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Presentation on theme: "GLOBALIZATION “THE WORLD IS FLAT”"— Presentation transcript:


2 Globalization Globalization created a new world characterized by:
Worldwide communication Collaboration without barriers

3 Evolution of Globalization
Mainly European countries are globalizing Power is the primary driver Industries changed Slow pace of change

4 Evolution of Globalization
Companies are globalizing Reduction in transportation and telecom-munications costs Mainly Europe and America involved

5 Evolution of Globalization
Individuals and small groups are globalizing Faster pace of change Emergence of new industries

6 Evolution of Globalization: Summary
The World Is Flat (Thomas L. Friedman) “10 Enablers” Key factors enabling Globalization 3.0

7 Enabler #1: The Fall of the Berlin Wall
November 9, 1989 Fall of communism People from the former communist countries gained more freedom

8 Enabler #2: Netscape Browser
August 9, 1995 “Killer app” First mainstream browser Gave individuals access to the Internet & set standards

9 Enabler #3: Work Flow Software
Applications that allow people worldwide to communicate XML: applications “talk” to each other New possibilities for information sharing Global currency to fuel commerce

10 Enabler #4: Uploading Individuals and companies actively participate in content generation on the Web Wikipedia a huge success

11 Enabler #5: Outsourcing
Outsourcing companies profited from the drop in telecommuni-cations costs Companies can now use talented engineers from anywhere

12 Enabler #6: Offshoring Companies set up entire factories in countries such as China Mass production Low costs

13 Enabler #7: Supply Chaining
Integration of retailers, suppliers, and customers Wal-Mart became an early leader Use of RFID tags

14 Enabler #8: In-Sourcing
Delegation of company’s key operations to a subcontractor Example: UPS provides complete supply chain solutions to companies

15 Enabler #9: In-Forming In-forming is to individuals what outsourcing, offshoring, and in-sourcing is to companies Individuals have access to massive amounts of information

16 Enabler #10: The Steroids
Technologies that support different types of collaboration Greater mobility Triple convergence

17 Opportunities for Operating in the Digital World
Opportunities for reaching new markets Former Eastern Bloc countries provide new opportunities for international companies to reach new customers

18 Opportunities for Operating in the Digital World
Opportunities of a global workforce: Low communications costs Highly-skilled labor pool Engineering Graduates in the United States, Europe, and India Based on: Mallaby, 2006

19 Challenges of Operating in the Digital World
Globalization also created a set of unprecedented challenges: Governmental Geoeconomic Demographic Cultural

20 Governmental Challenges
Political System Challenges Political stability Regulatory Challenges Tariffs Embargoes Export regulations Quotas

21 Governmental Challenges
Data-Sharing Challenges Transborder data flow regulations Differences in standards UPC vs. EAN Measurement units Postal codes, phone numbers, etc.

22 Governmental Challenges
2-22 Internet Access and Individual Freedom Content blocking by governments/censorship China—Use of VoIP restricted Germany—Sites with fascist symbols prohibited Internet access blocking Cuba, North Korea

23 Geoeconomic Challenges
Time Zone Challenges Real time meetings across continents difficult Working around the clock possible

24 Geoeconomic Challenges
Infrastructure-Related Challenges Traditional infrastructure—roads, electricity Connectivity—reliable Internet connections Challenges Related to Economic Welfare GDP growth not distributed evenly throughout the world Migration Some companies used to deal with low margins and tough competition

25 Geoeconomic Challenges
Demographic Challenges Differing rates of population growth World Population, (in billions)

26 Geoeconomic Challenges
Demographic Challenges (cont’d) Expertise related challenges Different concentration of skilled workers Different costs of workers

27 Cultural Challenges National Cultures
Power Distance—differences in how societies handle the issues of human inequality Uncertainty Avoidance—risk taking nature Individualism/Collectivism—value placed on an individual vs. a group Masculinity/Femininity—degree to which a society is characterized as masculine/feminine Concept of Time—long term vs. short term Life Focus—quantity vs. quality of life

28 Cultural Challenges Cultural Barriers
Language—communication language and norms Work Culture—work skills, habits, and attitudes Aesthetics—art, music, and culture Education—attitudes toward education and literacy Religion, Beliefs, and Attitudes—spiritual institutions and values Social Organizations—family and social cohesiveness

29 Cultural Challenges Environmental challenges Other Challenges
Energy consumption, pollution, workers health Shipping Other Challenges Differences in what is regarded as appropriate Standards of dealing with intellectual property Network readiness Not every country has access to the global networked economy


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