Globalization Theory Revised1


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  • I’m going to argue that today, employability depends on a range of factors; and that these factors are affecting most of us, in most places, at most of the time. I’m going to argue that there are in fact, three drivers of change behind the employability agenda:
  • As can be seen in the graph, political globalization, in particular, decreased during the last two years. This is due to the decrease the UK’s participation in United Nations peace keeping missions.
  • This is hardly surprising, because globalization affects the underlying structure of economies causing the shift of workers and other factors of production from industry to industry as well as from country to country. According to normative economic theory, the losers from these structural shifts should be compensated from the winners’ gains. Of course, it is stating the obvious that they most often are not. This is one reason for the visible concern about globalization. Transfers from the winners to the losers of globalization are more difficult to implement in practice than in theory. First, the losers have to be identified. Secondly, they have to be compensated without producing adverse incentives to the economy as a whole. At a minimum, the construction of an overall measure of globalization hopefully constitutes a first step in helping to address the first of these issues. The second, more pressing one, remains as one of the most challenging research questions for social scientists.
  • Globalization Theory Revised1

    1. 1. Globalization Theory <ul><li>Prof George Ritzer </li></ul><ul><li>Keele Programme </li></ul><ul><li>Feb 2010 </li></ul>
    2. 2. Globalization <ul><li>The spread of worldwide practices, relations, consciousness, and organization of social life </li></ul><ul><li>(Ritzer, 2008, p. 447). </li></ul>
    3. 3. <ul><li>Sociology : the systematic and scientific </li></ul><ul><li>study of human groups, social </li></ul><ul><li>systems and institutions. </li></ul>Discover Sociology
    4. 4.
    5. 5. Bureaucracies: Max Weber <ul><li>A bureaucracy is a large hierarchical organization that is governed by formal rules and regulations and that has a clear specification of work tasks. </li></ul><ul><li>Needed to accomplish feats such as building cities, governing large populations etc. </li></ul>©Pine Forge Press, an imprint of Sage Publications, 2004
    6. 6. Characteristics of Bureaucracies <ul><li>Division of labor : Specialization of different people or groups in different tasks, characteristic of most bureaucracies </li></ul><ul><li>hierarchy of authority: Ranking of people or tasks in a bureaucracy from those at the top, where there is a great deal of power and authority, to those at the bottom, where there is very little power and authority </li></ul><ul><li>Impersonality </li></ul><ul><li>How does a university provide an example of these 3 characteristics? </li></ul>©Pine Forge Press, an imprint of Sage Publications, 2004
    7. 7. TRANSFORMATIONALISTS <ul><li>Globalization: </li></ul><ul><li>Main force of changes </li></ul><ul><li>on political, economical </li></ul><ul><li>and social levels </li></ul><ul><li>New world order </li></ul><ul><li>which needs some </li></ul><ul><li>adaptation and </li></ul><ul><li>transformation </li></ul>Anthony Giddens
    8. 8. TRANSFORMATIONALISTS <ul><li>Globalization determines new international order </li></ul><ul><li>International relations are influenced by globalization </li></ul><ul><li>States have to adjust their role to the new situation </li></ul><ul><li>New institutions come into picture and new regulations must be applied </li></ul>
    9. 9.
    10. 10. Criticisms – Anthony Giddens <ul><li>Argued globalization is very real. </li></ul><ul><li>Critical globalization treated as primarily an economic phenomenon. </li></ul><ul><li>Globalization influenced by communication. </li></ul><ul><li>Critical people treat globalization as an out there phenomenon, far removed from the individual. </li></ul>
    11. 11. Criticisms – Ulrich Beck <ul><li>Work centered on his critique of globalism. </li></ul><ul><li>Globalism: the view that the world market eliminates or suppliants political action – that is, the ideology of rule by the world market, the ideology of neoliberalism (Gane, 2001, p. 84). </li></ul><ul><li>Reduction of globalization to one dimension – economics. </li></ul><ul><li>Proposed a reflexive theory of globalism based on two main concepts: globality and globalization. </li></ul><ul><li>Globality: refers to the collision of economic, cultural, and political forms in world society (Gane, 2001, p. 84). </li></ul><ul><li>Globalization: denotes the processes through which sovereign national states are criss-crossed and undermined by transnational actors with varying prospects of power, orientations, identities, and networks (Gane, 2001, p. 84). </li></ul>
    12. 12. The Cosmopolitan Perspective <ul><li>An alternative to exclusively economic and security concerns </li></ul><ul><li>Suggests an alternative to internationalism, globalization as well as nationalism </li></ul><ul><li>A key element is the value of global justice </li></ul><ul><li>Recognition of the perspective of the other </li></ul><ul><li>Concern with overlapping allegiances </li></ul><ul><li>Related to the capacity for self-transformation in the cultural and political resources of a society </li></ul><ul><li>Self-problematization and pluralization </li></ul><ul><li>Normative implications of globalization </li></ul>
    13. 13. Criticisms – Zygmunt Bauman <ul><li>Adopted a more critical stance than Giddens or Beck. </li></ul><ul><li>Argued globalization gives rise to new forms of class polarization and uncertainty. </li></ul><ul><li>Believed globalism engendered new forms of social exclusion and formed a new hierarchy of social mobility. </li></ul><ul><li>Felt the winners are new elites who have the freedom to move. The losers are those who remain bound to their locality. </li></ul>
    14. 14. Major Types <ul><li>Cultural Theory </li></ul><ul><li>Economic Theory </li></ul><ul><li>Political Theory </li></ul>
    15. 15. Cultural Theory - Variations <ul><li>In homogeneity, seen either as the transnational expansion of common codes and practices. </li></ul><ul><ul><li>Example - cultural imperialism. </li></ul></ul><ul><li>In heterogeneity, global and local cultural inputs interact. </li></ul>
    16. 16. Cultural Theory - Pieterse <ul><li>Cultural differentialism – cultures unaffected by globalization & closed. </li></ul><ul><li>Cultural convergence - increasing sameness in the direction of dominant groups. </li></ul><ul><ul><li>Example – McDonalization, influenced by Weber. </li></ul></ul><ul><li>Cultural hybridization - mixing of cultures, producing new and unique cultures. A key concept is glocalization. </li></ul><ul><ul><li>Hybridization: emphasizes increasing diversity associated with the unique mixtures of the global and the local (Ritzer, 2008, p. 462). </li></ul></ul><ul><ul><li>Glocalization: the interpenetration of the global and the local resulting in unique outcomes in different geographic areas (Ritzer, 2008, p. 461). </li></ul></ul>
    17. 17.
    18. 18.
    19. 19.
