Globalisation, Environment And Business

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Globalisation, Environment And Business

  1. 1. Globalisation, Environment and Business Dr. Peter Cullen University of Urbino Language and Culture for Business Language and Culture for 09/03/2010 Business - University of Urbino 1
  2. 2. Globalisation, Environment and Business I. Historical relationships between world systems, and business II. Worlds systems and globalisation – what’s changed? III. World environmental relationships. IV. Business impacts and business solutions. Language and Culture for 09/03/2010 Business - University of Urbino 2
  3. 3. I. Historical relationships between world systems and business Douglas North (Understanding the Process of Economic Change): Humans seek to minimise the gap between competence and difficulty in decision making by creating rule structures called institutions. (Heiner 1983) “By channeling choices, institutions can improve the ability of the agent to control the environment” Language and Culture for 09/03/2010 Business - University of Urbino 3
  4. 4. I. Historical relationships between world systems and business Human institutions act to reduce perceived uncertainty in human relationships. Businesses are: socio-technical pluri-purpose partially open vital systems Designed to produce goods and/or services with an acceptable degree of stability. Language and Culture for 09/03/2010 Business - University of Urbino 4
  5. 5. I. Historical relationships between world systems, and business Immanuel Wallerstein: 3 types of human social systems: mini-systems (isolated, tribal, local) single-state empires (centre-periphery, i.e., UK and Fr 19° cent) multi-polity economies (i.e. cold war, today) Each system was included or excluded in certain world-systems. The current world system has it’s roots in the 16° century. Language and Culture for 09/03/2010 Business - University of Urbino 5
  6. 6. I. Historical relationships between world systems, and business Andre Gunder-Frank: World systems are at least 5000 years old. Geographical advantage in relation to relative technology and material culture promotes shifts in world-systems balance. J. Abu-Lughud: Europe = periphery of “old world-system”. i.e., the spice trade was a political, economic and cultural system based on comparative advantages and in agricutlural systems dependent on cultural tastes in food. Language and Culture for 09/03/2010 Business - University of Urbino 6
  7. 7. I. Historical relationships between world systems, and business World systems functions are based on utility and efficiency of transactions. Political and economic transactions (treaties, declarations, sales, purchase, construction, distribution, ecc.) are forms of institutional communication. They represent shared belief systems that help reduce uncertainty in social behaviour. They are not free from the physical environment – they develop in the context of the physical environment. Language and Culture for 09/03/2010 Business - University of Urbino 7
  8. 8. II. World systems and globalisation What’s changed? UN: globalisation is: in an economic context, the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour. This includes the transfer and sharing of knowledge, communications, and document flow. It has promoted pan-national political support for barrier- reduction and communications development. Labour is stickier. Language and Culture for 09/03/2010 Business - University of Urbino 8
  9. 9. II. World systems and globalisation What’s changed? Term: “international” – a system involving at least 1 relationship between at least 2 nation-states. Term: “global”, different sectors of life (political, socio- cultural, economic) interact with a large degree of freedom irrespective of national borders. Transaction costs are low Perceived uncertainty is contained Institutional guarantees shift away from national judicial systems. Language and Culture for 09/03/2010 Business - University of Urbino 9
  10. 10. II. World systems and globalisation What’s changed? Barraclough (1964): The success of European international systems in the 19° century ultimately put them into violent conflict and the world system dynamic shifted to Asia and North America. More room for demographic growth Learned lessons of urban efficiency This shift (WWI and WWII resulting) slowed globalisation. Language and Culture for 09/03/2010 Business - University of Urbino 10
  11. 11. II. Worlds systems and globalisation What’s changed? US and Asian response to European internationalism has challenged European formats of institutional conduct: 1) Euro inter-nationalism was based on a policy of creating national identity within Europe – it was politicaly competitive. 2) Since WWII, US political culture has granted increasing freedom to independent economic agents – reducing the role of national government in reducing uncertainty. Language and Culture for 09/03/2010 Business - University of Urbino 11
  12. 12. II. Worlds systems and globalisation What’s changed? The US approach: pushed technological and social innovation outside the realm of political direction. Politics is now reactive to global change. National identities are tested and confirmed or modified constantly through global communications networks. EU, NATO, SEATO, NAFTA IMF, WORLD BANK, OECD, WTO CNN, Al Jazeera, Sky Email, Facebook, Youtube Language and Culture for 09/03/2010 Business - University of Urbino 12
  13. 13. II. Worlds systems and globalisation What’s changed? Networks – exponential growth in connectivity and access. Jonathan Friedman: Global = multiple level access between many local, regional and world systems – this is new. Language and Culture for 09/03/2010 Business - University of Urbino 13
  14. 14. II. Worlds systems and globalisation What’s changed? In the exchange of goods, services and money, institutions need increasing knowledge input to make effective decisions concerning economic, political and cultural contexts. AS THE SYSTEM GROWS AND INTEGRATES, THE NATURE OF THE SYSTEM CHANGES Language and Culture for 09/03/2010 Business - University of Urbino 14
