Syed Ferhat Anwar

Professor, IBA, University of Dhaka

 Global Awareness

• “It‟s only in our minds that we are

separate from the rest of the world.”

• Gay Luce, Psychologist

 United Nations Investment Trends Monitor
 WTO
 World Bank
 Disjuncture and Difference in the Global
Cultural Economy Arjun Appadurai
 The Global Ecumene Ulf Hannerz
 Multinational Organization Development, 1979,
Perlmutter, H.D.
 Globalization & Glocalization, Peter Beyer
 the “g-word”

• Globe (from L. globus) 1551 "sphere," "round

mass, sphere“
• Sense of "planet earth," or a three-dimensional
map of it first used in 1553
• Globalization first used in 1959
• 1962: the noun appears in the Oxford English
dictionary
• But three decades passed before G was
developed in social sciences as a paradigm
 Hyperinflation in the „g‟

• G is applied to almost everything

• “the most abused word of the 21st century”
(The Economist)
• G is both a discursive and a descriptive
concept – how we understand G has much to
do with our political views and theoretical
standing
• G is a terrain of conflicting discourses
 How to explain G?

• Because G has many layers and dimensions,

a good theory must explain its complexity
• A theory needs to be adaptable in defining
G because the world is changing: “a new
world society” is still being formed:
• The “global age” needs a new theory
 Theories of G
(Lechner & Boli, 2005)

• 1. World system theory

• 2. Neorealism/neoliberal institutionalism
• 3. World polity theory
• 4. World culture theory
 World System Theory (1 of 5)

• Reflected in readings from Immanuel

Wallerstein, Leslie Sklair
• In the 1950s, the dominant theory was
modernisation theory; its problem was that
some countries were not developing/
modernising as predicted – evidence did not
fit theory  hence...
 World System Theory (2 of 5)

• WST developed out of attempt to explain the

failure of certain states to develop
• Looking at Latin America, their economies
could not compete, global capitalism forced
certain countries into under-development
• Trade is asymmetrical
• Poor countries are dependent on rich states
 World System Theory (3 of 5)

• Key concepts:
• CORE: rich & developed states
• PERIPHERY: poor & dependent states
• SEMI-PERIPHERY: the „in-between‟ tampon
zone; semi-industrialised states
• Semiperiphery keeps the system stable
 World System Theory (4 of 5)

• Trade & investment concentration

• The core dictates the terms of trade
• Dependency makes the situation of peripheral
states even worse (they may even lose their
political autonomy)
• The world system perpetuates dominance by the
core & dependency of the periphery
• G perpetuates inequality – global economic system
is inherently unfair
 World System Theory (5 of 5)

• International organisations do not influence

the fundamental position of core and
periphery because most NGOs and MLOs
are created by core countries
• The idea that governments and international
institutions can make the system „fair‟ is an
illusion (because they always reflect
interests of capitalists)
 Neorealism (1 of 4)

• Realism and Neorealism dominant in global

relations theory for several decades
• Realism‟s central claim: states are dominant actors
in world politics; driven by desire to survive and
become more powerful (war, military competition)
• Critique of R: states no longer in constant struggle
for survival; economic and social issues matter; R
better suited to explain 18th and 19th c. situation
 Neoliberal institutionalism (2 of 4)

• Reflected in Robert Keohane & Joseph Nye:

complex interdependence
• Critical response to realism:
• G produces a more complex system of
interdependent states; societies are interconnected
in many ways; power and security are not the only
thing that matters – states interact over many
different kinds of issues
 Neoliberal institutionalism (3 of 4)

• Military force is no longer seen as being

central to inter-state relations; international
organisations are the centre of global politics
• To understand global politics, we have to
study what goes on in international
organisations (e.g. WTO)
 Neoliberal institutionalism (4 of 4)

• World society contains many centres of power;

there is no one, single power hierarchy
• Transnational rules and organisations now have
much more influence
• States are still important but the system is one of
interdependence - other organisations also
influence world politics in critical ways
• The use of force is less effective; no hierarchy of
issues exists that would be the same for all states
 World polity theory (1 of 3)

• Developed in response to modernisation

theory, WST and R
• Reflected in John W. Meyer et.al.
• Polity = activities and associations of the
public, political sphere
• World polity = political structures,
associations and culture in the international
sphere
 World polity theory (2 of 3)