    20. 20. <ul><li>The idea of McDonaldization is associated with the work of George Ritzer </li></ul><ul><li>This does not mean that the world is dominated by McDonalds restaurants </li></ul><ul><li>It suggests that economic activity is becoming standardized and homogenized and organized for efficiency along the lines of fast food outlets </li></ul><ul><li>By the ‘McDonaldization of society’ Ritzer means that other sectors, including hospitals and universities are being organized along similar lines </li></ul>McDonaldization
    21. 21. The Four Pillars of Mc Donaldization (Ritzer, 2000) <ul><li>Efficiency </li></ul><ul><li>Calculability </li></ul><ul><li>Predictability </li></ul><ul><li>Control (via technology) </li></ul>
    22. 22. The McDonaldization of Society <ul><li>Read a short excerpt from Ritzer’s book </li></ul><ul><li> </li></ul>
    23. 23. McDonaldization <ul><li>... McDonaldization,... is the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as of the rest of the world. (George Ritzer) </li></ul>
    24. 24. McDonaldization <ul><li>... McDonaldization,... is the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as of the rest of the world. (George Ritzer) </li></ul><ul><li>The McDonaldization of culture refers to the blending of elements of cultures due to the effects globalization and technology </li></ul>
    25. 25. McDonaldization of Society <ul><li>McDonaldization: The process by which the characteristics and principles of the fast food restaurant come to dominate other areas of social life. </li></ul><ul><ul><li>Streamlined processes </li></ul></ul><ul><ul><li>Uniform goods or services </li></ul></ul><ul><ul><li>Speeded up transactions </li></ul></ul><ul><li>George Ritzer used idea as metaphor for harmful effects of bureaucratization on society. </li></ul><ul><li>Likely to continue because: </li></ul><ul><ul><li>Impelled by economic interests </li></ul></ul><ul><ul><li>Efficiency has become culturally desirable </li></ul></ul><ul><ul><li>Parallels other changes in society </li></ul></ul>©Pine Forge Press, an imprint of Sage Publications, 2004
    26. 26. Economic Theory - Variations <ul><li>Generally see globalization as the spread of neoliberalism, capitalism, and the market economy. </li></ul><ul><li>Some heterogeneity does exist, such as the commodification and the existence of flexible specialization. Interaction of the global with local markets leads to the creation of unique glocal markets. </li></ul>
    27. 27. Economic Theory – Transnational Capitalism: Leslie Sklair <ul><li>Distinguished two systems of globalization </li></ul><ul><ul><li>Capitalist – is the one that is now predominant </li></ul></ul><ul><ul><li>Socialist – is not yet in existence </li></ul></ul><ul><li>Focused on transnational practices that are able to cut across boundaries with the implication that territorial boundaries are of declining importance in capitalist globalization. </li></ul><ul><li>Argued transnational capitalism is providing the basis for the emergence of socialist globalization. </li></ul>
    28. 28. Economic Theory – Empire: Michael Hardt & Antonio Negri <ul><li>Empire: a postmodern reality in which dominance exists but no single nation (or any other entity) is at its center (Ritzer, 2008, p. 466). </li></ul><ul><li>Has no center and is based on juridical power. </li></ul><ul><li>It is everywhere; it is omnipresent. </li></ul><ul><li>Doesn’t exist yet, we’re in the midst of a transition from capitalist imperialism to the dominance of empire. </li></ul><ul><li>Seeks to suspend history so it can exist for eternity, to use biopower to control human nature and population. </li></ul>
    29. 29. Political Theory - Variations <ul><li>Homogenization perspective focus on the worldwide spread of models of the nation-state and the emergence of similar forms of governance throughout the globe. </li></ul><ul><ul><li>Benjamin Barber’s McWorld. </li></ul></ul><ul><li>Barber’s Jihad - localized, ethnic, and reactionary political forces that involve an intensification of nationalism and that lead to greater political heterogeneity. </li></ul>
    30. 30. Political Theory - Examples <ul><li>Liberal theory - from John Locke & Adam Smith. </li></ul><ul><ul><li>Liberal theory: belief in the importance of the free market and the need to allow it to operate free of any impediments, especially those imposed by the nation-state and other political entities (Ritzer, 2008, p. 468). </li></ul></ul><ul><li>Realist theory- states aggressively pursuing their own interests. </li></ul><ul><li>James Rosenau focused on fragmegration </li></ul><ul><ul><li>Fragmegration: the idea that the world is both fragmenting and integrating at the same time (Ritzer, 2008, p. 469). </li></ul></ul><ul><ul><li>World is localizing, decentralizing, and fragmenting while it is simultaneously globalizing, centralizing, and integrating. </li></ul></ul><ul><ul><li>Example: the federal government. </li></ul></ul>
    31. 31. Human Nature & Society <ul><li>Much academic attention has been on globalization. </li></ul><ul><li>Every nation and every person’s life in this world are transformed by globalization. </li></ul><ul><li>Globalization has worked to the advantage of the wealthy nations. The gap between the rich and poor has actually increased. </li></ul>
    32. 32. Scientific Scrutiny <ul><li>Albert (2007) defined four strands of research that have developed on globalization theory: </li></ul><ul><ul><li>understanding of globalization as inherently varied globalization, </li></ul></ul><ul><ul><li>global governance research, </li></ul></ul><ul><ul><li>global history, and </li></ul></ul><ul><ul><li>global/world society research. </li></ul></ul><ul><li>Albert argued necessary to build on these four strands and merge them with the traditional sociological concepts. </li></ul>
    33. 33. Substantive Area <ul><li>In general, can help all. </li></ul><ul><li>Cultural theory can help me, Bryan, & Jen. </li></ul><ul><li>Economic and political theory may be relevant to Johnnie and David’s areas. </li></ul>
    34. 34. Ritzer’s Continuums Macroscopic Microscopic Subjective Objective Globalization Theory Globalization Theory
    35. 35. Burrell & Morgan’s Paradigm Radical Change Order Subjective Objective Functionalist Radical Structuralism Interpretive Radical Humanism McWorld & Jihad by Barber Empire by Hardt & Negri Cultural Theory Cultural Theory Globalization Theory Globalization Theory Fragmegration by Rosenau Transnational Capitalism by Sklair
    36. 36. References <ul><li>Albert, M., & ALBERT. (2007). &quot; Globalization theory&quot;: Yesterday's fad or more lively than ever? International Political Sociology, 1 (2), 165. </li></ul><ul><li>Burrell, G., & Morgan, G. (1994). Sociological paradigms and organisational analysis. Brookfield, VT: Arena. </li></ul><ul><li>Gane, N. (2001). Chasing the 'runaway world': The politics of recent globalization theory. Acta Sociologica, 44 (1), 81. </li></ul><ul><li>Kiely, R. (2005). Globalization and poverty, and the poverty of globalization theory. Current Sociology, 53 (6), 895. </li></ul><ul><li>Martell, L. (2007). The third wave in globalization theory. International Studies Review, 9 (2), 173. </li></ul><ul><li>Ritzer, G. (2008). Modern sociological theory (7th ed.). Boston: McGraw Hill. </li></ul><ul><li>Yeung, H. W. (2002). The limits to globalization theory: A geographic perspective on global economic change. Economic Geography, 78 (3), 285. </li></ul>
    37. 37. Globalization and McDonaldization <ul><li>George Ritzer (2004) , defines McDonaldization as the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world (p.1). </li></ul><ul><li>The principles of this system, Ritzer (2004), are Efficiency, Calculability, Predictability, and Control through Nonhuman Technology (p.6 – 15). </li></ul><ul><li>In essence, it’s fast and reliable. McDonalds is a global icon that is used but can also be replaced with Starbucks or for our purposes </li></ul>
    38. 38. Globalization and McDonaldization <ul><li>Ritzer (2004), stated that McDonaldization is “one of many Globalization processes” where he defines Globalization as a “diffusion of practices, expansion of relations across continents, organization of social life on a global scale, and growth of a shared global consciousness” (p.160). </li></ul>
    39. 39. Glocalization and Grobalization <ul><li>. Ritzer (2004) utilized the globalization theorist, Roland Robertson’s term, Glocalization , the interpenetration of the global and the local, resulting in unique outcomes in different geographic areas, and Ritzer offers his own coined term, Grobalization , the imperialistic ambitions of nations, corporations, organizations, and the like and their desire, indeed need, to impose themselves on various geographic areas (p. 163 - 165.) </li></ul>
