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AN ECLECTIC REVIEW OF
CRITICAL PERSPECTIVES ON
GLOBALISATION AND
INTERNATIONAL BUSINESS:
SETTING THE CONTEXT FOR
CORPORATE SOCIAL
RESPONSIBILITY AND
SUSTAINABILITY
permitted under U.S. or applicable copyright law.
Maria Alejandra Gonzalez-Perez
ABSTRACT
Purpose – The chapter aims to provide a descriptive and analytical
conceptual framework of critical approaches to globalisation and
summarises the main debates in the area.
Design/methodology/approach – This chapter is based on an extensive
literature review.
Principles and Strategies to Balance Ethical, Social and Environmental Concerns with
Corporate Requirements
Advances in Sustainability and Environmental Justice, Volume 12, 21–50
Copyright r 2013 by Emerald Group Publishing Limited
All rights of reproduction in any form reserved
ISSN: 2051-5030/doi:10.1108/S2051-5030(2013)0000012007
21
Findings – This chapter summarises diverse critical approaches to
globalisation from a multi-disciplinary perspective. It presents theories
EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 7/23/2019 4:33 PM via UNIVERSIDAD EAFIT
AN: 549266 ; Gonzalez-Perez, Maria Alejandra, Leonard, Liam.; Principles and Strategies to Balance
Ethical, Social and Environmental Concerns with Corporate Requirements
Account: s1088130
Copyright © 2013. Emerald Group Publishing Limited. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair
22 MARIA ALEJANDRA GONZALEZ-PEREZ
explaining the negative consequences of globalisation on working

opportunities, conditions and relations, and the negative consequences of
globalisation at the economic, cultural, social and political level
(particularly the perceived decline in state influence).
Practical implications – This chapter provides an overview on the debates
on globalisation. This chapter could contribute discussions at the classroom
level, and different managerial learning circles.
Originality/value of chapter – This chapter contributes teaching material for
international business, trade and development, and corporate social
responsibility
Keywords: International business; corporate social responsibility

APPROACHES TO GLOBALISATION
Since the 1990s, globalisation has become one of the most contested, complex,
cliche´ and contradictory topics in the social sciences.
A number of authors coincide in defining globalisation as the process of the
extension of the free market, embodying a political, social, cultural and
economic revolution, which transcends previous nation-state boundaries and
preceding sovereignties (Buckley & Ghauri, 2004; Held, Goldblatt, & Perraton,
1999; Hood & Young, 2000; Kali & Reyes, 2007; Mazlish, 2005; Rugman,
2009; Shenkar, 2004). Robert W. Cox (2005, p. 140) presents globalisation, or
Global Perestroika as he calls it, as a ‘result of structural changes in capitalism,
in the action of many people, corporate bodies, and states, that cumulatively
produce new relationships and patterns of behaviour’. William I. Robinson
(1998, pp. 563–565) defines globalisation
asaformofcapitalismwhichsupersedesthenation-stageofcapitalism,which is
overcoming all precapitalist traces and ‘integrating the various polities, cultures
and institutions of national societies into an emergent transnational or global
society’ (Robinson, 1998, p. 565).
Kelly and Prokhovnik (2002) identify three major social science approaches
for analysing economic globalisation. The first approach is an evidence-based
approach to a systematic shift, in which, since the 1970s, cross-national trading
and investment have developed in a more integrated and intense manner than in
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Critical Perspectives on Globalisation and International Business 23
the past. The second approach proposes that interconnectedness tends to revolve
around particular developed regions. The third approach suggests that nothing
fundamental has changed.
The discourse of globalisation is presented by various social theorists as a
consequence of modernity,1 and Westernisation, and a feature of it is
compression of the dimensions of time and space in a radical transformation
never achieved before (Castells, 1996; Giddens, 1990; Massey, 1999;
Mittelman, 1996). Castells (1996, p. 92) defines the global economy as ‘an
economy with the capacity to work in real time on a planetary scale’. Brenner
(1999, p. 40) suggests that ‘space no longer appears as a static platform of social
relations, but rather as one of their constitutive dimensions; it is historically
produced, reconfigured and transformed’.
The worldwide interconnection of capital markets is one of the most
controversial aspects of globalisation (Liesch, Buckley, Simonin, & Knight,
2012). This interconnection means that the performance of national capital
markets depends on global financial markets’ behaviour. The integration of
capital markets has opened the possibility of investment in multiple foreign

markets. This new opportunity is one of the key features of global financial
integration and has led to the dramatic increase in net private capital flows from
the North2 to developing countries (O’Brien, 1992). However, despite this, there
is little evidence to prove a relationship between financial integration and
growth (Prasad, Rogoff, Wei, & Kose, 2003). The informational aspect of the
economy is also expressed in the increasing expansion of the volume of
financial transactions. Increased financial volatility reflects the interdependence
of events occurring worldwide (Giddens, 1999). Finance is embedded within all
the elements of production chains and factors of production (Dicken, 1998).
Castells (1996, 1999) notes that the economy operates as a worldwide unit in
real time, and the unprecedented roles of communication and information
technology have stimulated new sources of productivity and organisation of
work. The information economy is defined as the supporting infrastructure
(computers, routers, satellites, human programmers, etc.), which sustain
electronic business processes (online selling, buying, production management,
logistics, etc.) and the conduct of electronic trading through computer-mediated
network channels (Mesenbourg, 1999). This technology and information-driven
economy is an integral component of the social development of the world
(Castells, 1999).
Sceptical views on globalisation argue that globalisation as an economic
phenomenon is not a recent event. The world has experienced continuous
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changes in the nature of markets, massive flows of international human

