Introduction
Globalization is simply defined as an integration process where business organizations start to carry out their organizations on an international scale. In the globalization process, the organizations begin to market and purchase internationally. Usually, the international trade receives the support of the government through various enabling policies such as incentives, reduced duties on imports and exports and opening up markets for both international and local firms. Over the past few decades, the globalization process has been promoted by corporations (vAn PAAsschEn, 2015). The result is the ability of businesses to create more job opportunities, improved quality of goods and services and improved technology leading to innovations and inventions.
Nearly 40 years ago, the international trade was scaling at slightly less than 30 percent of the world’s GDP. Currently, the global trade contributes approximately 60 percent of the global GDP. Internet technology which has greatly improved communications on the global basis is one of the greatest contributing factors to the increased globalization of trade. Globalization also has some disadvantages to the involved countries. The problems encountered due to globalization include environmental problems such as emission of unwanted gases, financial instability in various countries and cyber insecurity that has resulted from the increased reliance on technology for many business functions. This article will discuss various theories of globalization which include world-system theory, world-culture theory, and world society theory.
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World System Theory
The World Theory System of globalization involves division of labor among the international countries involved. The labor is divided into semi-periphery regions, periphery regions, and core regions. The core regions have their primary concern on the production practices which require a lot of capital and involve higher levels of skills. The rest of the globe are involved in the extraction of the raw materials and the production practices which require less capital, low levels of skills and are labor intensive (Baylis, Smith & Owens, 2017).
The World System Theory, also known as world-system analysis, was developed by Immanuel Wallerstein. The theory development began in the 1970s when Immanuel was trying to explain the accidental rise of capitalist world-economy. In the initial stages, the theory had its roots in sociology; however, it has developed into a multi-disciplinary field. The primary aim that Immanuel had in mind was to replace the modernization theory which he criticized greatly because of the following reasons: first, the modernization theory had its focus more on the nation-state as the only analysis unit. Secondly, the theory disregarded the transnational structures and so its development was more of local and national. Finally, the modernization theory had the assumption that there was just a single path towards the evolutionary development. Before its full development, there are some three theories that influence the stages of the world-systems theory. The Annales School, the Marxist tradition, and the dependence theory all contributed towards achieving the international interdependence in trade, thus, globalization (Baylis, Smith & Owens, 2017).
In the word system theory, countries from different parts of the globe are divided by their strength in the production line. It is certain that different countries have different abilities to produce goods and services depending on the availability of raw materials, financial ability, levels of skills among the labor, and the technological advancement. The theory, therefore, provides for an interdependence scheme that makes all the countries involved feel important and beneficial to the global trade.
Currently, the nature of the market demands that constant research is done in different industries to aid in inventions and innovations. Some countries which belong to the semi-periphery and periphery division are rich in natural resources but lack the financial capabilities to research on them and extract the resources. The core countries, therefore, come to assist in providing the required skilled labor and funds that help to extract and utilize the resources. The business organizations from the periphery and semi-periphery division will then import the finished products ready for consumption (Bondebjerg, 2014).
In today’s business world, competition is a key player in the trade. Various organizations, therefore, explore different strategies to remain relevant in the market. The strategies revolve around research abilities, marketing strategies, quality of goods and services, and the cost of production. These factors have led to the international exploration by the organizations from the core countries, as they look for raw materials, a pool of labor and market for their goods and services.
World Culture Theory
Concerning this theory, globalization can be defined as the process of compressing the world and intensifying the globe’s consciousness. The theory relies on the continued efforts to make the world a single place with one cultural aspect of the trade. In the late 1880s, there began an international integration process where the international communications, transport system, and international conflicts, started to take an internationally intensified approach across the borders of the international community. Four main pillars of globalization were identified during this period. The pillars include the individual-self, nation-state, world system and the humanity.