    40. 40. Glocalization and Grobalization <ul><li>Ritzer, further, separates them into 4 distinct types of these Globalizations: </li></ul><ul><li>Glocalization of Something such as Local Crafts or Craftsperson </li></ul><ul><li>Glocalization of Nothing such as Tourist Trinkets or Souvenir Shop Clerk </li></ul><ul><li>Grobalization of Something such as Museum or Touring Art Exhibit </li></ul><ul><li>Grobalization of Nothing such as McDonald’s restaurant and Big Mac </li></ul>
    41. 41. Drivers of change: <ul><li>Globalisation and the deregulation of interconnected, global financial markets </li></ul><ul><li>Technological innovation leading to the democratisation of Information </li></ul><ul><li>Decline of heavy industries and the rise of the service sector </li></ul>
    42. 42. PR 1450 Introduction to Globalization Lecture 13 Americanization Chris Rumford
    43. 43. Introduction <ul><li>In the first week of the course I said that the idea that globalization and Americanization are synonymous is one of the myths often associated with globalization </li></ul><ul><li>Nevertheless, the idea that globalization leads to the homogenization of culture is a powerful one … </li></ul><ul><li>… and many people see Americanization as the best example of this homogenization </li></ul><ul><li>Put simply, the argument runs that American culture (Hollywood movies, McDonald's, Coca Cola, Disney) exerts a very powerful influence across the world </li></ul>
    44. 44. Americanization <ul><li>Americanization can be defined as; </li></ul><ul><li>‘ propagation of American ideas, customs, social patterns, industry and capital around the world’ (Williams, quoted in Ritzer, 2003, 36) </li></ul>
    45. 45. Fear of Americanization <ul><li>In the post-WWII period concerns about Americanization were particularly strong in France </li></ul><ul><li>When Coca-Cola first applied for a bottling licence in 1948 the French Communist Party argued that Coca-Cola should be kept out of France because the company acted as a US spy network </li></ul><ul><li>Others argued that it represented a threat to French civilization, or that coke advertising brainwashed the masses (Cohen and Kennedy, 2000: 239) </li></ul>
    46. 46. Starbucks arrives in France <ul><li>Read the article, ‘Starbucks invades Parisian cafe culture’ </li></ul><ul><li>Now read what happened when Starbucks opened in Vienna: </li></ul><ul><li>‘ Viennese in a froth over Starbucks’ </li></ul><ul><li> </li></ul><ul><li>In what way were the responses of the French and Austrians similar? </li></ul><ul><li>Does Starbucks threaten European ‘café culture’? </li></ul>
    47. 47. The influence of American culture <ul><li>So, it must be true that American culture exerts a massive influence across the world </li></ul><ul><li>Perhaps, but it’s only part of the story </li></ul><ul><li>In many respects the US is out of step with global norms and values: </li></ul><ul><ul><li>US sports are home-grown not global (baseball, American football) </li></ul></ul><ul><ul><li>gun culture and gun ownership </li></ul></ul><ul><ul><li>non-abolition of the death penalty </li></ul></ul><ul><ul><li>20 % of US citizens own a passport </li></ul></ul>
    48. 48. Roland Robertson on Americanization <ul><li>As Robertson reminds us (2003: 261), it would be perverse to argue that the Guggenheim museum in Bilbao should fall into the same category of Americanization as Sylvester Stallone movies </li></ul><ul><li>‘ The world is certainly not being Americanized with respect to its religiosity, … rituals of greeting, expressions of the erotic (where the USA still stands for its puritanism), loudness of verbal interaction, and so on’ (Robertson, 2003: 262) </li></ul>
    49. 49. Globalization is not Americanization <ul><li>Read ‘Globalization is not Americanization’ by Joseph Nye </li></ul><ul><li>He argues that ‘Contrary to conventional wisdom, globalization is not “Americanizing” the world </li></ul><ul><li> </li></ul><ul><li>In what ways does Nye think that globalization can transform America? </li></ul>
    50. 50. Global America?: The Cultural Consequences of Globalization <ul><li>This important book takes a critical look at the relationship between America and globalization </li></ul><ul><li>Read my review of this book (and Ritzer’s book The Globalization of Nothing ) in my article, ‘Dude, where's my country? from global America to global nothingness’ </li></ul><ul><li> </li></ul>
    51. 51. Who is the greatest ever American? <ul><li>Who do you think was voted the ‘greatest American’ in a recent BBC poll? </li></ul><ul><li>Read the article, ‘Your greatest American’ </li></ul><ul><li>The winner was not : </li></ul><ul><ul><ul><li>Elvis Presley </li></ul></ul></ul><ul><ul><ul><li>Tiger Woods </li></ul></ul></ul><ul><ul><ul><li>Madonna </li></ul></ul></ul><ul><ul><ul><li>President Kennedy </li></ul></ul></ul><ul><ul><ul><li>Martin Luther King </li></ul></ul></ul><ul><ul><ul><li>Oprah Winfrey </li></ul></ul></ul>
    52. 52. <ul><li>1. Homer Simpson </li></ul><ul><li>  47.17%  </li></ul><ul><li>2. Abraham Lincoln </li></ul><ul><li>9.67%  </li></ul><ul><li>3. Martin Luther King Jnr </li></ul><ul><li>8.54%  </li></ul><ul><li>4. Mr T </li></ul><ul><li>  7.83%  </li></ul><ul><li>5. Thomas Jefferson </li></ul><ul><li>5.68%  </li></ul><ul><li>6. George Washington </li></ul><ul><li>5.12%  </li></ul><ul><li>7. Bob Dylan </li></ul><ul><li>4.71%  </li></ul><ul><li>8. Benjamin Franklin </li></ul><ul><li>4.10%  </li></ul><ul><li>9. Franklin D Roosevelt </li></ul><ul><li> 3.65%  </li></ul><ul><li>10. Bill Clinton </li></ul><ul><li>3.53%  </li></ul><ul><li>(BBC poll: 37,102 votes cast) </li></ul>The winner is …
    53. 53. <ul><li>In week 4 we looked briefly at George Ritzer’’s McDonaldization thesis … which does not simply mean that the world is dominated by McDonald’s restaurants </li></ul><ul><li>Ritzer suggests that economic activity is becoming standardized and homogenized and organized for efficiency along the lines of fast food outlets </li></ul><ul><li>By the ‘McDonaldization of society’ Ritzer means that other sectors, including hospitals and universities are being organized along similar lines </li></ul>McDonaldization
    54. 54. <ul><li>McDonaldization consists of 4 processes of rational organization: </li></ul><ul><ul><li>efficiency </li></ul></ul><ul><ul><li>predictability </li></ul></ul><ul><ul><li>calculability </li></ul></ul><ul><ul><li>replacement of human with non-human technology (Ritzer, 2003, 34) </li></ul></ul><ul><li>For Ritzer, McDonald’s restaurants represent the ‘paradigm case’ of a much wider phenomenon </li></ul>McDonaldization of society
    55. 55. McDonaldization and Americanization <ul><li>According to Ritzer (2003, 35) Americanization involves the following: </li></ul><ul><ul><ul><li>worldwide diffusion of US industrial model post-WWII </li></ul></ul></ul><ul><ul><ul><li>worldwide diffusion of US consumption model in 1990s </li></ul></ul></ul><ul><ul><ul><li>global marketing of US media (TV, Hollywood) </li></ul></ul></ul><ul><ul><ul><li>global marketing of US commodities (Coca Cola, clothes) </li></ul></ul></ul><ul><ul><ul><li>US diplomatic support of democratization </li></ul></ul></ul><ul><ul><ul><li>training of foreign elites in US universities </li></ul></ul></ul><ul><ul><ul><li>use of international labour market and natural resources by US </li></ul></ul></ul>
    56. 56. McDonaldization of America? <ul><li>Ritzer says that, ‘it seems odd, to say the least, to think of the Americanization of America. However, we can clearly think in terms of the McDonaldization of America’ (Ritzer, 2003: 41) </li></ul><ul><li>The McDonaldization of America involves ‘driving out cultural and regional traditions and replacing them with a single, homogenous system’ (Ritzer, 2003: 41) </li></ul>
    57. 57. The McDonaldization of Society <ul><li>Read a short excerpt from Ritzer’s book </li></ul><ul><li> </li></ul>
    58. 58. Europe versus America? <ul><li>In recent years there has been much talk of the major differences between America and Europe </li></ul><ul><li>The US-led invasion of Iraq in 2003 divided Europe </li></ul><ul><li>In addition to the UK, Spain, Portugal, Poland, Hungary, the Czech Republic, Italy and Denmark also pledged support for the US </li></ul><ul><li>This caused France and Germany to propose the idea of a ‘core Europe’ which could, by embracing European values, provide an alternative model for acting in the world </li></ul>