migration and involvement of foreign currencies in international transactions
systematically since the nineteenth century. The outgrowth of social and
institutional changes during the first technological/industrial revolution in Great
Britain in the late eighteenth and early nineteenth century including innovations
such as applying steam power to transportation, mining and powered machine
production as well as the second technological/industrial revolution associated
with the spread of electricity and advances in physical sciences such as
chemistry, and the transition of technological leadership from Great Britain to
Germany and the United States are cited as examples by sceptics to justify the
lack of uniqueness of the current era of ‘globalisation’. Economic globalisation
is presented under this point of view as a historical phenomenon rather than a
consequence of recent technological transformations (Anto´ n, 2000).
Furthermore, globalisation sceptics (Gordon, 1988; Hirst & Thompson, 1996,
2000) hold that the idea of a worldwide economy is an unattainable utopia. The
argument is that even though there is evidence showing a tendency towards
regionalised (free trade) economies, such as the European Union, the South
American Common Market (Mercosur), Asia-Pacific Economic Cooperation
(APEC), the North American Free Trade Agreement (NAFTA), amongst others,
the idea of a planetary economy is still far from reality. While technological
changes and planetary economic integration are acknowledged, sceptics argue
against the conclusion that a drastic transformation of the nature of markets is
occurring (Hirst & Thompson, 1996, 2000; Levitt, 1983; Keohane & Nye, 2000;
Radice, 2000).
Beyond changes to economic factors, the idea of globalisation also reflects
cultural transformations (Leung, Bhagat, Buchan, Erez, & Gibson, 2005). The
process of cultural interdependence of geographically dispersed human beings,
interconnected through the Internet and its World Wide Web, as well as other
media, redefines values at a local scale and at the individual level. Personal
aspects of our lives, our private sphere, are challenged every day, by the
penetration of standardised ‘global’ values.
The current concept of globalisation is bursting with contradictions.
According to some authors, the participation in the world capitalist system leads
to development in some areas but the development of underdevelopment 3
elsewhere (Brewer, 1990; Castells, 1997; Frank, Cockroft, & Johnson, 1972).
On the other hand, the possibility of acquiring goods has been given to poor
people who otherwise would not have access to them (Drogendijk & Andersson,
2012; Marler, Kaufman, Festing, & Liang, 2012). For example, in a case
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presented by Stiglitz (2002), the opening up of the Jamaican milk market to US

imports in 1992 meant poor children could get milk more cheaply, but this also
hurt local dairy farmers. Globalisation has also brought factories to many places
in the developing world giving people employment alternatives to farming as the
only source of labour occupation (Stiglitz, 2002). However, both globalisers and
anti-globalisers share the same paradigm: we are in a globalising world. The
divergence is on how to act within it (Kumar & Liu, 2005).
Just a few years ago, subjects such as structural adjustment loans and banana
quotas4 had limited interest (Stiglitz, 2002). Now, social movements have
networked their resistance against globalisation (Amin & Houtart, 2003).
Since the protest in 1999 at the World Trade Organisation (WTO) meetings in
Seattle, followed by meetings and protests in Quebec, Bangkok, Barcelona,
Geneva, Johannesburg and recently Hong Kong, every major meeting of the
International Monetary Fund (IMF), the World Bank and the WTO has become
a scene of conflict and turmoil with protestors aiming to expose capitalism and
its neoliberal version as a source, in their view, of social, cultural and ecological
disasters (Amin & Houtart, 2003; Florini & Simmons, 2000; IFG, 2002; Stiglitz,
2002; Taylor, 2002; Welford, 2002).
Stiglitz (2002)5 analyses the globalisation agenda of advanced industrial
countries in relation to developing countries as one in which more advanced
industrial countries insist that developing countries open up their markets to the
goods of the wealthier countries while at the same time declining to open their
own markets to the goods of developing countries. Continuing subsidies to
agriculture in the more advanced industrial countries and those countries
insistence on the elimination of subsidies on industrial goods makes it difficult
for developing countries to compete. This has reduced countries opportunities
for cultural adaptation to the rapid pace of change, and it has created a crisis of
massive unemployment followed by longer-term problems of social dissolution
such as urban violence and ethnic conflicts (Castells, 1983; Stiglitz, 2002).
GLOBALISATION AND FOREIGN ECONOMIC

INTERVENTION
FDI has been studied from different angles since the 1960s; these include
corporate behaviour in the multinational context (Pauly & Reich, 1997), the
transfer of organisational culture (Florida & Kenney, 1991), the political conflict
over FDI (Yoon, 1990) and the location decisions of multinational corporations
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(Dickens, 1998). Research from economic and public policy analysis

backgrounds has shown that FDI provides many benefits such as higher wages,
higher compensation packages, greater job security and bigger investment in
training and development than indigenous employers (Borensztein, Gregorio, &
Lee, 1998; Lipsey, 2002; Moran, 1998; Potterie & Lichtenberg, 2001).
However, Brady and Wallace (2000) found that ethnographic studies in the area
show less optimistic results concerning the working conditions in foreign-
affiliated firms. Despite the fact that some theories such as ‘the New
International Division of Labour’6 are pessimistic when explaining the
repercussions of FDI on less developed countries (LDCs), other theories argue
for the long-term benefits for LDCs measured in terms of their technology
development through patented technology transfer. Capital flow volatility and
subsequent economic crises have been associated with different forms of FDI
(Buckley & Ghauri, 2004; Peng, Denis, Wang, & Jiang, 2008; Prasad et al.,
2003; Tonguthai, 1995).
Another form of foreign economic intervention is foreign aid through
international development agencies. One of the main criticisms of the

distribution of foreign aid is in regard to the conditions that international lenders
impose in return for their assistance. It has also been argued that foreign aid
programmes enlarge dependence by maintaining a metropolissatellite structure
where surplus is concentrated in the metropolis (Brewer, 1990). Another
criticism, associated with international donors and multilateral agencies such as
the World Bank and the International Monetary Fund (IMF), is that the
conditionality associated with their assistance and adjustment programmes
undermine national sovereignty since it is based on economic dogmas and fails
to take into account the particular characteristics of the borrowing country
(Stiglitz, 2002).
Another controversial aspect of globalisation has been the economic ideology
behind it. This is often is described as neoliberalism, because it is presented as
an effort to revert to the economic policies of classical liberalism in the
eighteenth and nineteenth centuries. It is described as the replacement of an
import-substitution industrialisation model, and it is linked to the Washington
Consensus and the structural adjustment programs mandated by the IMF and
World Bank (Korzeniewicz & Smith, 2000). Rodrik (1996) classifies the
Washington Consensus policies as follows: fiscal rectitude via cuts in
government expenditure and increased taxation; limited government
intervention in education, exports and infrastructural development; undistorted
market prices; privatisation; free trade and competitive exchange rates.
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Dependency Theory argues that there are intrinsic power relations between
nations which explain the underdevelopment of many nations in the world
(Casillas, Moreno, & Acedo, 2012; Drogendijk & Andersson, 2012). National
development in nations regarded as dependent is reliant on external forces
through which advanced industrialised countries represent their interests in
foreign nations (multinational companies (MNCs), foreign aid, etc.).
Dependency theory7 suggests that the ‘First World’ needs countries in the
periphery in order to remain wealthy, establishing a bimodal system composed
of cores and peripheries. This implies that there was no initial state of
‘underdevelopment’ for so-called ‘Third World’ countries and their ‘backward’
condition is a consequence of the incessant intensification of imperialist
exploitation since the sixteenth century (Angotti, 1981; Drakakis-Smith, 1996).
This theory emerged in the 1950s, and during the 1960s and 1970s was used as a
counter to modernisation theory, which implies that the ‘developed’ nations
have a decisive role in modernising and creating sustainable development in
underdeveloped nations.
The Industry of Development
There has never been consensus on the meaning of development. The