• Contrary to observations of other theories, WPT is

focused on the fact that societies have been
becoming more similar in terms of their
government and state policies
• Isomorphism:
• “trying to account for a world whose societies ...
are structurally similar in many unexpected
dimensions and change in unexpectedly similar
ways”
 World polity theory (3 of 3)
• States govern on the basis of cognitive models (which come
from the culture and society) – associations, MLOs and
NGOs and other states transmit models of how to govern
• Worldwide models are constructed and reproduced through
global cultural and associational processes – “models
embedded in an overarching world culture”
• States modify their „traditions‟ in the direction of “world-
cultural forms/prescriptions/principles”
• WPT is based on a totally different theory of action: it
emphasises the influence of norms and culture – not power
 World culture theory (1 of 2)

• A response to world polity theory

• Reflected in Roland Robertson, Arjun
Appadurai, Ulf Hannerz
• World culture is new and important BUT it is
not as homogeneous as WPT claims
 World culture theory (2 of 2)

• World society is a complex set of relations among many

different units in the “global field”
• People are becoming aware of the new global reality – the
problem of how to live together in one global system
• G compresses the world into a single entity; the emphasis is
on cultural compression – all cultures are becoming
subcultures within a larger entity = “global ecumene”
• This does not mean homogenisation but “organisation of
diversity
 Effect of Globalization on Society

• Material standards of living

• Life expectancy
• Medical treatment
• Economic growth
• Job Opportunity Shifts
• Globalization has been defined in business
schools as the production and distribution of
products and services of a homogenous type
and quality on a worldwide basis.
• Why?
• the fact that foreign sales account for more
than 50 per cent of the annual revenues of
companies such as Hewlett Packard, IBM,
Johnson and Johnson, Mobil, Motorola, Procter
& Gamble, etc..
 Globalization is a process of economic, political
and cultural integration and unification.

 Globalizationinvolves many countries and

majority of huge enterprises.
 Definition by National Council on Economic
Education
 “emergence of an interdependent global
economic system with growing political,
technological, and cultural linkages
connecting individuals, communities,
businesses, and governments all around the
world.”
 The World Is Flat by Thomas Friedman
 Defines Globalization by breaking down the
eras of change that have occurred worldwide
throughout time and that have affected virtually
everyone‟s space.
 Understand the history of nation to assess
impact of globalization
 Globalization Eras

• First Era of Globalization (1.0)

– 1492 – 1800
• Second Era of Globalization (2.0)
– 1800 – 2000
• Third Era of Globalization
– 2000 - ???? (3.0)

– The World is Flat

 Global Integration Forces (1 of 2)

Driving Forces
• Technology
• Culture
• Market Needs
• Costs
• Free Markets
• Economic Integration
• Peace
• Strategic Intent
• Management Vision, Strategy and Action

SFA
 Global Integration Forces (2 of 2)

Restraining Forces
• Culture
• Market Differences
• Costs
• National Controls
• Nationalism
• Peace vs. War/ Stability
• Management Myopia
• Organization History
• Domestic Focus
• Political Strength

SFA
 Advantages

Reducing the
Developing Enhancing probability of
international information beginning a
trade and speed war
companies
 Disadvantages

Great
dependence Extreme
Unemployment of one pollution of
country on enviroment
others
 Globalization
• Globalization is interdependence.
 Global Business (1 of 4)

• EPRG
– Ethnocentric (Home Country orientation)
• Domestic strategies are superior, applied to foreign markets
– Polycentric (Host Country Orientation)
• Decentralized management, affiliates manage their market
– Geocentric (World Orientation)
• Integration of worldwide marketing with no bias towards home
or host country
– Regiocentric (Regional Orientation)
• Region viewed as a single market
 Global Business (2 of 4)

• EPRG Framework (Dr. Howard V. Perlmutter, Wharton)

– "The more one penetrates into the living reality of an
international firm, the more one finds it necessary to give
serious weight to the way executives think about doing
business around the world.“
– Organizational world views shaped by how company was
formed, CEO's leadership style, administrative processes,
myths and traditions
– These orientations determine the way strategic decisions
are made and relationship between headquarters and
affiliates
 Global Business (3 of 4)

Ethnocentric Polycentric

Regiocentric Geocentric
EPRG Characteristics
 Global Business (4 of 4)

EPRG
• Does not exist in the purist form
• Only geocentric organization decides on
marketing adaption or standardization?
– Ethnocentric with surplus product?
– Regiocentric uses same ads?
– Polycentric insists on branding standards?
Global Competitive Index

I N N O VAT I O N D R I V E N

EFFICIENCY
DRIVEN

FA C T O R D R I V E N
SFA ACBA, IBA
 Countries that..