  15. 15. III. World environmental relationships. Human world systems, culminating in current globalised economic, social and political networks have integrated relationships among local, regional and global systems. The environment is a global system with humans as part of it. Human societies have an increasing effect on the environment – shifting the nature of uncertainties. Language and Culture for 09/03/2010 Business - University of Urbino 15
  16. 16. III. World environmental relationships. Nature and “baselines” The planetary environment changes naturally – creating human desire to reduce uncertainty. Vostok ice cores Saharan iron transfer Language and Culture for 09/03/2010 Business - University of Urbino 16
  17. 17. III. World environmental relationships. • Global-scale changes that affect the functioning of the Earth System • Much more than climate change • Socio-economic as well as bio-physical For example, changes in: Reid & Miller (1989) Vitousek (1994) Language and Culture for 09/03/2010 Business - University of Urbino 17
  18. 18. III. World environmental relationships. For example, changes in: U.S. Bureau of the Census Mackenzie et al (2002) Richards (1991), WRI (1990) NOAA Language and Culture for FAO 09/03/2010 Business - University of Urbino 18
  19. 19. III. World environmental relationships. The Earth’s system is millions of years old Language and Culture for 09/03/2010 Business - University of Urbino 19
  20. 20. III. World environmental relationships. Burning fossil fuels has upset natural Cycles in CO2 output Language and Culture for 09/03/2010 Business - University of Urbino 20
  21. 21. III. World environmental relationships. 1 Northern Hemisphere Temperature (°C) 0.5 0 -0.5 1000 1500 2000 Mann et al (1999) and IPCC 2000 Temperatures have increased, and human activities are partially responsible Language and Culture for 09/03/2010 Business - University of Urbino 21
  22. 22. III. World environmental 6 IPCC Projections 2100 AD relationships. 5 Global Temp (°C) 4 We are now about 5°C warmer 3 than the last ice age! 2 1 N.H. Temp (°C) 1 0.5 0 0 -0.5 Mann et al (1999) and IPCC 2000 1000 1500 2000 Language and Culture for 09/03/2010 Business - University of Urbino 22
  23. 23. III. World environmental relationships. Increase population puts increased stress on local, regional and Global dem global environmental rise since 1800 systems. The nature of risk and uncertainty has changed as material culture globalises! Language and Culture for 09/03/2010 Business - University of Urbino 23
  24. 24. III. World environmental relationships. Relative population densities Providing immediate needs creates environmental stress Language and Culture for 09/03/2010 Business - University of Urbino 24
  25. 25. III. World environmental relationships. Observed environments change according to Braudel’s construct: i.e. global warming: long term patterns (40,000 year glacial cycles) conjunctural patterns – last 150 years = +.5°C event patterns – last 3 years – polar ice melting Agricultural societies changes dramatically with environmental cycles at all three rates. What about industrial societies? What about service sector societies? Language and Culture for 09/03/2010 Business - University of Urbino 25
  26. 26. III. World environmental relationships. Language and Culture for 09/03/2010 Business - University of Urbino 26
  27. 27. IV. Business impacts and business solutions. Environmental changes affect businesses on local, regional and global levels - ACROSS THE VALUE CHAIN!!! Environmental Events Mid term convergences Long-term shifts DO NOT necessarily coincide with business cycles Language and Culture for 09/03/2010 Business - University of Urbino 27
  28. 28. IV. Business impacts and business solutions. Increasingly business must manage: Environmental events themselves: Costs of mitigation taxes, cap and trade systems, certifications Costs of adaptation process and technology innovations, market re-orientation Costs of communication stakeholder briefings, global market adjustments, institutional reporting, third party buzz Language and Culture for 09/03/2010 Business - University of Urbino 28
  29. 29. IV. Business impacts and business solutions. Current global environmental issues are an opportunity for businesses to EXPLORE AND IMPLEMENT SUSTAINABLE PROCESSES IN VALUE CREATION. Life Cycle Assessment – choosing least damaging business processes in terms of environment Pro-active communications – strengthens image position in market and with stakeholders Early, but spread investment – facilitates costs of tech investment. Language and Culture for 09/03/2010 Business - University of Urbino 29
  30. 30. IV. Business impacts and business solutions. Business has an advantage: In the pursuit of growth, business has internalised the need for communications – putting it at the forefront of the knowledge network on the topic of global environmental change. Old, “grow or die” business models must change – spreading profit margins over greater time periods to come into line with environmental changes. Language and Culture for 09/03/2010 Business - University of Urbino 30
  31. 31. IV. Business impacts and business solutions. Globalisation has increased knowledge circulation about global, international, national, regional and local systems Not all institutions can adapt to global changes at the same rate Levels of perceived uncertainty have increased and shifted due to global relationships between business and the environment. Free-market enterprise has the responsibility and opportunity to facilitate mitigation of and adaptation to global change – playing a pro-active role in reducing uncertainty at each level. Language and Culture for 09/03/2010 Business - University of Urbino 31
  32. 32. IV. Business impacts and business solutions. Success will require a cultural and communications shift This must be global Language and Culture for 09/03/2010 Business - University of Urbino 32
  33. 33. THANK YOU!!! Language and Culture for 09/03/2010 Business - University of Urbino 33

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