    59. 59. Old Europe versus New Europe <ul><li>In the short-term however, it led to the idea that Europe was divided between ‘old’ and ‘new’ Europe </li></ul><ul><li>‘ Old’ Europe was associated with France and Germany and opposition to the war </li></ul><ul><li>‘ New’ Europe was more pro-American and pro-invasion </li></ul><ul><li>US Secretary of State, Donald Rumsfeld said, ‘if you look at vast numbers of other countries in Europe, they’re not with France and Germany … they’re with the US’ </li></ul>
    60. 60. Are Americans from Mars and Europeans from Venus? <ul><li>European values: </li></ul><ul><ul><li>secularization </li></ul></ul><ul><ul><li>trust in the state </li></ul></ul><ul><ul><li>social solidarity </li></ul></ul><ul><ul><li>welfare state </li></ul></ul><ul><ul><li>desire for multilateral world order based international law </li></ul></ul><ul><ul><li>human rights </li></ul></ul><ul><ul><li>(Habermas and Derrida, 2003) </li></ul></ul><ul><li>American values: </li></ul><ul><ul><li>free enterprise </li></ul></ul><ul><ul><li>laissez faire ideology </li></ul></ul><ul><ul><li>limited role of government </li></ul></ul><ul><ul><li>social inequality (American dream) </li></ul></ul><ul><ul><li>role of military </li></ul></ul><ul><ul><li>(Pieterse, 2003) </li></ul></ul>
    61. 61. Living in different worlds <ul><li>According to Beck (2007: 47), ‘Europeans and North Americans are living in different worlds. The way it looks to the Americans, the Europeans are suffering from a form of hysteria in relation to the environment, [climate change] while, to many Europeans, US Americans are paralysed by an exaggerated fear of terrorism’ </li></ul>
    62. 62. American exceptionalism? <ul><li>The USA alone represents approximately a third of the world military spending (Heisbourg, quoted in Pieterse, 2003: 76) </li></ul><ul><li>The USA ranks first in the number of incarcerations among nations … and stands alone among wealthy countries in its extensive use of the death sentence (Pieterse, 2003: 76) </li></ul><ul><li>The USA transfers around 0.1% of GNP to developing countries annually (UN target is 0.7%) (Pieterse, 2003: 86) … of which a third goes to Israel, and a fifth to Egypt </li></ul>
    63. 63. The US and global governance <ul><li>According to Pieterse (2003: 87-90): </li></ul><ul><ul><li>USA treats the UN as a rival for world leadership </li></ul></ul><ul><ul><li>The UN is perceived as un-American in that it follows a different conception of world order </li></ul></ul><ul><ul><li>‘ global governance’ is a non-starter in conservative American circles </li></ul></ul>
    64. 64. Concluding comments <ul><li>The relationship between Americanization and globalization is far from straightforward </li></ul><ul><li>The US drives globalization in many ways (e.g. Washington consensus, cultural exports) </li></ul><ul><li>But the US is also out of step in other respects (unilateralism, human rights) </li></ul><ul><li>The same processes of globalization that act on the rest of the world also act on the US </li></ul>
    65. 65. References <ul><li>Beck, U. 2007: ‘Reinventing Europe – a cosmopolitan vision’ in C. Rumford (ed) Cosmopolitanism and Europe (Liverpool University Press) </li></ul><ul><li>Cohen, R. and Kennedy, P. 2000: Global Sociology (Palgrave) </li></ul><ul><li>Habermas, J. andDerrida, J. 2003: ‘February 15, or, what binds European together’ in D. Levy, M. Pensky and J. Torpey (eds), Old Europe, New Europe, Core Europe: Transatlantic Relations after the Iraq War ( Verso) </li></ul><ul><li>Pieterse, J. 2003: ‘Hyperpower exceptionalism: globalization the American way’ in Beck, Sznaider and Winter (eds) Global America?: The Cultural Consequences of Globalization (Liverpool University Press) </li></ul><ul><li>(cont.) </li></ul>
    66. 66. <ul><li>Ritzer, G. 1996: The McDonaldization of Society. (Pine Forge Press) </li></ul><ul><li>Ritzer, G. and Stillman, T. 2003: ‘Assessing McDonaldization, Americanization and globalization’ in Beck, Sznaider and Winter (eds) Global America?: The Cultural Consequences of Globalization (Liverpool University Press) </li></ul><ul><li>Robertson, R. 2003: ‘Rethinking Americanization’ in Beck, Sznaider and Winter (eds) Global America?: The Cultural Consequences of Globalization (Liverpool University Press) </li></ul>References (cont.)
    67. 67. McDonald's Internationally By: Eric Kenny Ekta Shah Rachel Sigley George Tsakanias Mariemir Viruet
    68. 68. <ul><li>We’re hoping from this presentation you will: </li></ul><ul><ul><li>Learn a bit about the history of McDonald’s. </li></ul></ul><ul><ul><li>Understand just how much international expansion McDonald’s is partaking in. </li></ul></ul><ul><ul><li>Criticism/Opposition to McDonald’s </li></ul></ul><ul><ul><li>SWOT Analysis </li></ul></ul><ul><ul><li>Few small legal cases involving McDonald’s </li></ul></ul><ul><ul><li>McDonald’s in India and China </li></ul></ul><ul><ul><ul><li>Infrastructure </li></ul></ul></ul><ul><ul><ul><li>Politics </li></ul></ul></ul>
    69. 69. <ul><li>Began in 1940 </li></ul><ul><li>Located in 122 Countries </li></ul><ul><li>51 million people are served a day at 30,000 different locations </li></ul><ul><li>Independent local business people own and operate more than 70% of McDonald’s globally </li></ul><ul><li>In 2004, Morgan Spurlock came out with a documentary titled Super Size Me that looked at the fast food corporation as a contributor to obesity </li></ul><ul><li>In about 30 markets outside the U.S., McDonald’s restaurants are operated by developmental licensees who own the business and pay McDonald’s royalties based on a percentage of sales. </li></ul>Quick Facts About McDonald’s
    70. 70. <ul><li>Began by two brothers: </li></ul><ul><ul><li>Dick McDonald </li></ul></ul><ul><ul><li>Mac McDonald </li></ul></ul><ul><li>Started off as a hot dog stand in CA [1937] </li></ul><ul><li>Hot Dog stand moves to Rt.66 and becomes a Hamburger Joint. </li></ul><ul><ul><li>Offers 25 menu items </li></ul></ul><ul><ul><li>Becomes car hop </li></ul></ul><ul><ul><li>Highly profitable teen hang out </li></ul></ul>1st McDonald’s Hamburger Cost $.15 In the beginning...
    71. 71. First McDonald's
    72. 72. <ul><li>Brothers realize Burgers were most profitable </li></ul><ul><li>Close down restaurant and reopen as a “Speedy Service System” </li></ul><ul><ul><li>Offer only burgers, shakes, and fries </li></ul></ul><ul><li>McDonald’s is franchised to several locations [1953] </li></ul><ul><ul><li>First McDonald’s to feature the Golden Arches </li></ul></ul><ul><li>Ray Kroc discovers McDonald’s [1954] </li></ul><ul><ul><li>Creates “McDonald’s System’s Inc” to start franchising [1955] </li></ul></ul><ul><ul><li>Renamed to “McDonald’s Corporation” [1960] </li></ul></ul>A McDonald’s in Downey, CA is the oldest operating McDonald’s today [opened in 1953] In the beginning...
    73. 73. <ul><li>In 1967 the first McDonald’s outside of the US opens up </li></ul><ul><ul><li>Richmond, British Columbia </li></ul></ul><ul><li>Big Mac and Apple Pie introduced [1968] </li></ul><ul><li>1971 McDonalds really starts going global </li></ul><ul><ul><ul><ul><ul><li>Asian: Tokyo Ginza District, Japan </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>European: Netherland, Munich, Germany </li></ul></ul></ul></ul></ul><ul><li>1974 – McDonald’s Starts the Ronald McDonald House Charities as a non-profit organization to improve the health and well being of children. In 1985 the first RMHC opened internationally in the Netherlands. </li></ul>McDonald’s in Germany offered Beer as a part of their menu In the beginning...
    74. 75. <ul><li>1967 - Canada & Puerto Rico (first restaurants outside the U.S.) </li></ul><ul><li>1971 - Tokyo, Japan, Amsterdam, Netherlands & Sydney, Australia </li></ul><ul><li>1979 - Rio de Janeiro, Brazil </li></ul><ul><li>1990 - Moscow, Russia & China </li></ul><ul><ul><li>The Chinese characters &quot;Mai Dang Lao&quot; are used to phonetically approximate the word &quot;McDonald's“. </li></ul></ul><ul><li>1992 - Casablanca, Morocco & Czech Republic </li></ul><ul><li>1993 - The first McDonald's at sea opens aboard the Silja Europa, the world's largest ferry sailing between Stockholm and Helsinki. </li></ul><ul><li>1994 - Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad and United Arab Emirates. </li></ul><ul><li>1996 - First restaurant opens in India. </li></ul><ul><ul><li>50-50 joint venture partnership between McDonald’s Corporation (USA) and two Indian businessmen. </li></ul></ul><ul><ul><li>Two separate operations in Northern & Western India. </li></ul></ul><ul><ul><li>Partners and their management teams trained extensively in Indonesia & the U.S. </li></ul></ul>Across the Globe...