Compete based on FACTOR ENDOWMENTS

Sell Basic Products
PRICE competition
Low productivity, low wages
Room for MASSIVE Growth

FA C T O R D R I V E N
SFA
..focus shifts to QUALITY
of Products

Rising income levels

EFFICIENCY DRIVEN
Yo un g w o r k in g p o p ula t io n

SFA
 I N N O VAT I O N D R I V E N
Finally..

Compete based on N O V E LT Y

HIGH Standard of Living

High R&D and Innovation

Ageing Population

Little Growth Potential

SFA
FA C T O R D R I V E N E C O N O M I E S : O V E R V I E W

G D P Pe r C a p i t a 5 0 4 U S D •
•
Bangladesh
India
Pakistan
G D P G row t h R a t e 5 . 4 6 % •
• Vietnam
• Cameroon
Po p u l a t i o n G row t h 2 % • Ethiopia
• Ghana
M e d i a n A ge 21 years • Kenya
• Nigeria
Av g. S c h o o l i n g 6 . 5 y e a r s • Tanzania
• Uganda
G ov t . S p e n d i n g 24 . 6 %

SFA
 FA C T O R D R I V E N E C O N O M I E S a r e . .

• High Factor Endowment

• Very low GDP/Capita
• Unskilled labor pool
Homogenous Factors
• Poor Infrastructure
• High Growth Rates
• VERY LOW Network Readiness
score(1 to 3)

SFA
 EFFICIENCY DRIVEN ECONOMIES: OVERVIEW

G D P Pe r C a p i t a 24 2 0 U S D •
•
China
Indonesia
Thailand
G D P G row t h R a t e 4 . 6 1 % •
• Egypt
• South Africa
Po p u l a t i o n G row t h 0 . 2 % • Bulgaria
• Romania
M e d i a n A ge 35 years • Ukraine
• Serbia
Av g. S c h o o l i n g 9 years • Columbia
• Peru
G ov t . S p e n d i n g 35%

SFA
 EFFICIENCY DRIVEN ECONOMIES are..

• Low-to-Medium GDP/capita
• Moderate Growth Rates Homogenous Factors
• Younger Demographics
• Relatively Skilled Labor Force
• Goods Market Efficiency and Buyer
Sophistication

SFA
 I N N O VAT I O N D R I V E N E C O N O M I E S : O V E R V I E W
• USA
• Switzerland
G D P Pe r C a p i t a 2 6 5 0 0 U S D •
•
Singapore
Germany
Italy
G D P G row t h R a t e 1 . 8 6 % •
• France
• South Korea
Po p u l a t i o n G row t h 0 . 1 6 % • Japan
• Norway
M e d i a n A ge 41 y e a r s • Sweden
• UK
Av g. S c h o o l i n g 11 years Ireland
• Denmark
G ov t . S p e n d i n g 45% •
•
Australia
New Zealand

SFA
 I N N O VAT I O N D R I V E N E C O N O M I E S a r e . .

• High GDP per capita

Homogenous Factors
• Ageing population
• Stagnant population growth
• Sluggish economic growth
• Leaders in terms of competitiveness
• Technologically advanced
• High in business sophistication

SFA
 Additional Dimension

From 3 to 5 segments

Efficiency Innovation
Factor Driven
Driven Driven

Efficiency Innovation
Factor Driven
Driven Driven

Factor >> Efficiency to

SFA Efficiency Innovation
 FA C T O R T O E F F I C I E N C Y S TA G E : O V E R V I E W

G D P Pe r C a p i t a 1 67 0 U S D
• Azerbaijan
G D P G row t h R a t e 4 . 9 8 % • Bhutan
• Philippines
Po p u l a t i o n G row t h 1 . 5 % •
•
Sri Lanka
Iran
M e d i a n A ge 27 years •
•
Algeria
Angola
Morocco
Av g. S c h o o l i n g 8 y e a r s •

G ov t . S p e n d i n g 32%

SFA
 FA C T O R T O E F F I C I E N C Y S TA G E H A S . .