westernised idea and model of development has been used as an agent of
economic and cultural hegemony, and some authors (Hancock, 1989;
Korzeniewicz & Smith, 2000; Stokke, 1995; Tavares, 2003; Wood, 1989) argue
that development as a construct is used to justify colonisation.
Development aid has been a highly controversial subject. Defenders of such
aid argue, firstly that aid provides emergency assistance and debt relief and that
if well administered its provision can produce longterm improvement in areas
such as health, human rights, education, etc. and secondly, that it can be seen as
an exercise of interdependence in which both donors and recipients can pursue
their respective interests. On the other hand the rationale against aid is based on
arguments such as (i) aid has been used by authoritarian governments to
consolidate their power, meaning it has little effect on the poor; (ii) it is used to
divert the attention from issues such as trade, debt and the role of transnational
companies (TNCs); (iii) aid creates dependency, thus weakening the political
and economic position of aid recipients; (iv) it distorts the free market; (v) aid is
often subject to conditions that oblige recipients to buy goods and services from
the donor; (vi) the donor–recipient dynamic reinforces stereotypical superiority
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and racism; (vii) aid maintains world inequality rather than challenging it; and
(viii) aid is often displaced or misused.
Transnational Corporations
Robinson (1998) points out that a major consequence of the globalisation of the
international economy is the transformation of MNCs into TNCs. MNCs are
often portrayed as the ‘most prominent, controversial symbols of western
capitalism’ (Litvin, 2003, p. xi). Over the last century they have gained power at
every level of human activity. In fact, there are several industries in which
corporate power is immensely concentrated. The International Forum on
Globalisation (IFG) (2002) identified for example, that in consumer durables,
automobile manufacturing, aircraft manufacturing, aerospace, electronic
components and steel industries, five firms control over 50 per cent of the global
market (IFG, 2002, p. 123). Evidence of corporate power is even more
compelling in industries such as agriculture in which production and distribution
is dominated by few global corporations; consequently, to a high degree, the
world’s food supply is subordinated to corporate control; and consequently self-

reliant, community-based, diversified and small scale agriculture has been
largely replaced by export-oriented monoculture (IFG, 2002, p. 172).
SUMMARY OF THE DEBATE ON GLOBALISATION

Held (2002) and his colleagues (Cochrane & Pain, 2002; Kelly & Prokhovnik,
2002; Mackay, 2002; McGrew, 2002) categorise participants in the debate on
globalisation into three positions: the globalists, the inter-nationalists and the
transformationalists.
The Globalists
The globalists, both optimistic and pessimistic globalists, see globalisation as a

stage of development which cannot be controlled by traditional political
institutions such as nation-states. For globalists there is a major shift in the
geography of social processes and social relations manifested in an increase in
global interconnections. Thus, national boundaries became less important. For
them, national cultures, economies and politics are subsumed in global
networks.
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Optimistic globalist positions are based on Marshall McLuhan’s (1962)

‘Global Village’ and the vision of global citizens using the resources of global
communication technology towards human understanding among peoples
around the world, thus improving the quality of life through social relations at a
global scale, in an atmosphere of global flows of culture, the possibility of
universalistic initiatives towards the solution of global environmental problems
and the creation of hundreds of millions of jobs in progressive workplaces. In
short, the benefits for consumers in choices and market efficiency and the
increasing wealth in rich economies would have a positive effect in less
developed countries in the form of FDI.
In contrast, the pessimistic globalists find problematic the worldwide
tendency towards homogeneity. They call attention to the dominance of the
major political and economic interests of the countries of the North, highlight
the excessive power of TNCs, note the uneven effects of globalisation and
lament the diminution of national identities and sovereignties.
The Internationalists
For internationalists or ‘sceptics of globalisation’ (Gordon, 1988; Hirst &

Thompson, 1996, 2000; Weiss, 1997, 1998), globalisation is a myth since the
world economy as an international system is ruled by the interactions of nation-
states rather than by any global entity. They emphasise the significant role for
nation-states, especially powerful states, as autonomous agencies able to
determine their own political and economic priorities. In addition, they are
sceptical about globalisation, viewing the borderless world as depicted by
globalists as an exaggerated allegory. Internationalists do not find substantial
differences between current economic and social interactions and those in the
past. They see continuity and progression in world trade links in which the
majority of social and economic activity is still regional (e.g. the European
Union). In terms of challenging global inequalities, internationalists argue that
resistance can be effective in defending different interest groups’ priorities over
global business development agenda.
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The Transformationalists
Transformationalists (Castells, 1996, 1997, 1999; Giddens, 1990) share with the
internationalists the view that the nation-state remains militarily, economically
and politically powerful. They acknowledge the presence of growing constraints
on the autonomy of nation-states by forms of unaccountable transnational power
(the need to compete in global markets or TNCs). However unlike
internationalists, they argue that these forms of transnational power are
exercised through a complex combination of interconnections in the areas of
communication, economic activity, technology and governance.
Transformationalists recognise that this has brought new forms of exclusion and
stratification which determine the integration into global networks. The
solutions presented by transformationalists for the forms of exclusion linked to
globalisation are based on a system of democratic accountability and a global
system for governance.
NEGATIVE CONSEQUENCES OF GLOBALISATION