The world culture theory is thus, defined as the type of globalization which focusses on the global countries and individuals become conscious of the world as a single place with a common economic goal. The theory promotes a concrete global interdependence in various production units. The theory abolishes the autonomy of the individual actors and economic practices to a more unified system. This theory, is, therefore, based on the cultural belief of the fact that the different countries of the globe need to live as a single economic unit with a shared economic interest. The recent advancement in information and communication technologies is a remarkable improvement towards the achievement of the dream (Bondebjerg, 2014).
The idea of globalization brought about by the world culture began in the 1870s. During the period, the ideas about the nationalism, individual and the humanity started to form, leading to the coalescence of the world functions. The initial phase was then followed by a long phase of development which lasted up to the late 19th century. During this phase, the mere ideas took a more concrete developmental twist. For example, the states which were initially self-centered began to take part in the international relations (Gebert, Mattsson & Öberg, 2015).
With the culture of togetherness, trade receives a lot of boost from both the government policies and research abilities. The countries with the right resources but limited skilled-labor or funds can easily partner with another nation to be able to research on and extract the resources. Also, the international business organizations can freely set up production units, market and sell in different countries with much ease. The current business organizations tend to find more markets, labor, and raw materials from different countries to be able to produce high-quality goods and services at low production costs. The culture of oneness has enabled this process by the governments of various nations accepting to trade across the borders.
The world culture theory of globalization has far-reaching benefits due to its approach to the international trade. The feeling of togetherness and oneness under the umbrella of humanity has enabled all the involved countries to feel equally valued in trade, and so there is the willingness to merge all the resources towards the trade. Innovations and technological improvement have therefore, resulted from the global research conducted. Embracing the theory has created international jobs, thus, contributing to reduced global poverty levels (Baylis, Smith & Owens, 2017).
World Society Theory
The theory is also known as the World Polity Theory, first put forward by Medieval Christendom. This theory focuses on creating a transnational interaction where institutions are set up with the similar set of rules or models. This system creates value by conferring institutional authorities in a collective manner. There is no single actor in this system who defines the valuable policies for the globe. Instead, the various states have the responsibility of acting within the international policies as described by the culture of the world society. There are the universally applicable models which the member states use to come up with the collective goals, and the methods that are used to achieve the goals. Some considerable similarity among the differently situated states is created by the enactment of the global models (Rask, 2014).
The innovation of the world polity theory was much intense in the late 19th century. Many global organizations began the process of forming transnational rules that the individual states were bound to follow. The idea began after 1945 when the global oneness improved through the efforts of various international organizations. After the Second World War, the world saw the need of global models that various nations would use to foster development, progress, and justice. This practice was further intensified by the Cold War.
When one or two organizations come together, they do so with a purpose, and in an outlined structure. The world society theory outlines a coming together of the international organizations, through various policies and rules. The policies are created after thorough market research and intensive analysis. They are therefore, beneficial for most of the member states in matters relating to trade. The today’s organizations do benefit much from the international models because they provide updated methods, goals and objectives. The organizations are thus, able to save the funds that they would have used in research.
The theory of international model has benefited the various involved organizations in reducing costs that would have been used in research and outsourcing of information from various foreign markets. The policies that the international community comes with are based on updated information and can be applied in both the small and large-scale businesses (Baylis, Smith & Owens, 2017). Also, the theory gives the individual states the freedom of coming up with their own goals based on the model and the methods by which the goals are supposed to be achieved.
References
Baylis, J., Smith, S., & Owens, P. (Eds.). (2017). The globalization of world politics: an introduction to international relations . Oxford University Press.
Bondebjerg, I. (2014). Engaging with reality: Documentary and globalization . Intellect Ltd.
Gebert Persson, S., Mattsson, L. G., & Öberg, C. (2015). Has research on the internationalization of firms from an IMP perspective resulted in a theory of internationalization? IMP Journal , 9 (2), 208-226.
Rask, M. (2014). Internationalization through business model innovation: In search of relevant design dimensions and elements. Journal of International Entrepreneurship , 12 (2), 146-161.
vAn PAAsschEn, F. (2015). Globalization from a business leader's point of view. Brown J. World Aff. , 22 , 175.