• High to moderate growth Homogenous Factors

• High population growth
• Relatively young demographics
• Improved education levels
• Improvement in infrastructure

SFA
 E F F I C I E N C Y T O I N N O VAT I O N S TA G E : O V E R V I E W

G D P Pe r C a p i t a 6 0 0 0 U S D • Brazil
• Argentina
G D P G row t h R a t e 3 . 7 2 % • Chile
• Poland
Po p u l a t i o n G row t h 0 . 2 % •
•
Russia
Malaysia
M e d i a n A ge 35 years •
•
Kazakhstan
Mexico
Croatia
Av g. S c h o o l i n g 1 0 y e a r s •
• Turkey

G ov t . S p e n d i n g 36%

SFA
 FA C T O R T O E F F I C I E N C Y S TA G E H A S . .

Homogenous Factors
• Rising income level
• Skilled workforce
• Falling population growth rate
• Ageing population
• Impressive infrastructural development
• Technological advances

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The additional politico-economic
paradigm
OIL BASED ECONOMIES: OVERVIEW
G D P Pe r C a p i t a 1 7 0 0 0 U S D
G D P G row t h R a t e 3 % • Qatar
• Saudi
Po p u l a t i o n G row t h 1% Arabia
• Libya
M e d i a n A ge 30 years • U.A.E
• Venezuela
Av g. S c h o o l i n g 8 . 5 y e a r s
G ov t . S p e n d i n g 36%

SFA
 OIL-BASED ECONOMY HAS..

Homogenous Factors
• High income per capita
• High level of primary education
• Increasing population size
• Needs to focus on Innovation and business
sophistication

SFA
 16% decline in foreign direct investment
worldwide between 2016 and 2017
 Developing economies in Asia received 30% of
global FDI inflows
 The value of cross-border M&As declined by
23%, despite a 44% increase in value of cross-
border M&As in developing economies.
 Greenfield-project value declined 32% to $573
billion, the lowest point since 2003
 Global Marketing Outlook (1 of 2)

Mistaken assumptions about LDC

1. The poor have no money.
2. The poor will not “waste” money on non-essential
goods.
3. Entering developing markets is fruitless because
goods there are too cheap to make a profit.
4. People in BOP (bottom of the pyramid) countries
cannot use technology.
5. Global companies doing business in BOP countries will
be seen as exploiting the poor.

SFA
 Global Marketing Outlook (2 of 2)
Theory of International Product Life Cycle (IPLC)

(0) – Local innovation, (1) – Overseas innovation, (2) – Maturity,

(3) – Worldwide imitation, (4) - Reversal

Exporting
Other advanced nations
LDCs

0 1 2 3 4

USA (initiating country)

Importing
Source: Sak Onkvist and John J, Shaw, “An Examination of the International Product Life Cycle and
Its Application within Marketing”, Columbia Journal of World Business 18 (Fall, 1983)
SFA
 Strategic option for Globalization

Go Global Create the ideal multimedia Status

environment to attract world-
class companies to use
Quo
markets as a hub

Enhance Leapfrog into

domestic success in the
productivity Create value from
Information Age
Information Age
businesses

Catalyze a highly competitive cluster of

Lead Bangladesh IT companies that become
Focus
world-class over time
Regional
SFA Domesti
c
The Dependency Explanation for How the Rich Exploit the Poor
As the diagram suggests, multinational corporations from rich countries set up shop (invest) In
Third world countries, usually with assistance from wealthy Third World capitalists (the “core in
the periphery”). Profits from the MNC operations in the periphery are then sent back to the
home country leaving the peripheral country not better (or even worse) off than before the
investment.
 Glocalization (1 of 3)

• A culture that easily absorbs foreign ideas and

global best practices and melds those with its
own traditions has the greater advantage in the
flat world.