The next sub-section will provide an overview of some of the negative
consequences of globalisation. For structural purposes, they are classified into
workplace-related and ‘beyond-workplace’ consequences of globalisation.
However, it is important to clarify that this distinction does not imply that they
are wholly separated from each other.
Although the case for globalisation counts several points in its favour, the
majority of the people of the planet are still poor and have not seen the benefits
of economic integration. Growing economic disparities have been accentuated
since the 1970s, and the world has experienced a concentration of political and
economic power, a growing lack of public control over larger corporations, the
diminution of national sovereignties and rural migration to urban areas
undermining traditional rural societies.
WORKPLACE-RELATED EFFECTS
This sub-section presents the effects of globalisation on working relations and
working conditions.
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The pressures associated with global competition have led local management
and governments to adopt measures to promote job flexibility through threats of
relocation of production. The consequences of these measures are income and
occupational insecurity, which have an impact on individuals and households as
well as national and regional economies. Thus, the big issues in economic policy
at present are related to the labour market (Freeman, 1998; Marler et al., 2012).
Some authors (Jacobson, 1998) differentiate the typical responses to these
pressures into low and high road strategies to highlight variations in
capital/labour relations and the organisation of production.
A low-road strategy (race to the bottom) is associated with cost leadership in
companies, industries, regions and countries. Typically, it is found in sectors,
industries and countries dominated by low-skill, low-pay employment, low trust
levels and low participation. This approach suggests that production processes
can be persistently improved using measurements 8 which translate into reduced
costs. This viewpoint implies that production costs can always be cut. Those
which have adopted this approach generally use traditional methods of
production leading to maximisation of production using time- and cost-related

metrics. This approach has been generally adopted by companies dedicated to a
single product, in which repetition becomes their production advantage. Since
the metrics of this type of production are grounded purely in production cost
reduction, David Jacobson (1998) notes this strategy attempts to increase
productivity without increasing wages, something which has the potential to
exacerbate social conflicts and to encourage confrontational managerial styles.
Therefore, this approach tends to be associated with antagonistic labour
relations.
The low road strategy is often associated with a ‘race to the bottom’9 in the
form of threats of relocation of production to lower-wage localities. In order to
remain competitive, firms or countries are forced to lower labour conditions and
mechanisms for workers protection in order to reach lower production prices
than their competitors.
Another approach to competing and surviving in the global markets is the
high road.
The high road approach suggests that companies, countries and regions can
remain competitive through constant innovative practices that are reflected in
both the production process and the product itself (Jacobson, 1998). This
approach requires participation, commitment and cooperation of all the
stakeholders to effect changes and a constant drive to respond to the
requirements of the most competitive of world markets (Jacobson, 1998). The
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ultimate logic in this approach is that goods and services can compete with their
rivals based on quality rather than price. This means that economies need to give
incentives to the best rather than to the cheapest.
At the organisational level, the high road strategy requires high levels of
social cohesion, team-based production and a multi-skilled and multifunctional
labour force (Jacobson, 1998). In order to achieve this, organisations have to
ensure they use the best human and technological resources available.
Yet rising levels of productivity can lead to downsizing and unemployment,
the link between rising productivity and employment downsizing 10 has been
explained by pressures from shareholders to increase stock value and dividends
by implementing cost-saving measures such as downsizing and threats to
downsize (Budros, 1997). The logic behind this is that since low productivity is
often explained by inefficiencies in human resources, if inefficient personnel are
cut this would increase productivity, since those who are left need to
continuously prove that they contribute towards the productivity of the
companies.11 In addition if productivity rises while sales remain constant, fewer
employers are needed.

In reality, the organisation of people and work in most firms is somewhere
between the high and the low road (Jalette & Warrian, 2002; Jacobson, 1998).
Both roads can coexist as one is focused on cost reduction and the other on
flexibility. Jacobson (1998) comments that globalisation has brought challenges
to firms’ organisation that are reflected in choosing a place on that spectrum.
Therefore, locations can suffer from both the consequences of the low road and
the high road.
Changes to Labour Relations
Besides changes in work organisation presented in the previous sub-sections,

globalisation has led to the involvement of new social actors in addition to the
traditional industrial actors. Also different forms of cooperation (internally and
externally) have accelerated structural changes associated with technology and
new forms of organisation for both labour and firms. Topics such as human
resources management, social dialogue and social protection policies have been
brought to the top of the current agenda in international industrial relations
(Marler et al., 2012; Stahl, Chua, & Pablo, 2012).
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WORKERS REPRESENTATION
Traditionally industrial relations consisted of a network of institutionalised
relationships between employees and their representatives (trade unions),
employers and their representatives (employers’ associations) and the state
(Hoffmann, Hoffmann, Kirton-Darling, & Rampeltshammer, 2002). These
relations existed on different levels and between different actors. For instance,
negotiations about wages, working hours and conditions of work were
conducted at the level of the company (between work councils or shop stewards
and management), the sector (between trade unions and employers’
associations), the national level (national pacts) and the European level (between
European trade unions and European employers’ associations through social
dialogue) (idem.).
Gradually, the issue of cooperation and managerial practices has moved to the
centre of the discussion on labour markets. National shared governance
approaches – such as the Irish social partnership, 12 the Scandinavian model of
competitiveness and welfare, the Swedish model and its support for change, the
Dutch polder model of the consensus economy – have been responses designed
to enhance competitiveness (Jacobson, 1998; Vos, 2004).
There are different types of industrial relations practices. Trade unions play
different roles and have different natures in different countries, and industrial
relations systems are embedded in specific national contexts (Hoffmann et al.,
2002; Hyman, 2001). Richard Hyman distinguishes ideal types of (European)
trade unionism based on the principles of market, class and civil society; these
are business unionism, class unionism and social partnership unionism. He
argues that these three types are inherently contradictory, and consequently, they
will never be stable models and further argues that market-based unionism or
business unionism, which has the capacity to avoid political issues, is not
sustainable. He asserts that class unionism, while waiting for the revolution, has
no focus on material results. On social partnership unionism he believes that it is
unable to continue to seek for integration. Hence, Hyman (2001) explains that
trade unions’ historical tendency has been to compromise between the optimistic
tradition (revolutionary), and the pessimistic (non-revolutionary) tradition. For
Hyman, union challenges exist on two fronts: an economic front in which trade
unionism is a reaction against economic exploitation, and a political front, since
power and control are inherent aspects of every collective bargaining.
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Discrimination and Inequality of Opportunities
Globalisation has accentuated the vulnerabilities of marginal groups. Castells’

