DIFFERENTIAL PERCEPTIONS OF THE DYNAMICS OF GLOBALIZATION: A SURVEY STUDY

 

Demirdjian, Z. S.

California State University, Long Beach

zdemirdj@csulb.edu

  

                 

 

ABSTRACT

By observing today’s world business scene, one would see in one fell swoop the tidal sweep of globalization taking place.  Internationally oriented corporations are rushing to stake their claims reminiscent of the discovery of gold in California.  While globalization has many economic benefits to offer, its long-term effect on the people and the places of this planet are often overlooked. In the landscape of globalization, there are many obvious green spots and some have hailed it as leading the world into a new era of prosperity and peace. Despite all the euphoria, some consider it the Trojan horse: there are many deep concerns expressed regarding the invasive process of homogenization of national education, language, culture, and consumption of products and services with an eventual consequence of social disintegration. To what extent business students, our future executives, are aware of the implications of globalization? A survey study based on 800 respondents was conducted to determine how students’ perceptions of the effect of globalization differed from those of business executives.  Thus, data were gathered from two separate samples, one consisting of 400 students and the other one consisting of 400 business executives, who had been queried on the economy, culture, and environment of internationally active nations around the world. Results of this survey study have shown some interesting convergent and divergent perceptions of the dynamics, (i.e., the change-producing forces) of the globalization phenomenon.

           

Introduction

Within the last one hundred years, humankind has generated an impressive host of invasive ideas such as imperialism, liberalism, socialism, Marxism, industrialization, and perestroika to mention a few, which have shaped our world markedly.  Paramount among these ideas is internationalism. Inherently, international mindset has a global perspective as Jeannet and Hennessey (2004) point out.

 

Essentially, internationalism boils down to the recognition that all nations are bound together in a collective enterprise that calls for cooperative action (Prahalad 2004). Owing to modern technological achievements in real time communication, the world has shrunk to a global village. As a result, internationalism has found fertile grounds to spread rapidly like a storm fire.

 

Internationalism fever can be likened to the California’s Gold Rush of 1848.  Some prospectors struck gold, while others panned nothing but gravel and sand as Friedman (1999) draws our attention to this fact in his book The Lexus and the Olive and Arnold (2004) laments the situation in his latest book The Mirage of Global Markets.  In its elementary form, though, it is a business idea that has been steadily shaping our world economies for better or worse.

 

Internationalism is the antithesis of protectionism, which is still practiced by some successful economies such as that of Japan’s (Hines and Lang 1996).  Protectionism is the countervailing force against the notion of a borderless world as Ohmae (1990) suggested.  Yet despite the practice of protectionism, the majority of nations, China being a prime example of a late comer, seems to have embraced internationalism with open arms, eager to enjoy the fruits of capitalism and cooperation.

 

Currently, globalization is the single most controversial topic in internationalism. Numerous articles and books have been written on its pros and cons (Arnold 2004; Mander and Goldsmith 1996; Friedman 1999; Johansson 2004).  The pressures of international action nevertheless remain the same: is globalization a panacea to eradicate world ills and disparities between the poor and the rich?  Or is it simply driven by corporate greed to exploit world resources by ushering in disease, pollution, over population in the economically challenged countries of the world, resulting in water, housing, food, employment, and education scarcity?  

 

As the cliché’ goes, not all that glitters is gold.  A number of its salient drawbacks are hard to swallow as they have been extensively explored in Mander and Goldsmith’s (1996) anthology.  Should the advantages of globalization of the world market make us overlook its disadvantages, which may not be obvious at the present time? Is globalization one of the last gifts to humankind? Or is it a curse to destroy the many unique and splendid aspects of various world communities? These are some of the burning questions experts are endeavoring to find answers.

 

For example, on October 16, 2004, ABC reported that Britain’s obesity problem had been partly attributed to U. S.  fast food companies for introducing junk food into England. To evade the Brits’ ire, McDonald’s has decided to camouflage itself by bringing down the proverbial Golden Arch and by including more healthy choices in its menus.

