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CHAPTER 1: Introduction to Globalization
Globalization is the process in which people, ideas and goods
spread throughout the world, spurring more interaction and
integration between the world's cultures, governments and
economies.
Characteristics of Globalization
1. There is social mobility of movement of people
regardless of reason.
2. There is an intensification of interaction.
3. It is an active process.
4. Borderless interaction.
5. Spread of ideas, knowledge, technology, culture,
religion, etc.
Historical Foundation of the term “Globalization”
In 1897, Charles Taze Russel coined the term “Corporate Giants”
referring to a large national trust and other large enterprises of
the time.
In 1930, the word “Globalize” as a noun appeared in a publication
entitled “Towards New Education” where it denoted a holistic
view of human experience in education.
Late 1970’s, the word “Globalization” was coined.
Late 1980’s, Globalization was popularized by Theodore Levitt.
Early 1981, Globalization was used as an economic sense.
Late 2000’s, the International Monetary Fund (IMF) identified
four basic aspects of globalization (Trade and Transactions, The
Capital and Investment Movements, Migration and Movement of
People, The Dissemination of Knowledge).
2013, the globalization was used to define “borderless society”.
2017, Globalization was often used in the Academe.
2018, Globalization was now used in all discipline.
Indicators of Globalization
• Interdependence of countries in different social
aspects.
• Advancement of science and technology.
• Environmental issues across borders.
• Economic globalization, cultural globalization, and
political globalization.
Reasons of Globalization
• Rapid shrinking of time and distance across the globe.
One can easily cross the bridge going to the other side
of the market place due to advance tools and
technology than before.
• Domestic markets are no longer rich as a consequence
of many interlocking factors.
• Companies and institutions go global to find political
and economic stability which is relatively good in other
countries than country of origin.
• To get technological and managerial know-how of other
countries due to their advancement in science,
technology, education, health and other fields of
discipline.
• To reduce high transportation costs if one goes globally
using the advance tools of communication and
information.
• To be close to raw materials and to markets for their
finished products which are not available in the country
of origin.
• The creation of the World Trade Organization (WTO)
had made it possible in stimulating increased cross
border trade.
Stages of Globalization
Stage 1: The first stage is the arm’s length service activity of an
essentially domestic company/institution which moves into new
market overseas by linking up with local dealers and
distributors.
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Stage 2: The company/institution takes over activities on its own.
Stage 3: The domestic-based company institution begins to carry
out its own manufacturing marketing and sales in key foreign
markets.
Stage 4: The company/institution moves to a full insider position
in these markets supported by a complete business system
including Research and Development and engineering.
Stage 5: The company/institution moves towards a genuinely
global mode of operation. In this stage, global localization
happens, that is, the company/institution serves local customers
in markets around globe responding to their needs.
Merits of Globalization
• An open economy spurs fast innovation with fresh
ideas from abroad.
• Exports jobs often pay more than other jobs.
• Productivity grows more quickly when countries
produce goods and service in which they are of
comparative advantageous.
Demerits of Globalization
• Exploitation of underdeveloped countries
• Widening of rich-poor gap.
• Harmful effects on small industries and small business.
Dimensions of Globalization
1. Economic Dimension - This refers to the extensive
development of economic relations across the globe as a result of
technology and the enormous flow of capital that has stimulated
trade in both sources and goods.
2. Political Dimension - This refers to an enlargement and
strengthening of political interrelations across the globe.
3. Cultural Dimension - This refers to the increase in the number
of cultural flows across the globe. Cultural interconnections are
at the foundations of contemporary globalization.
4. Religious Dimension - the religious dimension of globalization
highlights the complex and often conflicting ways in which
religion and globalization intersect. On the one hand,
globalization has facilitated the spread of religious beliefs and
practices, and created opportunities for religious dialogue and
cooperation.
5. Ideological Dimensions - Globalization has facilitated the
spread of various ideologies and values across borders with
greater ease than ever before. The increased flow of information
and communication technology has made it easier for people to
access and share ideas from different parts of the world, leading
to the emergence of a globalized public sphere where people can
discuss and debate various ideological issues.
Differences: Globalization, Internationalization and
Westernization
Globalization - this refers to the process of the world becoming
more interconnected through the integration of markets, politics,
and cultures. Globalization is driven by the expansion of trade,
investment, and technology, which have made it easier for
people, goods, and ideas to move across borders.
Internationalization - this refers to the process of countries or
organizations expanding their activities beyond their national
borders. At its core, internationalization is about entities
operating in multiple countries or on a global scale.
Westernization - this refers to the influence of Western culture
and values on non-Western societies.
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CHAPTER 2: The Global Economy Three Zones of Division Labor:

The Global Economy – also referred to as “world economy”.
- Refers to the international exchange of goods and
services.
- It may also mean as the free services, technology, and
information.
- It is concerned with globalization of production,
finance, markets, technology, organizational regimes,
institutions, corporations, and labor.
- It is expanding since the emergence of trans-national
trade and increased exponentially due to the increase
rate of communication and technology.
Market Integration
- Prices among different location or related goods follow
the same pattern over a long period of time, then
market integration exist.
- When group of prices often move proportionally to
each other and when this relation is very clear among
different markets, then market is integrated.
1. Core – high income nations in the world economy. This
is the manufacturing base of the planet where
resources funnel in to become the technology and
wealth enjoyed by the Western World today.
2. Semi periphery – are the middle-income countries,
such as India and Brazil. These are considered semi-
periphery due to their closer ties to the global economic
core.
3. Periphery - called as the low-income countries, whose
natural resources or labor support the wealthier
countries. Peripheral countries are dependent on core
countries for capital and have underdeveloped
industry.
Resources are redistributed from the underdeveloped to
developed countries.

Role of International Financial Institutions in the Creation of

Global Economy

International Financial Institutions (IFI) – are chartered by more

than one country and therefore are subjects to international law.
The owners or shareholders are generally national governments,
although other international institutions and other
organizations occasionally figure as shareholder.

The International Financial Institutions are:

1. International Monetary Fund (IMF)

2. Multilateral Development Banks (MDBs) which include
World Bank Group, African Development Bank, Asian
Development Bank, Inter-American Development
Bank, and European Bank for Reconstruction and
Development

Two types of Economic Globalization

1. Protectionism – protecting one’s economy from foreign
competition by creating trade barriers.
2. Trade Liberalization – reducing trade barriers to make
international trade easier between countries.
Global Governance – is sometimes referred to as “world
governance”. Global is a movement towards political cooperation
among translational arts, negotiating responses to problems that
affects more than one state or region.

Tariff – is an example of a trade barrier which are required fees

on imports or exports.

Canada’s tariff on food is a good example of protectionism,

because Canada places high tariffs on foods like dairy products.
But on the other hand, if the Trans-Pacific Partnership and the
Comprehensive Economic and Trade Agreement between
Canada and the European Union is established, Canada would
achieve trade liberalization when it comes to the importing of
food.

Free Trade – trading of goods or services between two or more

countries without tariffs or taxes.

Trade Bloc – agreement made between governments to reduce

or eliminate trade barriers.

CHAPTER 3: The Global Interstate System

Global Interstate System- whole system of human interactions.

The modern world system is structured politically as an
interstate system — a system of competing and allying states.

World-systems are defined by the existence of a division of labor.

The modern world-system has a multi-state political structure
and therefore its division of labor is international division of
labor.