(1999, 2000) ‘Fourth World’ is a concept that describes the increasing
equalities, polarisations,13 poverty and social exclusion present in the global
economy. He explains the concept of the Fourth World as the ‘the world
composed of people, and territories, that have lost value for the dominant
interests in informational capitalism’ (Castells, 1999, p. 10). For Castells (1999)
the people of the Fourth World are those who neither produce nor consume for
the system.
In the following sub-sections, the challenges that globalisation has
accentuated for marginalised groups of working people – foreign and migrant
labour, child labour and female labour – will be looked at.
THE CHALLENGE FOR FOREIGN AND MIGRANT

LABOUR
International population flows are as influential as capital and trade flows. The
International Organisation of Migrations (IOM) estimates that more than 210
million people are living outside their birth country, which is about 3 per cent of
the world’s population (IOM, 2011). The liberalisation of economies and the
related higher demand for labour in the developed economies and availability of
labour in underdeveloped economies has provoked an increase in labour
migration across borders. This has been facilitated by the development of
transportation and communication technologies which enable and motivate
people to move. Globalisation gives employers the opportunity to hire migrant
workers as part of their cost minimisation strategies and also allows them to
recruit skilled labour in sectors which face labour shortages. Services industries
such as the hotel and restaurant, software, insurance and financial industries are
the main employers of migrant labour.
The literature on international labour migration has three main strands. The
first strand focuses on the socio-economic aspects in receiving countries
(immigration). The second strand concentrates on the same aspects but from the
point of view of sending countries (emigration). Finally, the third strand is
associated with studies concerning return to the native country.
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There is plenty of evidence to show that immigrant workers across the world
are crucial to economic success (Berry & Bell, 2012; BaldwinEdwards &
Arango, 1999; Lamphere, 1994; Lopez-Garza & Diaz, 2001; Hollifield, 1992;
Waldinger & Lichter, 2003). However, the social, political, cultural and
economic standing of many immigrant employees is inferior to that of most
indigenous people (Borjas, Freeman, & Lawrence, 1996; Butcher & Dinardo,
1998, Cobb-Clark, 1993; Stelcner, 2000; Zegers de Beijl, 1995). Many
immigrant workers experience exploitation, injustice and almost second-class
citizenship status (Reitz, 1998). Galbraith (1992, 2001) argues that there is a
societal division between the millions of both legal and illegal immigrant
workers in the United States and US nationals. It is taken for granted that
immigrant workers will have access only to low paid, low-skilled and peripheral
occupations (Hernandez-Leon & Zun˜ iga, 2000; Zegers de Beijl, 1995). In
practice, immigrant status often means a lack of knowledge about the labour
market, the availability of jobs or skills requirements. In addition, cultural and
language barriers often leave immigrant workers exposed to inequality, and a
cycle of social and economic disadvantage can become self-perpetuating (Beiser

& Hou, 2000; Chiswick, 1992; Dustmann, 1999; Milkman, 2000; Wells, 1996).
Central to the promotion of workers’ rights is the organising capacity of trade
unions and their ability to represent immigrant workers. Compa (2001) argues
that in case of the United States the undocumented/illegal status of the workers
is a limitation on the exercise of the right of association; therefore, fear and
division are present when a group of undocumented/ illegal workers is deprived
of protection, and this has an adverse effect on all workers’ rights to negotiate
and to bargain collectively.
The phenomenon of migration can be also observed from an emigrant country
perspective. The literature suggests that emigration tends to be socially and
economically detrimental for those who stay behind, especially in developing
countries in which acquisition of skills increases the propensity to emigrate.
This can be measured in terms of income per capita. Some authors (Bhagwati &
Hamada, 1974, 1982) have observed that as most skilled workers tend to be the
largest contributors as taxpayers, the absence of them has adverse consequences
for redistribution to lower layers of society. Traditionally, it has been assumed
that the native country does not receive compensation for the cost of having
invested resources in the skills acquisition (in the form of human capital) in the
emigrant.
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CHILD LABOUR AND GLOBALISATION

The relationship between globalisation and child labour is evident in developing
countries (Chaudhuri, 2011; Estevan & Baland, 2007). With lax labour policies
and abundant unskilled labour in these countries, employers often prefer child
labourers because they are cheaper than adults and nonwage benefits such as
pensions and health insurance are almost non-existent (Dwibedi & Chaudhuri,
2010; Neumayera & Soysaa, 2005; Palley, 2002). Child labour can, therefore,
reduce costs, making a country less expensive and more attractive to potential
foreign investors (Palley, 2002; Rodrik, 1996).
The ILO estimates that 306 million or 19 per cent of all children between 5
and 17 years of age were economically active in the year 2008 (Diallo,
Hagemann, Etienne, Gurbuzer, & Mehran, 2010). The majority of these children
are working in activities that are likely to harm their health, safety and moral
development. Most of these children live in developing countries, and the vast
majority of them in South Asia and sub-Saharan Africa. The ILO 14 has identified
the elimination of child labour as an essential element in the pursuit of universal

social justice. It is almost universally agreed that child labour is an unacceptable
practice, and currently most of the labour agreements, both voluntary and
regulated, include provisions for the radical and systematic abolition of child
labour.
CHALLENGES FOR WOMEN