 

McWhriter (2000), in his future of things to come, states that globalization will have a homogenizing effect on world culture.  Diverse human societies may become more like each other due to the power of advertising and the spread of international brands.  To further complicate matters, more people live in cities and that cities are growing more similar which in turn may lead to an increasingly homogenous culture across the globe.

 

Dissolving of world religions into one, such as Islam since it is the most increasing one, global warming, global pollution, global deforestation are some of the topics of the debate which have been going on since the 1970s.  Most of the viewpoints presented in these debates, however, have mainly been subjective in nature.  More empirical studies are needed to determine the nature of globalization.

 

One area which has not been researched is the perception of students of the bright side and the dark side of globalization. Since our students are our future executives, it is important to know whether our schools are preparing them to understand the ills as well as the benefits of globalization. To what extent business students are aware of the effect of globalization on people, places, and ideas as compared to business executives? Are we preparing our students to recognize the dark side of globalization too?

 

Through a descriptive study, it is hoped to research whether students are more concerned about the effects of globalization than the business executives? Is it the bottom line that counts or the preservation of people and places? Are business executives more?

favorable toward globalization in general? Are business students more critical of the effect of globalization in general?

 

In this paper, first a brief historical background of globalization is presented, followed by an introduction to the hotly debated practice of globalization.  Next, the methodology of a survey study is presented along with its findings and discussions.

           

A Brief Historical Background of Globalization

For most of the 20^th century, Europe’s destructive and decisive wars and the post-1945 Cold War between the capitalist West and the Communist Eastern Block, the energies of both sides had been mainly focused on militarism. The Western intelligentsia was distracted from the greatest of international issues – the ever gaping economic disparity between rich and poor nations.

 

The dissolution of Communism in most Eastern Europe, beginning in 1989, brought the end of the Cold War and thus paved the road for the conduct of international relations.   Meanwhile, the phenomenal advance of the Pacific Rim countries endowed with a mega population, a mega land, and a mega capital threw the established economic order into disarray.

 

In the 1980s, internationalism was referred as globalization and since Theodore Levitt’s seminal article in 1983, “global marketing” term gained widespread currency. Globalization started to emerge as an economic force, expanding Western as well as Pacific Rim economies.  It consolidated itself during the economic uncertainty and recession of the 1990s, as multinational companies such as Sony, Siemens, and Ford located their plants and decision centers around the world simply to take advantage of low labor costs, to have access to cheap raw materials, to benefit from lax pollution standards, and to obtain government grants. Motorola, Inc. boasted in its 2003 Annual Report that “Motorola is a great global brand.”

 

During this time, advances in technology made it possible to transmit voluminous data electronically by either fax or e-mail in a few seconds.  Improvements in transportation have also contributed to globalization. For example, fast air travel opportunities enabled companies to send goods from one end of the globe to another quickly and cheaply.

 

To free up international trade further, a number of agreements have been signed in 1990s.  Among the most important ones was the North American Free Trade Agreement (NAFTA) of 1994, which has a program to establish free movement of goods and services among Canada, Mexico, and the United States by 2009.  Kehoe (1995), however, has pointed out some of the major problems with NAFTA along with some of its promises. During this time another political initiative was The Maastricht Treaty of 1993.  The main purpose was to set up the European Union, which also aimed to abolish trade barriers between its initial 12 member states (Cateora and Graham 2005). 

 

Above all, after eight years of negotiations, the General Agreement on Tariffs and Trade (GATT) was signed in 1994 in Uruguay to facilitate global trade (Kehoe 1998; Denis 2003).  The 125 participating nations agreed on a new code of conduct for international commerce.  Its members also agreed to reduce tariffs through multilateral negotiations. All of the foregoing agreements have enhanced and encouraged international trade and business considerably

 

The mirage of opportunities promised by globalization, however, represented a severe backlash for some countries as suggested by Arnold (2004). Certain countries were not getting economic parity with foreign companies.  Michael Jordan, for example, makes more money from Nike annually than the entire Nike factory workers in Malaysia combined. Upon detecting the lack of economic playing field in globalization, some countries became apprehensive, leading to calls for renewed trade protection for trust is the currency of human exchange, be it social or business.