    75. 76. <ul><li>India: Sandwich sauces, shakes and soft-serve products do not contain eggs in order to offer more variety to vegetarian customers. </li></ul><ul><li>Uruguay: McHuevo (hamburger with a poached egg on top) </li></ul><ul><li>Norway: McLaks (grilled salmon sandwich with dill sauce) </li></ul><ul><li>Germany: Beer </li></ul><ul><li>Thailand: Samurai Pork Burger (sausage patty in teriyaki sauce) </li></ul><ul><li>Taiwan: Rice Burger </li></ul>International Taste Offerings
    76. 77. <ul><li>U.S. fast food market showed signs of saturation by early 1980’s after 3 decades of rapid growth. </li></ul><ul><li>Foreign revenues and profit have grown 22% annually since early 1980’s. </li></ul><ul><li>By end of 2000, the foreign restaurants generated $21B (53%) of the corporation’s $40B in revenues. </li></ul><ul><li>Foreign markets are sources of valuable new ideas. </li></ul>Importance of Expanding Internationally
    77. 78. <ul><li>Dutch </li></ul><ul><ul><li>Prefabricated modular restaurants (temporary & easily moved) </li></ul></ul><ul><ul><li>Widely used for big outdoor events </li></ul></ul><ul><li>Sweden </li></ul><ul><ul><li>Enhanced meat freezer now used throughout entire firm </li></ul></ul><ul><li>Singapore </li></ul><ul><ul><li>Small, limited menu satellite restaurants (low overhead) </li></ul></ul><ul><ul><li>Now in hospitals and sports arenas in the U.S. </li></ul></ul>Foreign Markets Valuable Idea Source
    78. 79. <ul><li>Expansion rate slowed in the last few years due to declining operating margins and focus on improving existing restaurants and menu offerings. </li></ul><ul><li>International expansion was led by late CEO, Jim Cantalupo, who passed away of a heart attack in April 2004, age 60. </li></ul><ul><li>By the late 1990‘s, McDonald’s aggressive expansion resulted in cannibalization of its own sales because stores were built too close to each other. </li></ul><ul><li>In 2003,the focus changed from adding new restaurants to building sales at existing restaurants. </li></ul><ul><ul><li>Struggling European and South Korean restaurants </li></ul></ul><ul><ul><ul><li>U.K. - public concerns over unhealthy menu items </li></ul></ul></ul><ul><ul><ul><li>Germany & South Korea - adverse economic conditions </li></ul></ul></ul><ul><ul><li>Between 2003 and 2004, underperforming restaurants were closed in the U.S., Japan, Latin America and Jamaica. </li></ul></ul><ul><ul><li>SARS concerns had a negative impact on sales in 2003 in many Asian countries. </li></ul></ul>Expansion... Jim Cantalupo
    79. 81. <ul><li>McDonald's has most certainly had a profound effect on China. </li></ul><ul><li>When the first McDonald's opened in Beijing more than a dozen years ago, 40,000 people lined up to observe a Big Mac and get their picture taken with the infamous Ronald McDonald. </li></ul><ul><li>McDonald's is growing faster in China than in the United States. </li></ul><ul><li>McDonald’s owns & operates more than 600 stores across 105 cities in China. </li></ul><ul><li>More than 100 more McDonald's stores will be added annually to Chinese cities within the coming years. </li></ul>McDonald's In China
    80. 82. <ul><li>While offering the basic burger and fries, McDonald’s in China also offers: </li></ul><ul><ul><li>Szechuan-style spicy chicken wings </li></ul></ul><ul><ul><li>Seafood Soup </li></ul></ul><ul><ul><li>Rice </li></ul></ul><ul><ul><li>Oriental Sauces </li></ul></ul><ul><ul><li>Taro and Red Bean Dessert </li></ul></ul>Red Bean Dessert China Menu Items
    81. 83. <ul><li>In 1992, McDonald’s opened its first restaurant in Beijing and the restaurant enjoyed good sales. </li></ul><ul><li>2 years into the 20-year lease, the city government told McDonald’s to move the restaurant. </li></ul><ul><li>The location would be used for another complex planned by a developer from Hong Kong. </li></ul><ul><li>McDonald’s tried to enforce its contract by taking the government to court, but it lost the case. </li></ul><ul><li>In the West, contract law governs business transactions. </li></ul><ul><li>In China, personal power and relationships/connections determine how business is conducted. </li></ul>In China, It's All About Who You Know
    82. 84. <ul><li>Guanxi literally means relationships </li></ul><ul><li>Concept is deeply rooted in Chinese culture (based on 2000-year-old Confucian ideology). </li></ul><ul><li>Guanxi is crucial for building long-term relationships and doing business in China. </li></ul><ul><li>McDonald’s did not have the same connections as the Chinese developer. </li></ul><ul><li>By not accepting the government’s decision gracefully and taking it to court, McDonald’s damaged its reputation with the city government </li></ul>...Guanxi... Chinese Symbol for Guanxi
    83. 85. <ul><li>In 1997 China passes first franchise law. Prior to this, all McDonald’s restaurants were corporately owned and operated. </li></ul><ul><li>Demand for western style conveniences is increasing as China’s middle class grows. </li></ul><ul><ul><li>Drive-through fast food windows </li></ul></ul>In December 2005, China got it’s first drive thru in the heart of the central business district of Dongguan Guangdong Province, thirty years after the first McDonald’s US drive thru was established
    84. 86. McDonald's In India
    85. 87. <ul><li>While there are some 150-200 million middle-class people in India that can afford McDonald’s there is also a vast majority of the Indian population that is still too poor to afford it </li></ul><ul><li>Limited menu, fresh food, fast service and affordable prices have been the pillars behind McDonald’s success in India. Intense competition and demands for a wider menu, drive-through and sit-down meals - encouraged the fast food giant to customize product variety without hindering the efficacy of its supply chain </li></ul>McDonald’s in India offers home delivery. Also if you go to a McDonald’s restaurant and order food, you take a seat and they bring it to your table. McDonald's In India
    86. 88. <ul><li>For thousands of years, India's Hindu culture has revered the cow and does not eat the meat of the scared cow. In addition there are some 140 million Muslims in India, who do not eat pork. </li></ul><ul><li>To respect and adapt to Indian culture, McDonald's created an Indian version of burgers which are made from mutton and chicken. All foods are segregated vegetarian and non-vegetarian, due to the fact that many Hindus are vegetarians. </li></ul>
    87. 89. <ul><li>Vegetarian Menu </li></ul><ul><ul><li>Veg McCurry </li></ul></ul><ul><ul><li>McAloo Tikki </li></ul></ul><ul><ul><li>McVeggie </li></ul></ul><ul><ul><li>Pizza McPuff </li></ul></ul><ul><ul><li>Crispy Chinese </li></ul></ul><ul><ul><li>Paneer Salsa Wrap </li></ul></ul>Indian Menu Items
    88. 90. <ul><li>Non-Vegetarian Menu </li></ul><ul><ul><li>Chicken Maharaja Mac </li></ul></ul><ul><ul><li>McChicken </li></ul></ul><ul><ul><li>Filet-O-Fish </li></ul></ul><ul><ul><li>Chicken Mexican Wrap </li></ul></ul><ul><ul><li>Chicken McGrill </li></ul></ul><ul><ul><li>Chicken McCurry Pan </li></ul></ul>Indian Menu Items
    89. 91. <ul><li>“ McDonald’s strategy of positioning itself as a family restaurant with an emphasis on local menus and local values seems to be working well in India. But to what extent McDonald’s can continue its growth in India remains uncertain. McDonald’s is more than just another American fast food chain. It carries a symbolic load of Americanness—American variant of capitalism and its overwhelming domination over the global economy. It is also a symbol of American cultural imperialism. For this reason, McDonald’s operations in India, like other parts of the world, will continue to face opposition from religious fundamentalists, environmentalists, protectionists, animal rights activists, and anti-globalization protestors. “ </li></ul>Quoted from: Problems in India