The literature shows that the major victims of globalisation have been women
and unskilled manual workers (Moghadam, 1999; Neumayer & Soysa, 2011).
Ronald Oaxaca (1973) argues that culture, tradition and overt discrimination are
part of the social structures which perpetuate the unfavourable occupational
distribution of female labour in relation to males and also create and sustain
gender pay gaps.
Disparity in the resources and opportunities available to men and women is a
worldwide phenomenon, although it is most rampant in developing countries.
This has an early explanation in childhood because boys consistently receive a
larger share of education and health spending than girls. Consequently, girls in
many developing countries obtain limited education and training and poor health
and social services. As a result, women have fewer employment opportunities,
especially in the formal sector. Additionally women who work outside the home
Account: s1088130
often also bear a disproportionate share of the responsibility for household

chores and childrearing (GenderStats, 2012).
Some authors (Moghadam, 1999; Sassen, 1998; Standing, 1999) argue for the
existence of a relationship between globalisation and the feminisation of wage
labour. The increasing importance of foreign direct investment and openness to
trade induces developing countries to keep labour cost low. A female labour
force is often cheaper than a comparable male one.
The concept of feminisation of labour has two meanings. The first meaning
concerns the increased participation of women in the world labour market and
access to occupations which were traditionally reserved for men. The second is
the tendency towards precarious working conditions historically associated with
women – low pay, low security, irregular hours – which affects both men and
women. In the second sense the concept of feminisation of labour has a
pejorative connotation (Moghadam, 1999; Standing, 1999) and is associated
with the low road.
CONSEQUENCES OF GLOBALISATION BEYOND THE

WORKPLACE
Cultural Imperialism
Critical theorists (Downing, Mohammadi, & Sreberny-Mohammadi, 1995;

Mohammadi, 1995; White, 2001) have argued that colonisation is not just
appropriation of places but also establishing control of people’s minds through
the imposition of culture. The imposition of values, worldview, lifestyles, music,
TV, films and the ideology of consumerism describe the dominance of US
culture (Downing et al., 1995).
Another sub-type of cultural imperialism is linguistic imperialism. The
supremacy of the English language as a global language is characterised by a
‘continuous reconstitution of structural and cultural inequalities between English
and other languages’, through social structures institutions, financial allocations
and ideologies (Phillipson, 1998, p. 104). The use of English as a global
language can marginalise a population whose first language is not English and
leads to the cultural hegemony of native English speaking populations
(Phillipson, 1998). Another of the arguments against the uncontrolled spread of
global languages (such as English and Spanish) is the regular occurrence of the
Account: s1088130
‘linguicide’15 of minority languages and the associated effects of lost cultural

and religious heritage.
Another sociological phenomenon associated with globalisation is the process
of cultural assimilation, which envisages full incorporation of ethnic minorities
into the society and state through a process of individual change in which
individuals abandon their distinctive linguistic, cultural and social characteristics
and take on those of the dominant group (Leung et al., 2005; Rumbaut, 1997).
This assimilation is mainly associated with immigrants and their descendants
(Alba & Nee, 1997).
Environmental Damage
The consequences of globalisation on the environment vary depending on the

particular commodity and geographical area of production (Donaghy, 2012).
However, significant trade-related environmental impacts include: expansion of
agricultural land, intensification of production, pressure onnatural
resources(e.g.soil andwater),andchangesin agricultural habitats (IEEP & GHK,

2005). The environmental concerns associated with globalisation are extensive.
They include: reduction of biodiversity, artificial modification of species and
habitats, human overpopulation, trade of ‘improved’ seeds, impacts from
transportation and shipping activity, the AIDS pandemic, water and air
pollution, waste management, biotechnology and genetic engineering and
property rights. These issues are on the agendas of environmentalists and other
activists, policy makers, the media and researchers.
Before the industrial revolution, most greenhouse gases were of natural origin
and the human population had no control over them (Guttman, 1994). However,
the last half century has experienced unprecedented, large-scale anthropogenic
alterations to natural biophysical systems,16 the consequences of accelerating
changes in demographics, economic activities, and social and political relations
(McMichael et al., 1999). These discussions reflect the increasing level of fear
associated with the lack of certainty about the magnitude of these drastic
changes and the risk associated with it. Furthermore, ever-increasing human
consumption, exploitation of resources, waste disposal problems, and other
features of export-oriented production, such as global transportation activity, are
common bases for arguments asserting that economic globalisation is
intrinsically harmful to the environment (IFG, 2002).
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The relationship between trade and the environment is very complex; it

requires a broad understanding of the range of variables. Kahuthu (2006) uses
data from 84 countries at different stages of development, covering the period
19602000. He finds a significant relation between income per capita and CO 2
emissions, indicating that economic growth leads to environmental degradation.
His study also indicates that, in the case of CO 2 emissions and forest cover
change, there is a direct association between the rate of country’s integration
into international markets and deterioration of its environment.
The environmental consequences of liberalised trade have been extensively
discussed by environmentalists and trade policy makers (Copeland & Taylor,
2005; Panayotou, 1997; Ribot, 2006). It cannot be denied that economic growth
has an interdependent relationship with the environment, since production and
consumption processes are embedded in the environment.
Since the 1950s, environmental theories have suggested that environmental
problems with cross-border implications, such as acidification, destruction of
stratospheric ozone and global warming require supranational cooperation and
international agreements (Barrett, 1994; Bratberg, Tjøtta, & Øines, 2005;

Copeland & Taylor, 2005; Frankel, 1993; Hoel & Schneider, 1997; Panayotou,
1997). The limitations of international environmental agreements (IEAs) have
been generally attributed to the free rider problem. This makes it difficult to
trade-off between economic growth and environmental quality (Frankel, 1993;
Hoel & Schneider, 1997; Stern, Common, &
Barbier, 1994).17
Unfair Trade
This sub-section of the chapter focuses on the consequences of globalisation for

trade. At one pole of the debate are academics (e.g. Dollar & Kraay, 2002) and
organisations and policy makers such as the World Bank and the IMF who argue
that open markets, fiscal discipline and other liberal economic policies raise
income of all the members of the society. At the other pole of the debate are
those (e.g. Drakakis-Smith, 1996; Watkins, 2002; Weller, Scott, & Hersh, 2001)
who argue that potential benefits of economic growth especially for the poor are
undermined or counterbalanced by increases in inequality that accompany
economic growth. Stiglitz (2002, p. xv) has argued that the ‘hypocritical
policies’ of advanced industrial countries in relation to trade openness
undermine the potential benefits of trade. While promoting trade openness for
Account: s1088130
the rest of the world, advanced industrial countries have maintained protectionist
policies for their own producers, most notably to protect the interests of farmers.
This explains the discussions over agricultural subsidies in the international
arena. The issue of agricultural subsidies is very complex. In the WTO meeting
in Cancun in September 2003 it was proposed that the European Union, the
United States and other industrialised countries remove agricultural subsidiaries
in order to alleviate world poverty and make competition fairer. This proposal
has been seen by environmental groups and other opponents of free trade in the
developed world as detrimental to the functions that agriculture has in ensuring
food security, cultural, environmental and social values.
Regions (and nations) dependant on few goods are vulnerable to shifts in
prices and technological changes (Dornan, 2002). Also, trade can be impeded or
facilitated by fluctuations in currency exchange rates. Participation in free trade
agreements is not necessarily free of costs, since trade agreements have tacit or
explicit coercive distributional threats, set by the most powerful participant(s).
Consequently poor nations’ well-being (military protection, food and energy
supply, technological progress, economic infrastructure, etc.) depend