 

Japan, whose huge economic success is based on protectionist policies, face a tariff-free future with a great uncertainty (Drew and Herbig 2002).  Western nations blame cheap Asian and Middle Eastern labor for job insecurity and wage freezes.  Regardless of its fame or notoriety, globalization has already changed the rules of the economic game and can be as much a source of opportunity as a threat.

 

Globalization: A Hotly Debated Controversy

In spite of the attitudes held, between the two extremes of protectionism and globalization, the pendulum has swung toward the latter. A time may come when it would reverse its position and move toward the former.  A shift in the direction of the pendulum may be plausible since nothing is constant in the business world except that of change. A sign of things to come is mirrored in the strategies of globalizing companies which are finding success as markets localize.

 

Pessimists predict the weakening of social systems in the third world countries, resulting in the collapse of sovereign states and the eventual disappearance of small ethnic groups. Kamran (1989) has warned us of the pitfalls of global marketing decades ago. One African nation, Kenya for example, has a diverse population speaking about 42 different languages out of Africa’s 1,800 languages.  Cheruiyot (2003) reports that sixteen out of 42 languages are at risk of disappearing. Kids are learning English in schools; they are using it at the playgrounds, on the streets, and at home.  The deep concern is that these traditional languages are bound to become extinct. When a language disappears, so does the ethnicity of the people. The optimists, on the other hand, foresee great economic improvements predicated on the free-market principles and economic interdependence between the rich and the poor nations. 

 

Globalization, pessimists persist, is ominous like a dark cloud, threatening their jobs and communities.  Take Cancun for example, white collar jobs are all held either by foreigners or by the elite who come from Mexico City. The Mayan Mexican barley scrapes a living. By Some globalization is considered a threat to jobs and communities, diminishing democracy, increasing economic anxiety, stimulating social disintegration, and ushering in social entropy (disorder), while devouring the last remnants of resources and wilderness. Basically, it is thus creating an ecological imbalance (Sachs 1996).  Business Week, on March 1, 2004, and again on March 22, 2004 had Special Reports exploring the culpability of outsourcing for the loss of local jobs; its conclusion was that the truth was a lot more complicated than simply blaming outsourcing. Outsourcing as causing the loss of jobs has stirred the waters of controversy and became the topic of 2004 George W. Bush and John Kerry’s presidential campaign heated debate on and off television.

 

Certainly, internationalism stands imponderable despite its invasiveness in the landscape of world economies.  Time will tell its strengths and weaknesses, its successes and failures, its promises and its disappointments.  There is urgent need, therefore, to evaluate this emerging idea of globalization which is the latest manifestation of internationalism from various angles and dynamics as a promise as well as a peril (Yeung 1998).

 

According to Weidenbaum (2002), the Western minds, the Eastern government officials are all weighing the perils and panaceas of internationalism which is defying any definitive evaluation of its impact on the economy, culture, and environment of the participant nations. Some hail globalization as the best idea ever happened to the world; others bemoan its disastrous effects.  Weidenbaum (2002) captures the essence and scope of the controversy in the title of his article –“Globalization: Wonder Land or Waste Land.”

 

Dimensions of the Globalization Dynamics: The Main Pros and Cons

By reading the various articles, the statements were then designed in a way that the results would make it easier to understand the impact of globalization on societies throughout the world. Thus, ten dimensions of the globalization dynamics (i.e., the change producing forces) are identified as causing controversy: outsourcing, impact on the environment, culture, politics, economics, pollution, natural resources, language, gender, and control.

 

The pros and cons of globalization from various sources helped to come up with the questionnaire items.  A few examples of the questions are globalization creates jobs (i.e., through outsourcing) in foreign countries, which raises their standards of living.  This would be an example of a pro position toward outsourcing.  A con stance toward outsourcing would be outsourcing does not allow people to get the needed skills to compete with foreign workers for the same jobs.