    90. 92. <ul><li>New menu items specifically for vegetarians are introduced. </li></ul><ul><li>It is made aware that the food is produced locally to show investment in Indian Infrastructure. </li></ul><ul><li>McDonald’s developed and maintains community parks to prevent public resentment. </li></ul>
    91. 93. <ul><li>Unique supply chain created: </li></ul><ul><ul><li>Operates best when chain is balanced </li></ul></ul><ul><ul><li>Necessary to maintain food freshness </li></ul></ul>McDonald’s transferred its food processing centers to India to increase efficiency
    92. 94. <ul><li>In Mumbai, there is an event called McDonald’s Spotlight. This is an annual interschool performing arts competition. This competition is open to all secondary school students. </li></ul><ul><li>Since 2002, McDonald’s has participated in World Children’s Day. On this day, McDonald’s raises money for any charity of their choice. [Usually educational programs] </li></ul>
    93. 95. <ul><li>Sociologist George Ritzer, author of “The McDonaldization of Society”, states that McDonaldization is a transformation of rationalization, moving away from traditional to rational modes of thought, and scientific management.  </li></ul><ul><li>Ritzer has highlighted 4 major concepts of McDonaldization: </li></ul><ul><ul><li>Efficiency - the optimal method for accomplishing a task </li></ul></ul><ul><ul><li>Calculability - objective should be quantifiable (i.e. sales) rather than subjective (i.e. taste)                  </li></ul></ul><ul><ul><li>Predictability - standardized and uniform services </li></ul></ul><ul><ul><li>Control - standardized and uniform employees </li></ul></ul>
    94. 96. <ul><li>These concepts have led to the stability and expansion of McDonald’s in the overseas market, especially in East Asia, where more and more McDonald’s franchises are opening constantly, leading to the belief that maybe one day every restaurant will be taken over by McDonald’s itself. </li></ul><ul><li>McDonald’s franchises in various countries also offer a variety of meals to better help customers in choosing food that is best accustomed to people’s beliefs. </li></ul><ul><ul><li>For example, various faiths don’t permit people eating pork or beef. The substituting of an existing meal with an alternative food can lead to the creation of new menu items, therefore, keeping the volume of customers high at all times as long as the expectations of customers are met with the outcome of higher revenues. </li></ul></ul>
    95. 97. <ul><li>Declining market share </li></ul><ul><li>Weak product development </li></ul><ul><li>Disgruntled franchisees </li></ul><ul><li>Quality and taste of products </li></ul><ul><li>Slowed revenue and income growth </li></ul>
    96. 98. <ul><li>McJobs Program: </li></ul><ul><ul><li>McDonald’s is one of the top 25 companies that has focused in hiring people with disabilities, giving them a chance to make a living like everyone else, leading to the creation of the McJobs Program. </li></ul></ul><ul><ul><li>Looking to employ disabled people is what McDonald’s focuses on because, according to John Yeh, “employment of persons with disabilities is a win-win situation for employers, persons with disabilities, and service providers.” </li></ul></ul><ul><ul><li>Considered the best employer for Asians </li></ul></ul><ul><li>McDonald’s worldwide willingly hires people constantly in order to supplement the growing need of employees for its growing franchise in over 101 countries. </li></ul>
    97. 99. <ul><li>The American fast-food market has become increasingly competitive as rivals such as Burger King, Wendy's and Taco Bell fight to maintain their market share. </li></ul><ul><li>Strength of competition </li></ul><ul><li>More health-conscious consumers </li></ul><ul><li>Changing demographics </li></ul><ul><li>Fluctuation of foreign exchange rates; Economies </li></ul>
    98. 100. <ul><li>Focus on already existing operations before continuing expansion in order to increase their profit margin. </li></ul><ul><li>Continue focusing on expanding in India and China because they are both developing countries with increasing economies and high populations. </li></ul><ul><li>Add more menu choice and variety to promote healthier lifestyles. </li></ul>
    99. 101. <ul><li>Today, the company operates more than 30,000 restaurants in approximately 120 countries on five continents </li></ul><ul><li>Since its founding in 1955, McDonald’s has sold well over 100 billion hamburgers </li></ul><ul><li>McDonald’s prepares more than 6.8 million pounds of French fries every day </li></ul><ul><li>Advertisting Age named McDonald’s marketer of the year for 2004 </li></ul><ul><li>Ranked 5 th for Social Responsibility by Fortune magazine </li></ul><ul><li>All franchisees are independent, full-time operators </li></ul><ul><li>Approximately 70% of McDonald’s restaurant businesses world-wide are owned and operated by franchisees </li></ul>McFactoids
    100. 102. <ul><li>Often blamed for Obesity </li></ul><ul><li>Blamed for excessive packaging waste </li></ul><ul><li>Anti-Globalization protests </li></ul><ul><li>Seen as American symbol of economical resource dominance </li></ul><ul><li>Exploitative advertising </li></ul><ul><li>Suffering and exploitation of livestock </li></ul><ul><li>High calorie foods </li></ul>Criticism...
    101. 103. <ul><li>“ In 1994, McDonald's successfully forced Elizabeth McCaughey of the San Francisco Bay Area to change the trading name of her coffeeshop McCoffee , which had operated under that name for 17 years. </li></ul><ul><li>In 1994, McDonald's sued a restaurant in Kingston, Jamaica, because of trademark infringement, although it had opened in 1971, before McDonald's entered the Jamaican market. </li></ul><ul><li>In 1996, McDonald's lost a legal battle at the Danish Supreme Court to force Allan Pedersen, a mincemeat sandwich vendor, to drop his shop name McAllan . </li></ul><ul><li>In 1996, McDonald’s forced Scottish sandwich shop owner Mary Blair of Fenny Stratford, Buckinghamshire to drop McMunchies as her trading name. </li></ul><ul><li>In 2001, McDonald's lost a 9-year legal action against Frank Yuen of McChina Wok Away , Chinese takeway outlets in various part of the UK. </li></ul><ul><li>In South Africa, however, McDonald's had to battle against the country's trademark laws, which stated that a registered trademark had to be used within a certain period of time. This resulted in a local company announcing plans to launch its own fast-food chain using the McDonald's name, although the South African High Court eventually ruled in McDonald's favor. “ </li></ul> ...In the courts
    102. 104. <ul><li>In 2005 McDonald’s had some opposition when they decided to name one of their burgers in Africa the “McAfrika” </li></ul><ul><ul><li>Believed to have a negative connotation </li></ul></ul><ul><ul><li>Improper to the starving people of Africa </li></ul></ul>“ &quot;It's inappropriate and distasteful to launch a hamburger called “McAfrika' when large portions of southern Africa are on the verge of starvation&quot;
    103. 105. <ul><li>To extend the shelf life of carrots that come with a happy meal, McDonald’s was dipping their carrots in hydrogen peroxide and mixing it with acetic acids </li></ul><ul><li>It is said by some that this is not necessarily unhealthy, but still, would you want to be eating hydrogen peroxide? </li></ul>
    104. 106. <ul><li>In 2001 McDonald’s was sued by three vegetarians, including two Hindus, claiming that McDonald’s used beef fat in the oil to make their fries despite McDonald’s claim that it was using 100% vegetable oil. </li></ul><ul><li>In 2002, McDonald’s conceded by offering $10 million in compensation to the plaintiffs and offered an apology for misleading the public about the ingredients used for their fries and hash browns. </li></ul>
    105. 107. <ul><li>According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the US has at some time been employed by McDonald's. The book also states that McDonald’s is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, and potatoes. </li></ul>You Don't Say?
