization of markets
Globalization of production
™ Methods of internationalizing operations
Outsourcing
Foreign direct investment (FDI)
™ Th eories of international business expansion
Early theories of FDI
Th eory of incremental internationalization
Dunning’s eclectic paradigm
™ Changing patterns of FDI
Destinations of FDI
Outward investors
™ Impact of globalization on societies
Economic impacts
Diff usion of technology
Global fi nancial markets
Culture change and globalization
Environmental impacts
™ MNEs and social impacts
™ Conclusions learning objectives
™ To evaluate contrasting views on globalization and its transformational eff ects on businesses and societies
™ To gain an overview of the means by which organizations expand internationally, in both markets and production
™ To appreciate leading theories of internationalization and foreign direct investment (FDI)
™ To examine critically the impacts of globalization on societies
9781403_945631_03_cha02.indd 37 19/9/08 15:11:36
38 part 1 THE INTERNATIONAL DIMENSION AND THE ORGANIZATION
Introduction
Impending closure of a car components factory in the province of Cádiz in Spain in 2007, by its American owner, Delphi, led to a wave of protests at the site, supported by political leaders, including the Spanish prime minister and the EU
Commission president. Th e workers’ trade union organized a two-day general strike, which paralysed business and transport across the region, achieving global media attention. In the end, the factory closed, aff ecting not just the
1,600 employees, but an estimated 4,000 people in the region who depended on
Delphi for business. By 2008, Delphi had relocated to Morocco, where wages are one-fi fth of Spanish levels. Scenarios like this have become commonplace, and are closely identifi ed with globalization, the topic of this chapter.