 

Another example would be globalization has increased worldwide awareness for protecting the environment from the effects of pollution. This is an example of a pro position on globalization for natural resources. A con position regarding the use of natural resources would be that globalization causes deforestation, depletion of the ozone, mineral (i.e., iron), energy (i.e., oil) and global warming. These are just a few statements of the pros and cons on globalization used in this study.

 

Hypotheses

Are business students being prepared to have a more extensive and well-rounded understanding of the implications of  globalization than the practicing executive, given that globalization is a business associated topic discussed in many business schools and business forums across the world? A review of the literature disclosed different opinions and views by the businesspersons as well as academicians on the diverse dimensions of globalizations (Prahalad 2004; Norberg-Hodge 1996).

 

This study addresses many different aspects of globalization. A thorough search has shown ten dimension of globalization as having serious business and societal implications. The ten dimensions of globalization are outsourcing, environment, culture, politics, economics, pollution, natural resources, language, gender, and control. These hotly debated issues are formulated in the following hypotheses:

H1: Students perceive globalization as having negative effect on the environment than the executives do because of the former’s recent schooling whereby students are made aware of the negative aspects of globalization.

H2: Executives have more positive perception than students on outsourcing because of the profit motive and work experience, especially in competition which forces them to cut on costs such as of labor.

H3. Students perceive globalization as having a homogenizing effect on different cultures than executives do for the youth of the world are possessing universal characteristics, such the same taste in music, clothing, attitudes, etc.

H4. Students perceive globalization giving companies power over the politics of the host country than executives do because of their direct or indirect involvement in the economy and prosperity of that country.

H5. Executives perceive globalization as having a positive effect on the economy of the host country by raising its standard of living than students do as a justification to conduct business in foreign markets.

H6.  Students perceive globalization as a force contributing to world pollution than executives are willing to admit (many textbooks contain material relating to the implications of industrial production on the fragile health of the Planet Earth.

H7: Students perceive globalization to be depleting natural resources of the host countries than executives perceive that way for they may not want to be accused of being exploitative.

H8: Students perceive globalization as a force which eventually causes many languages of small ethnic groups to disappear than executives believe. Again, the topic is being discussed in schools nowadays about the homogenization of cultures.

H9: Executives perceive globalization as providing women with more opportunities to get into the job market than students do. Executives like to be regarded as providing equal employment opportunities.

H10:  Students perceive globalization as having a great control over the destinies of the host countries than executives do since most countries involved in globalization are developing countries with abundance of cheap labor, but lack international business knowledge.  

 

The Survey Study: Methodology

Sample. To determine the differential response to globalization, two distinct samples were used in this study.  One sample consisted of 400 business students at a large university; another sample of equal size (400) consisted of executives of various businesses and sizes.  The idea of separate samples was to enable the researcher to see the difference in positions toward the effect of the various aspects of globalization.  In this way, one would also find out indirectly whether today’s students are aware of the negative side effects of globalization.

 

No distinction was made between male and female students for classrooms nowadays contain almost equal number of male and female students across college and university campuses. Furthermore, there was no distinction made between undergraduate and graduate students, either.  A business executive was operationally defined as any businessperson, male or female, such as CEO, President, Director, Supervisor, owner-manger, etc. who is a decision maker.

 

Research Instrument.

Based on an extensive review of the literature, ten dimensions of globalization were identified.  These dimensions were further split into twenty determinants reflecting positive and negative effects of each dimension. The questionnaire, thus, consisted of twenty statements using a Likert-type scale (i.e., strongly agree, agree, undecided, disagree, and strongly disagree) to test the ten dimensions of globalization: outsourcing, environment, cultures, political, economics, pollution, resources, language, gender and control.

 

Thus, the research instrument used two determinants one on the pro and another one on the con position toward each dimension of globalization.  For example, some in the industry debated that globalization is causing the depletion of natural resources sooner than the restoration of these resources, while others argue that globalization has introduced technology to underdeveloped countries to reduce the use of natural resources.

 

Globalization is defined as the global circulation of goods, services and capital, but also of information, ideas and people. There are many articles and books on the positive and negative effects of globalization. From these articles, I have taken the major topics of discussion to survey 400 business students and 400 hundred business persons.