    106. 108. <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>“ McDonald’s Everywhere” Management Focus Article </li></ul><ul><li>Hill, Charles (2005). Global Today . McGraw Hill College, NY. p.90-92 </li></ul>References
    107. 109. Globalization Democracy and politics Culture Economics Media and communication Technologies
    108. 110. Measuring Globalization and its Consequences Axel Dreher Globalisation and the Labour Market, Department for Business Enterprise and Regulatory Reform, December 13, 2007
    109. 112. Structure <ul><li>Measuring Globalization: the KOF index </li></ul><ul><ul><li>Concept, measurement, results </li></ul></ul><ul><li>Globalization and inequality </li></ul><ul><ul><li>Hypotheses </li></ul></ul><ul><ul><li>Data and Method </li></ul></ul><ul><ul><li>Results </li></ul></ul><ul><li>The impact of globalization on policy and performance </li></ul><ul><li>Policy implications </li></ul>
    110. 113. Measurement of “Globalization” <ul><li>Trade Openness </li></ul><ul><li>FDI </li></ul><ul><li>Capital Account Restrictions </li></ul><ul><li>Barriers to Trade </li></ul><ul><li> Only Economic Globalization </li></ul>
    111. 114. Drawbacks of previous attempts to measure globalization <ul><ul><li>Most studies focus on economic dimension only </li></ul></ul><ul><ul><li>Exception: A.T. Kearny/ Foreign Policy Magazine </li></ul></ul><ul><ul><li>Ad hoc determinants of weights </li></ul></ul><ul><ul><li>Trade/ Capital restrictions missing </li></ul></ul><ul><ul><li>Lack of time dimension/ comparability </li></ul></ul>
    112. 115. Definition of Globalization <ul><li>“ Globalization” includes social, political as well as economic factors. It may be defined as the intensification of cross-national economic, political, cultural, social and technological interactions that lead to the establishment of trans-national structures and the integration of economic, political and social processes on a global scale. </li></ul><ul><li>(Dreher, Gaston, Martens 2008) </li></ul>
    113. 116. Definition of Globalization <ul><ul><li>economic globalization, characterized as long distance flows of goods, capital and services as well as information and perceptions that accompany market exchanges </li></ul></ul><ul><ul><li>social globalization, expressed as the spread of ideas, information, images, and people </li></ul></ul><ul><ul><li>political globalization, characterized by a diffusion of government policies </li></ul></ul>
    114. 117. KOF-Index <ul><ul><li>Broad focus </li></ul></ul><ul><ul><li>Much wider sample </li></ul></ul><ul><ul><li>Weights determined by objective statistical method </li></ul></ul><ul><ul><li>Trade/ Capital restrictions included </li></ul></ul><ul><ul><li>Comparability over time </li></ul></ul>
    115. 118. Calculation of the KOF-Index <ul><ul><li>Variables transformed on 1-100 scale, where higher values represent more globalization </li></ul></ul><ul><ul><li>Weights determined by PCA (panel normalization) </li></ul></ul><ul><ul><li>Missing values linearly interpolated </li></ul></ul><ul><ul><li>Overall Index reported as missing if more than 1/3 of its data (weight) is missing </li></ul></ul><ul><ul><li>Results in data for 122 countries, 1970-2004 </li></ul></ul>
    116. 119. 2007 Index of Globalization
    117. 120. 2007 Index of Globalization
    118. 121. 2007 Index of Globalization
    119. 126. 2007 Economic index of Globalization
    120. 127. 2007 Social index of Globalization
    121. 128. 2007 Political index of Globalization
    122. 129. 2007 KOF index of Globalization
    123. 130. 2007 KOF index, world average
    124. 131. Index of Globalization by regions
    125. 132. Index of Globalization by income
    126. 133. Index of Globalization, UK
    127. 134. Application: Has globalisation increased inequality? <ul><li>Dreher and Gaston, Does globalisation increase inequality? Forthcoming, Review of International Economics . </li></ul>
    128. 135. Trade and labour markets <ul><li>Rising inequality has coincided with the “second wave” of globalisation </li></ul><ul><ul><li>Trade liberalisation has progressed; concerns about imports from LDCs have been prominent. Stolper-Samuelson ? </li></ul></ul><ul><ul><li>FDI increases demand for skilled labour in developed and less-developed economies </li></ul></ul><ul><ul><li>A few authors have found significant labour market effects attributable to increasing import penetration </li></ul></ul><ul><li>Rodrik (1997) argues that if liberalising trade is important, it follows that trade must surely also be important for labour market earnings and the distribution of income </li></ul>
    129. 136. McDonaldization of the global economy? <ul><li>Kuznets (1955) argued that industrialisation should witness an eventual declines in inequality. The “inverted-U” hypothesis </li></ul><ul><li>Political and social integration are also important for income inequality </li></ul><ul><ul><li>Atkinson (1997): Social norms are very important! </li></ul></ul><ul><ul><li>Moreover, trade liberalising policies often bundled with privatisation and deregulation measures as well as changes to social policies (Lindert and Williamson, 1991) </li></ul></ul><ul><ul><li>Globalisation is sometimes equated with “Americanisation” </li></ul></ul><ul><ul><li>Political globalisation </li></ul></ul><ul><ul><ul><li>A race-to-the-bottom (or a race-to-the-top)? </li></ul></ul></ul>
    130. 137. Hypotheses Key : Theory predicts: +/-/? = positive/negative/unknown effect. Predicted effects of globalisation on inequality Dimension of globalisation OECD LDC’s All Economic + +/- ? Political +/- +/- ? Social +/? ? ? Overall +? ? ?
    131. 138. Towards an empirical Model <ul><ul><li>Up to 100 countries; 5 year averages, 1970-2000 </li></ul></ul><ul><ul><li>Dependent variables: </li></ul></ul><ul><ul><ul><li>Industrial Wage Inequality measured by Theil’s T-statistic (UTIP) </li></ul></ul></ul><ul><ul><ul><li>Household Income Inequality measured by Gini coefficient (Francois and Rojas-Romagosa, 2005) </li></ul></ul></ul><ul><ul><li>Explanatory variables: Lagged endogenous variable; Democracy Index; GDP per capita (and its square); Age-dependency ratio; Population growth; Government consumption </li></ul></ul>
    132. 139. (log) wage inequality over time
    133. 140. (log) income inequality over time
    134. 141. Results for overall index, OLS
    135. 142. Results for overall index, GMM
    136. 143. Results for sub-indices, OLS
    137. 144. Results for sub-indices, GMM
    138. 145. Is there a bottom line? <ul><ul><li>Globalization exacerbated inequality; in particular: </li></ul></ul><ul><ul><ul><li>income inequality in OECD countries </li></ul></ul></ul><ul><ul><li>No robust impact in less developed countries </li></ul></ul><ul><ul><li>Not obvious which dimension of globalization drives the result </li></ul></ul>
    139. 146. The impact of Globalization on policy and outcomes <ul><ul><li>Economic growth? (Dreher, 2006, Applied Economics ) </li></ul></ul><ul><ul><li>Government policies? (Dreher, 2006, EJPE ) </li></ul></ul><ul><ul><li>Expenditure composition? (Dreher, Sturm, Ursprung, 2007, Public Choice ) </li></ul></ul><ul><ul><li>Union density (Dreher and Gaston 2007, Kyklos ) </li></ul></ul>
    140. 147. The impact of Globalization on policy and outcomes
    141. 148. Policy implications? <ul><ul><li>Globalization not universally good or bad </li></ul></ul><ul><ul><ul><li>increases economic growth, but also inequality </li></ul></ul></ul><ul><ul><ul><li>beneficial to the natural environment in the medium term, but harmful in the longer run </li></ul></ul></ul><ul><ul><ul><li>deunionization increases </li></ul></ul></ul><ul><ul><li>Seems to be positive in net terms </li></ul></ul><ul><ul><li>But also produces losers </li></ul></ul><ul><ul><li>Compensation possible? Transfers more difficult to implement in practice than in theory </li></ul></ul><ul><ul><ul><li>First, the losers have to be identified </li></ul></ul></ul><ul><ul><ul><li>Second, they have to be compensated without producing adverse incentives to the economy as a whole </li></ul></ul></ul><ul><ul><li>Index is first step in helping to address the first of these issues. The second, more pressing one, remains as one of the most challenging research questions for social scientists </li></ul></ul>
    142. 149. Globalization Lecture 2 - Dimensions What is it? Global capitalist economy & diminishing political power of nation-state governments (Marxists & Right-wingers) Social relations- “stretching” (Giddens) Culture – a sense of “global consciousness” (Robertson)
    143. 150. <ul><li>1) Globalization of Politics </li></ul><ul><li>- The end of the nation-state? </li></ul><ul><li>2) Globalization of Social Relations </li></ul><ul><li>- The stretching of social relations </li></ul><ul><li>3) Globalization of Culture </li></ul><ul><li>- Homogenization: Cultural imperialism </li></ul><ul><li>- Culture clashes </li></ul><ul><li>- Heterogenization </li></ul>