substantially on other, economically powerful nations.
Trade liberalisation leads to import competition, and to growing use of the
threat to move production to lower-wage locations, thereby depressing wages
and jeopardising living standards. Also, deregulated international financial
markets have led to short term capital flows; and at the same time constrain and
limit the capacity of governments to control and contain crises. Moreover,
economic disruption disproportionately harms the poor and aggravates income
inequality.
PERCEIVED DECLINE IN STATE INFLUENCE

Linda Weiss (1997, 1998) claims that since the 1990s the world and the social
sciences are experiencing a phenomenon of ‘state denial’. This is expressed in
theses and arguments that perceive a diminution or displacement of states as
powerful actors in both the domestic and international spheres.
Globalist authors argue that since globalisation is not tied to a defined
geographical space, it threatens nation-state sovereignty. Those who define the
globalised economy as stateless corporations, borderless finance, footloose
technology and cross-border flows of people and products without historical
Account: s1088130
precedent have assumed that national governments are powerless in the face of
transnational capital. On this position, the global economy is composed of just
transnational capital and markets; therefore the capacity and relevance of
national governments is undermined (Weiss, 1998), forcing states to adopt
similar economic, social policy and low-taxing regimes (Weiss, 1997).
However, for transformationalists, globalisation does not necessarily represent a
decline in the influence of the nation-state but implies the networking of its
social functions in its jurisdiction, a negotiation of its share in the ‘international
sphere’ and the allocation of resources locally and globally for the purpose of
legitimising the belief that it represents the interests of its citizens. In other
words, globalisation challenges the nation-state in its role as citizens’ interests’
representative, with its governance entering in competition with the global
system and its other forms of representation for civil society. Some authors
(Matten & Crane, 2005) argue that there is an erosion of governmental roles in
liberal citizenship. This is increasingly manifested in liberalised societies,
dominated by corporations with government actors replaced by corporate actors.
It is expressed in the form of corporate involvement in social rights via

community projects, privatisation of public services, and definition of civil
rights to the corporation’s benefit.
Castells (1996) introduces the term ‘network state’ (Castells, 1996, p. 5) to
explain a new political form of the ‘information age’, in which governance
depends on the interaction between nation states, local and regional government,
NGOs and supranational structures. In the 1990s nation-states were transformed
from sovereign subjects into strategic actors (Castells, 1997). For example, the
creation of the WTO in 1994 and previously the General Agreement on Tariff
and Trade (GATT) were designed to ensure that trade flows in a predictable and
smooth manner by negotiating global trade rules between nations.
Reduction of state ownership has been accomplished through privatisation.
The effect on the market capitalisation and trading volume of stock markets
around the world has been enormous since 1981 when privatisation by public
share offerings began to be pursued actively (Megginson, Price, & Netter,
1998).
The decline of state influence is a contested argument in the debate on
globalisation. On one side, there are those who argue an integrated global
economy with unprecedented mobility of FDI, financial capital, people, goods
and services, in which power is held by markets and transnational capital, and
therefore states have restricted influence. On the other side are those who argue
that nation-states play a critical role since national institutional frameworks
Account: s1088130
dictate the factors that underpin economic growth. Weiss (1997, 1998)
summarises the second perspective arguing that if cost-reduction was the driving
force behind this so-called ‘unprecedented mobility’, then we could expect to
see all FDI moving to low-cost developing countries but this is not the case.
Hence, competitive advantage remains framed within national structures more
than ever because of the cost of technological innovation and upgrade and
attraction and development of knowledge-intensive labour; the increasing
importance of physical proximity between producers and supplies; and the inter-
dependency of domestic links and social networks (Porter & Kramer, 2002;
Weiss, 1997, 1998).
ACKNOWLEDGEMENT
Author would like to thank feedback received by reviewers and by Prof.
Dr. Terrence McDonough at the National University of Ireland, Galway.

NOTES
1. ‘Modernity refers to modes of social life or organisation which emerged
inEurope from about the seventeenth century onwards and which subsequently
became more or less worldwide in their influence’ (Giddens, 1990, p. 1).
2. When reference is made to countries in the North, this usually refers to
advancedindustrial countries, or OECD members, as opposed to ‘developing
countries’.
3. Opponents of the Dependency Theory have argued that underdevelopmentin
the Third World is mainly a consequence of internal factors. Dependency Theory will
be briefly discussed in the section on globalisation and foreign economic intervention.
4. Banana quotas are limits that some European countries impose on theimporting
of banana from countries other than their former colonies.
5. For Stiglitz (2002) globalisation is a process partially driven by forces
manipulated by the interests of supranational institutions such as the IMF, WTO and
the World Bank.
6. The New International Division of Labour (NIDL) argues that in
capitalistsystems production is fragmented through specialisation of tasks and
different phases of the industrial process are dispersed to peripheral regions in order
to provide ‘the most profitable combination of capital and labour’ (Fro¨ bel,
Heinrichs, & Kreye, 1980, p. 14).
7. The main proponents of the Dependency Theory are Prebisch (1979), Frank
(1977), and Cardoso and Faletto (1971), Immanuel Wallerstein, who defined the
theory of ‘world systems’, and Amin (1976).
Account: s1088130
8. Increasingly managers and other ‘observers’ have access to technologies