Students and business people were surveyed through a questionnaire which contained statements on outsourcing, environment, culture, politics, economics, pollution, resources, language, gender, and control. A sample of the questionnaire used to report the results of the analysis of data appears in Appendix A.

 

Procedure.

Self-administered questionnaires were distributed to the sample of students as well as to the sample of executives. For the student sample, the questionnaires were distributed to students in classes on campus.  As for the executive sample, the data were collected from the local businesses in a large metropolitan area.

 

When the questionnaires were collected, responses of students and business people were tallied under the following categories: “strongly agree,” “agree,” “undecided,” “disagree,” and “strongly disagree” for each statement.  

 

Analysis of Data. Statistical analysis was performed by using the standard chi-square test of independence. The data were placed in contingency tables and expected values were computed for comparison with the observed data as shown in Appendix A.

 

Limitations of the Study. Before presenting the findings of the survey, it would be necessary to mention some of the limitations of the methodology followed in gathering the data.  Of the several limitations, the following are the salient ones:

1. The respondents used for the survey all came from one metropolitan area.

2. The sample units were not selected according to probability laws which violated the

        assumption that the data had a normal distribution.

3. A few of the cells in the observed data had less than five frequencies to meet the

       requirements for Chi-square analysis.

 

Findings and Discussion

Findings. The analysis of the data has produced the following findings pertaining to the effect of globalization on the selected ten dimensions:

1)      In regards to the statement about globalization creating jobs (i.e., through

outsourcing) in foreign countries therefore raising their standards of living, business executives strongly agreed with the statement than the students did (calculated x²= 26.29, with 4 d.f., at .05 level).

2)      In regards to the statement about outsourcing not allowing people to get the needed

skills to compete with foreign workers for the same jobs, the majority of students tended to agree that outsourcing did not allow people to get the needed skills (calculated x² = 33.41, with 4 d.f., at .05 level).

 

3)      In regards to the statement about business projects in foreign nations having

detrimental effects on the environment of the host country, the majority of students strongly agreed that many business projects had detrimental effect (calculated x² = 20.43, with 4 d.f., at .05 level).

4)      The statement about globalized countries increasing world awareness to protect the

host country’s environment, showed that the majority of business people agreed that as being the case (calculated x² = 186.12, with 4 d.f., at .05 level).

5)      The statement about globalization improving relations among nations, who are

interested in promoting world trade, majority of business executives agreed with the statement (calculated x² =  59.84, with 4 d.f., at .05 level).

6)      In regards to the statement about globalization alarming some nations to feel

threatened by foreign companies exercising control of their market, the majority of students agreed (calculated x² = 41.06, with 4 d.f., at .05 level).

7)      In regards to the statement about globalization contributing to the spread of mutual

understanding and tolerance, the majority of executives agreed (calculated x² = 14.34, with 4 d.f., at .05 level).

8)      In regards to the statement about, globalization having the tendency to homogenize

the differences among the various cultures, the majority of students strongly agreed (calculated x² = 75.95, with 4 d.f., at .05 level). 

9)      In regards to the statement about opening markets through globalization driving

national output of goods and services and economic growth up, the majority of executives strongly agreed (x² = 9.72, with 4 d.f., at .05 level). 

      10)  In regards to the statement about, globalization increasing economic unemployment

              balances in developing countries, majority of students agree with the statement

             (calculated x² = 16.98, with 4 d.f., at .05 level).

        11) In regards to the statement about globalization having introduced technology to

                     underdeveloped countries to reduce the use of natural resources, neither the

                     students nor the executives agree with the statement (calculated x² = 8.03, with 4 d.f.,

                    at .05 level).       

      12) In regards to the statement about globalization which is causing depletion of natural

      resources sooner than the restoration of resources, majority of the executives agree with

       that statement (calculated x² = 66.42, with 4 d.f., at .05 level).

       13) When students and business respondents were asked if globalization had limited world

      languages to three dominant ones (English, Japanese and German) by which

      communication is made easier, the majority of executives agree with it (x² = 28.22, with

      4 d.f., at .05 level).