    144. 151. Globalization of Politics <ul><li>Nation-state has sovereign power : </li></ul><ul><li>- Treaty of Westphalia (1648) </li></ul><ul><li>- Draws up defined borders </li></ul><ul><li>- Each state controls affairs in its own territory. SOVEREIGNTY </li></ul><ul><li>- Other states cannot interfere in a state’s business </li></ul><ul><li>Globalization undermines sovereignty of states i.e. undercuts power of a state to control things in its territory </li></ul><ul><li>Martin Albrow : the nation-state is rapidly losing power </li></ul>
    145. 152. <ul><li>Nation-state IS losing power </li></ul><ul><li>Economically : </li></ul><ul><li>1) power of TNCS </li></ul><ul><li>2) forces of world market </li></ul><ul><li>Politically: </li></ul><ul><li>1) International bodies and law </li></ul><ul><li>e.g. United Nations, European Union </li></ul><ul><li>2) Global protest movements e.g. Greens </li></ul><ul><li>Culturally: </li></ul><ul><li>1) Cultural influences from all over world </li></ul><ul><li>2) Trans-national media – public opinion </li></ul>
    146. 153. <ul><li>Nation-state IS NOT losing power </li></ul><ul><li>Hirst & Thompson : </li></ul><ul><li>- TNCs do not have total control of national economies </li></ul><ul><li>- States still have primary control over taxes & welfare spending </li></ul><ul><li>- International bodies like UN made up of, and dependent on, nation-states </li></ul><ul><li>- States developing increasing control of borders and migration e.g. passports </li></ul>
    147. 154. Globalization of Social Relations <ul><li>Giddens: “the disembedding of social relations” </li></ul><ul><li>- social relations transformed from purely local or national to more “global” </li></ul><ul><li>- communications technologies; travel technologies </li></ul><ul><li>- dispersal of populations across globe: </li></ul><ul><li>migrations and diasporas </li></ul>
    148. 155. <ul><li>Ulrich Beck : </li></ul><ul><li>Trans-national social connections </li></ul><ul><li>- public life : trans-national business relationships </li></ul><ul><li>- private life : relatives & friends in different countries; inter-marriage between national groups, etc. </li></ul><ul><li>Multiple, non-national affiliations and identities </li></ul><ul><li>Cosmopolitanism : a person’s identity is decoupled from the nation-state </li></ul>
    149. 156. Undermining the idea of “Society” <ul><li>John Urry, Ulrich Beck, Roland Robertson </li></ul><ul><li>1) Cannot use the idea of “society” any more </li></ul><ul><li>2) Invented in later 19 th century: Durkheim </li></ul><ul><li>3) Society = bounded unit; a thing </li></ul><ul><li>Society = nation-state </li></ul><ul><li>e.g. “British society”, “German society”, etc </li></ul><ul><li>4) Reflects out-dated social conditions </li></ul><ul><li>5) Need new ideas to reflect global conditions </li></ul>
    150. 157. Undermining the idea of “Society” <ul><li>Drop idea of “society” </li></ul><ul><li>Use other ideas from classical sociology </li></ul><ul><li>Max Weber: Sociality (social relations) </li></ul><ul><li>Georg Simmel: Social networks </li></ul><ul><li>(Norbert Elias: social chains ) </li></ul><ul><li>“ Global networks” </li></ul><ul><li>– facilitated through electronic communications networks </li></ul>
    151. 158. Undermining the idea of “Society” <ul><li>Ulrich Beck: Cosmopolitan sociology </li></ul><ul><li>1) The main focus is not “society” but the “whole world” </li></ul><ul><li>2) Examine multiple, intersecting world-spanning processes </li></ul><ul><li>3) Avoid West-centric outlooks </li></ul><ul><li>John Urry: Sociology Beyond Societies </li></ul><ul><li>1) Global flows </li></ul><ul><li>2) Social processes like liquids </li></ul><ul><li>3) Liquids pouring rapidly across the world </li></ul><ul><li>Flows unpredictable and uncontrollable </li></ul><ul><li>4) Unconstrained cross-border mobility of people and things </li></ul>
    152. 159. <ul><li>Zygmunt Bauman: </li></ul><ul><li>Free & chosen mobility for wealthy </li></ul><ul><li>- transnational business-people </li></ul><ul><li>- global tourism </li></ul><ul><li>Forced mobility for poor: </li></ul><ul><li>- migrant workers, refugees </li></ul><ul><li>- ever more controls on mobility of poor </li></ul><ul><li>Information mobility : world divides into “ information rich ” and “ information poor ” </li></ul>
    153. 160. Globalization of Culture <ul><li>Emergence of a “global culture”? </li></ul><ul><li>What might this look like? </li></ul><ul><li>Positive: whole world shares same ideas and values? </li></ul><ul><li>World Cup, Olympic Games </li></ul><ul><li>Negative : local cultures destroyed? </li></ul><ul><li>Cultural homogenization? </li></ul><ul><li>Cultural heterogenization? </li></ul>
    154. 161. Cultural Imperialism <ul><li>Westernisation / Americanisation of the world </li></ul><ul><li>Domination of American consumer brands : </li></ul><ul><li>McDonalds, Nike, Coca-Cola, Gap </li></ul><ul><li>(“McWorld” - Benjamin Barber) </li></ul><ul><li>Global cultural homogenisation </li></ul><ul><li>Same consumer goods everywhere </li></ul><ul><li>Same ways of thinking everywhere </li></ul><ul><li>This is bad (left-wing critics e.g. Noam Chomsky) </li></ul><ul><li>This is good (right-wing critics e.g. Francis Fukuyama) </li></ul>
    155. 162. Cultural Imperialism <ul><li>Dominance of American mass media </li></ul><ul><li>Oligopoly of big media companies: </li></ul><ul><li>- Disney, Warner, Sony </li></ul><ul><li>Imbalance of cultural flows: </li></ul><ul><li>from ‘ core ’ to ‘ periphery ’, </li></ul><ul><li>not vice versa </li></ul>
    156. 163. Culture Clashes <ul><li>Benjamin Barber – Jihad vs. McWorld </li></ul><ul><li>- Local identities, nationalisms, religious traditions </li></ul><ul><li>- Develop in opposition to McWorld </li></ul><ul><li>- McWorld creates Jihad </li></ul><ul><li>Samuel Huntington – Clash of Civilizations </li></ul><ul><li>- European-Christian, Russian-Christian, Arabic-Muslim, Chinese, etc. </li></ul><ul><li>- All in conflict: symbolically & materially </li></ul>
    157. 164. Cultural heterogenization <ul><li>Roland Robertson </li></ul><ul><li>1) People in local cultures reinterpret global culture products in light of their own values & interests </li></ul><ul><li>2) Global culture is always limited by local cultures </li></ul><ul><li>3) Mixtures of global and local cultures: </li></ul><ul><li>- process of glocalization </li></ul><ul><li>- l ocal becomes global; global becomes local </li></ul><ul><li>4) Perceived threats to local identity : </li></ul><ul><li>- strong assertion of local identity </li></ul><ul><li>Globalization reinforces local cultures </li></ul><ul><li>Globalization produces new “local” cultures </li></ul>
    158. 165. Hybridization & Creolization <ul><li>Anthropologists: Ulf Hannerz </li></ul><ul><li>1) No culture is ever ‘pure’ </li></ul><ul><li>- Always a mixture of influences </li></ul><ul><li>2) Previously (relatively) separate cultures come into contact with each other </li></ul><ul><li>3) Globalization = Complex mixtures of cultures </li></ul><ul><li>- ‘creole cultures’, ‘hybrids’ </li></ul>
    159. 166. <ul><li>Globalization of religion: </li></ul><ul><li>- other options than the “local” religion </li></ul><ul><li>- religious syncretism : mixing and matching </li></ul><ul><li>New Age religions: bits of Christianity, Hinduism, Buddhism, Taoism, Celtic paganism & witchcraft, etc. </li></ul><ul><li>Globalization of food: </li></ul><ul><li>- “fusion cuisine” e.g. French-Japanese, Anglo-Indian </li></ul><ul><li>Globalization of music: </li></ul><ul><li>- “World music” </li></ul><ul><li>- Buddhist-techno, Spanish rap, Hungarian rock </li></ul><ul><li>Relativization of one’s own cultural traditions </li></ul>
    160. 167. Limits of Hybridization Ideas <ul><li>1) Local cultures commercialised : </li></ul><ul><li>Sold to Westerners by media and </li></ul><ul><li>big business; fashion trends </li></ul><ul><li>2) Enforced hybridization </li></ul><ul><li>- Western culture imposed on non-West </li></ul><ul><li>- Westerners choose non-Western cultures </li></ul><ul><li>3) Most people still primarily </li></ul><ul><li>enmeshed in local culture ? </li></ul><ul><li>Global culture has superficial effects? </li></ul>
    161. 168. Points to Consider <ul><li>Economic Globalization : spread of global capitalism. Effects ? </li></ul><ul><li>Political Globalization : decline of nation-state’s power. True ? </li></ul><ul><li>Social Globalization : stretching of social relations across world. Everyone, equally ? </li></ul><ul><li>Cultural Globalization : homogenization, culture clashes, heterogenization. Which? </li></ul><ul><li>Which is most important? </li></ul><ul><li>How does each of these effect the others? </li></ul>