Globalization

John Adams

Globalization

Abstract

The assignment outlines the contextual differences between the terms “Globalization” and “International Business” by summarizing scientific explanations in the economical literature as well as associated social-cultural and politicly related approaches. It depicts the different contemporary perceptions of both terms and searches for new and unprecedented sets of environmental determinants within the explanations provided for the term Globalization in order to identify differences from International Business

As a conclusion, the assignment argues, that globalization is in fact nothing unprecedented in terms of economy and could be subsumed under the term international business.

Globalization and International Business

A) Semantic Overview International Business – Globalization

Both terms are not referred to as commonly agreed upon definitions in the literature and are therefore subject to different interpretations in various contexts. However, for further evaluation, the assignment approached both terms’ definition as follows: While “International Business” seems to be used predominantly in a wider and more descriptive sense for economic cross boarder trade, “Globalization” is a fairly new term, used to describe the process of a transforming international trade towards more liberalization and its impacts that can supposedly be associated with social-cultural and political changes on a global scale. It is most commonly used to discuss the relationship of trade increase in the past decades with issues like free markets, dissolving of purely national companies, global inequity developments, reduction of national political influence and reduction of cultural diversity in favour standardization and integration as regions become increasingly interconnected and inevitably dependent

on each other (e.g. Spero/ Hart 2003).

The key semantic difference of both terms as defined in this work shall be, that International Business describes a factual situation, where cross boarder trade does take place and deals with associated developments that influence its operations on the basis of a stable set of environmental determinants. Globalization on the contrary claims the existence of a new, transformational process of economic and social-cultural issues pushing towards a new state of global economy. Although no consensus is reached yet of how to identify or proof its existence or in what way the outcome of this transformational process is going to differ from previous economic systems, Globalization implies to be the reaction to a an unprecedented form of global trade, which is insufficiently described by international business.

B) Approach

Since that process is interpreted, described and sometimes negated differently in literature, the following approach was chosen to work out the existence of differences between international Business and Globalization: Rather than concentrating on the recognition of a supposedly new transformational process in international trade, the research focused firstly on the identification of new environmental determinants, that might have provoked significant changes in the way trade is been conducted. Because if the past decades had in fact not experienced any unprecedented set of environmental determinants, it is unlikely that a new and revolutionary process could exist which is not already sufficiently described by the traditional term International Business.

The different associations expressed in literature and society in regard to Globalization were therefore consequently evaluated upon their ability to proof the existence of a new set of environmental determinants that have not been known in international business before and that could therefore provide the basis for an unprecedented process.

Several mayor perceptions exist, of how Globalization should be described, here summarized in two: the narrower, pure economical view and the broader, social-cultural approach:

a) Globalization as an Economic Process towards Globality

Some view Globalization as the third economic system, with Bretton Woods and Interdependence being the other two in the past century (Spero/ Hart 2003).