        14) The statement concerning globalization having the potential to cause some world

        languages and cultures to disappear, neither the students nor the executives agree to it

        (x² = 6.54).

         15) The majority of students agree that globalization has helped some societies around the

         world to accept woman in the business environment (calculated x² = 50.58, with 4 d.f.,

         at .05 level).

          16)  The responses on the statement about globalization largely excluding woman     from

          important business positions show that the majority of executives agree with the

           statement (calculated x² = 21.72, with 4 d.f., at .05 level).

           17) The statement that globalization helped firms create many jobs for people around the

           world is received the agreement of the executives (calculated x² = 12.99, with 4 d.f., at

           .05 level).

            18) The responses for the statement about industrialized nations having largely excluded

            developing countries from prospering in global business, the majority of students

            agree with the statement (calculated x² = 46.32, with 4 d.f., at .05 level).

             19) In regards to the statement that globalization is increasing worldwide awareness for

           protecting the environment from the effects of pollution, neither the students nor the

           executives agree on this statement (calculated x² = 4.59, with 4 d.f., at .05 level).

              20) The majority of students agreed that  globalization is causing deforestation, depletion of

                        the ozone, mineral (i.e., iron), energy (i.e., oil), and global warming.

 

 

 

 

Discussion. Executives’ and students’ perception of the effect of globalization markedly differed on all dimensions except in the area of resources and language as is shown in Table 1.

 

Table 1

Pro and Con Responses of the Executive and Student Respondents

Regarding the Effect of Globalization on the Ten Dimensions

 

                                                                                            Convergent or Divergent         

Dimension                        Pro                        Con                           Perceptions

 

Outsourcing               Executives                 Students                     Divergent

Environment              Executives                 Students                      Divergent

Politics                       Executives                 Students                     Divergent

Culture                       Executives                 Students                     Divergent

Economy                    Executives                 Students                     Divergent

Resources                                                    Both                            Convergent

Language                                                     Both                            Convergent

Gender                       Students                    Executives                  Divergent

Control                       Executives                  Students                     Divergent

Pollution                     (Exec. Undecided)*   Students                     Divergent

　

*Only in one instance executives were undecided on the effect of globalization on

 pollution.

 

Based on the analysis of the data gathered, business executives seem to be more favorably inclined toward globalization than students do. One plausible explanation is that the businesspersons are rather driven by the profit motive and tend to sell their pants over competition while students are still idealistic partly because of their inexperience of the real world and partly because of the socially responsible educators who explain to their students both the negative and the positive sides of globalization.  Moreover, business executives may salivate and see things through rosy glasses when governments of developing nations invite and even entice companies to do business in their countries without careful consideration of the long-term effect of globalization on the economy, society, and the environment.

 

On the other hand, students held considerably less favorable perception of globalization than the executives perhaps on account of their schooling in viewing globalization rather as being a Trojan Horse.

 

Conclusion. Like any other invasive ideas that shaped the world during the last century, globalization has its bright as well as dark sides. Despite all the enthusiasm, exuberance, gloom and the doom, the idea of internationalism seems to be entrenching by sending its tap root deeper and deeper into the landscape of world business. The idea seems to have already become institutionalized, especially after the collapse of the Soviet Union which used to fuel the cold war by polarizing nations around the world. Fortunately, international collaboration has largely replaced political competition for the pursuit of world dominance.

 

Cooperation without self-sacrifice, however, fails to cross-pollinate any critical progress among nations. To some newly independent nations, internationalism is fast becoming the opium of the people --the only way out of the vicious circle of poverty. Only and only time will tell with certainty whether globalization proves to be primarily a panacea for world peace and prosperity or a painful Pandora’s Box for the community of the Planet Earth to endure its serious consequences for centuries to come.  

 

Currently, majority of business students, who are our future executives, seem to have a rather critically unfavorable perception of globalization.  Perhaps the negativity stems from the exploitation of natural resources and its attendant damage to the environment.  With a global mindset, however, new executives of various nations will learn to capitalize on the positive aspects of globalization for mutual economic progress, while protecting the environment and preserving the integrity of the individual cultural fabric of each society.

 

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