– The World is Flat by Thomas Friedman

 Glocalization (2 of 3)

• Objective of Glocalization
– Find the optimal combination of integration and
rationalization of operations in a global market
• Find synergies, adapt for the rest

• Think Global, Act Local

– Most important is to decide which strategic
elements should or must be standardized or
adapted and to what extent, under what conditions
and when
 Glocalization (3 of 3)
• Outward cultures
– Open to change
– New technology welcomed
– Equality for women
– How well does it glocalize?
• Inward cultures
– More intangible characteristics
– Degree of trust
– Concern for the masses
– Investments at home vs investments abroad
– Indifferent to their own poor
 Global Marketing Strategy Framework

Standardized Localized
Communication Communication
Strategy Strategy

Standardized Global Strategy Glocal Strategy

Product/Service

Localized Glocal Strategy Local Strategy

Product/Service
 Standardization or Adaption?

• Standardization
 Assumes homogenous markets and in response offers
standardized products and services using a
standardized marketing mix
• Adaption
– Takes into account the inherent diversity in the
global marketplace and adapts the marketing mix
to fit the local culture, preferences, laws and rules,
infrastructure and competition
 Standardization (1 of 2)

• Transfer of company‟s best, proven ideas

– Learning curve
• Economies of scale
– Production, Marketing, R&D/development
• Simplification
• Greater control
• Consistency
– Easier to maintain uniform brand identity
 Standardization (2 of 2)

• Millward Brown study found that just over one in 10

successful ads did equally well in another country
– truly cost efficient cross-border campaigns?

• Marketing Science Institute study showed distribution and

price sensitivity across European countries
– Commodity product
– More mass communication, more price sensitive
– Increased distribution of high quality product effective in
less economically developed areas
 Adaption

• Specialization
– Directly address consumer preferences
• Allows for consideration of cultural, legal,
social, economic issues
• Use local marketing knowledge
– More targeted advertising
– Strategize against competition
– Aware of logistical opportunities
 Standardization or Adaption?

• Under what circumstance can a company

in Country X sell its product in Country Y
without changing product, price, place, or
promotion and earn a suitable return?
 Reality (1 of 2)

• It is rare to find a completely standardized

marketing mix
 The theory of standardization works on a strategic level, often
not suited for the detail required on an operational and
tactical level

• Standardization and adaption should be

evaluated as two ends of a spectrum
– Which marketing mix elements should be standardized or
adapted and to what extend
 Reality (2 of 2)

• Perspective of Contingency
– Instead of total standardization or total adaptation, this
perspective seeks a balance
• The degree of standardization is determined by the external
environment and internal organizational factors
– “Companies that operate in foreign markets should
have eclectic abilities to seek integration, sensitivity
and learning on the global scale at the same time, and
standardization and adaption should not be evaluated
as approaches that cannot be coordinated.”

Source: Jain, 1989; Cavusgil et al., 1993

 The information and communications technologies enabling
the global knowledge economy–so-called cyber infrastructure
(the current term used to describe hardware, software,
people, organizations, and policies) evolve exponentially,
doubling in power for a given cost every year.
 Many leaders, both inside and outside the academy, believe
that these forces of change will so transform our educational
institutions–schools, colleges, universities, learning
networks–over the next generation as to be unrecognizable
within our current understandings and perspectives.
 Some of the several possibilities are:
• The Global University
• Lifelong Learning
• Meta University
• Universal Access to Knowledge and Learning
 Standardization or Adaption?

• Reality is that pure standardization and pure

adaption don‟t really exist, and they shouldn‟t
– Global marketing is too complex for simplistic
answers

• Most important is to decide which strategic

elements should or must be standardized or
adapted and to what extent, under what
conditions and when
– Strategy and execution are equally important
 Bangladesh and Globalization (1 of 2)

SFA
 Bangladesh and Globalization (2 of 2)

 Pharmaceuticals  Human Capital – Education

– Skill Based
– Generic including Bio Similar – Knowledge Based
– Integrated by Value Chain – Innovation & Research
Demographic Shift
 ICT  Banking
– Clustering strategy  SME based
– Integrated business  Service vs manufacturing
 Light engineering
 Garments  Plastics
– Cross Border  Furniture
 Clustering
 Development  Transit
– Largest contributors in peace – Distribution & Shipping
keeping  Agriculture
 Processing
– IT based development agenda  Jute
– Showcase in SDG
SFA
We may have different religions, different languages,
different colored skin, but we all belong to one human race.

If globalization is to succeed, it must succeed for poor and

rich alike. It must deliver rights no less than riches. It must
provide social justice and equity no less than economic
prosperity and enhanced communication.

Kofi Annan