andstatistics in order to measure and compare their practices against their own
performance and to benchmark them with their competitors.
9. The ‘race to the bottom’ implies a downward pressure on labour
standards,which is particularly evident in countries with the most stringent standards.
This discussion has taken place in the literature on labour, social, environmental
issues, policy advocacy and grassroots activism in reference to social and
environmental dumping.
10. Budros (1997, p. 230) defines downsizing as the conscious use of permanent
reduction of personnel with the objective to improve effectiveness and/or efficiency.
11. The ‘Big Three’ in the automobile industry (General Motors, Ford
andChrysler) led the use of downsizing to increase productivity, and then other
nonindustrial firms followed the model.
12. The Irish Social Partnership is a unique scheme in the European Union of a
setof three frameworks of agreement since 1987 on workplace partnership between
the state, the trade union movement and employers to spread consensus-based
involvement within firms and workplaces. The economic boom in Ireland known as
‘Celtic Tiger’ has been at least in part attributed to this Social Partnership. Roche
(2007) summarised positions in relation to it, and he found that although some US
scholars (McKersie, 1996; Sabel, 1996) have a positive prognosis of the Irish model,
some Irish researchers (D’Art & Turner, 2002; Gunnigle, 1997; O’Dowd, 2006;
Roche & Geary, 2000; Williams, Blackwell, Gorby, O’Connell, & Russell, 2004)
have expressed scepticism.
13. Polarisation is defined by Castells (2000) as a specific process of
inequalitywhich occurs when both the bottom and the top of the income scale grows
faster than the middle. Thus, the middle shrinks, maximising social differences
between the two segments.
14. The Minimum Age Convention (No. 138) was adopted in 1973 and
complemented by the Worst Forms of Child Labour Convention (No. 182), which was
unanimously adopted by ILO member states in June 1999. This Convention provides
that the minimum working age should be not less than the age for completing
compulsory schooling and in no event less than 15 (14 in limited circumstances in
less-developed countries). The Worst Forms of Child Labour Convention calls for a
proactive strategy to achieve the elimination of child slavery, forced or compulsory
labour, child prostitution, pornography, drug trafficking or other work which is likely
to harm the health, safety or morals of children.
15. The word linguicide was used by Cobarrubias (1983) in his taxonomy of
attitudes towards minority languages to denote ‘attempting to kill a language’ and
‘letting a language die’.
16. McMichael et al. (1999) identifies biodiversity, the climate system,
stratospheric ozone, food-producing ecosystems – both terrestrial and marine – and
the cycles of sulphur, nitrogen and water as the Earth’s most prominent natural
biophysical systems.
17. Copeland and Taylor (2005) assert that without universal participation, IEAs
will be undermined by the free rider problem, since countries that do not sign the
treaty increase emissions in response to the cutbacks of others.
Account: s1088130
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Maria Alejandra Gonzalez-Perez

22 MARIA ALEJANDRA GONZALEZ-PEREZ

explaining the negative consequences of globalisation on working

Keywords: International business; corporate social responsibility

Critical Perspectives on Globalisation and International Business 23

capital markets has opened the possibility of investment in multiple foreign

24 MARIA ALEJANDRA GONZALEZ-PEREZ

changes in the nature of markets, massive flows of international human

Critical Perspectives on Globalisation and International Business 25

presented by Stiglitz (2002), the opening up of the Jamaican milk market to US

GLOBALISATION AND FOREIGN ECONOMIC

26 MARIA ALEJANDRA GONZALEZ-PEREZ

(Dickens, 1998). Research from economic and public policy analysis

international development agencies. One of the main criticisms of the

Critical Perspectives on Globalisation and International Business 27

The Industry of Development

There has never been consensus on the meaning of development. The

28 MARIA ALEJANDRA GONZALEZ-PEREZ

world’s food supply is subordinated to corporate control; and consequently self-

SUMMARY OF THE DEBATE ON GLOBALISATION

The globalists, both optimistic and pessimistic globalists, see globalisation as a

Critical Perspectives on Globalisation and International Business 29

Optimistic globalist positions are based on Marshall McLuhan’s (1962)

For internationalists or ‘sceptics of globalisation’ (Gordon, 1988; Hirst &

30 MARIA ALEJANDRA GONZALEZ-PEREZ

NEGATIVE CONSEQUENCES OF GLOBALISATION

Critical Perspectives on Globalisation and International Business 31

production leading to maximisation of production using time- and cost-related

32 MARIA ALEJANDRA GONZALEZ-PEREZ

employers are needed.

Changes to Labour Relations

Besides changes in work organisation presented in the previous sub-sections,

Critical Perspectives on Globalisation and International Business 33

34 MARIA ALEJANDRA GONZALEZ-PEREZ

Discrimination and Inequality of Opportunities

Globalisation has accentuated the vulnerabilities of marginal groups. Castells’

THE CHALLENGE FOR FOREIGN AND MIGRANT

Critical Perspectives on Globalisation and International Business 35

cycle of social and economic disadvantage can become self-perpetuating (Beiser

36 MARIA ALEJANDRA GONZALEZ-PEREZ

CHILD LABOUR AND GLOBALISATION

the elimination of child labour as an essential element in the pursuit of universal

CHALLENGES FOR WOMEN

Critical Perspectives on Globalisation and International Business 37

often also bear a disproportionate share of the responsibility for household

CONSEQUENCES OF GLOBALISATION BEYOND THE

Critical theorists (Downing, Mohammadi, & Sreberny-Mohammadi, 1995;

38 MARIA ALEJANDRA GONZALEZ-PEREZ

‘linguicide’15 of minority languages and the associated effects of lost cultural

The consequences of globalisation on the environment vary depending on the

resources(e.g.soil andwater),andchangesin agricultural habitats (IEEP & GHK,

Critical Perspectives on Globalisation and International Business 39

The relationship between trade and the environment is very complex; it

international agreements (Barrett, 1994; Bratberg, Tjøtta, & Øines, 2005;

This sub-section of the chapter focuses on the consequences of globalisation for

40 MARIA ALEJANDRA GONZALEZ-PEREZ

supply, technological progress, economic infrastructure, etc.) depend

PERCEIVED DECLINE IN STATE INFLUENCE

Critical Perspectives on Globalisation and International Business 41

It is expressed in the form of corporate involvement in social rights via

42 MARIA ALEJANDRA GONZALEZ-PEREZ

Dr. Terrence McDonough at the National University of Ireland, Galway.

Critical Perspectives on Globalisation and International Business 43