1 the nature of globalization, business and it technology and globalization go hand-in-hand....

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1 The nature of The nature of Globalization, Globalization, Business and IT Business and IT Technology and globalization go hand-in-hand. Technology and globalization go hand-in-hand. Globalization unleashes technology, which in turn Globalization unleashes technology, which in turn drives firms to plan production and sales on a global drives firms to plan production and sales on a global basis. Technology changes the work we do and in basis. Technology changes the work we do and in nearly all cases, the jobs created by it demand more nearly all cases, the jobs created by it demand more education and training. It also changes the way education and training. It also changes the way business operates by transforming relationships business operates by transforming relationships between suppliers, producers, retailers and customers. between suppliers, producers, retailers and customers. (Ross, 1993, p. xii) (Ross, 1993, p. xii) Dr. Paolo R. Cerotti Dr. Paolo R. Cerotti ISYS 2394 Session 2 – Semester 2 ISYS 2394 Session 2 – Semester 2 2014 2014

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The nature of Globalization, The nature of Globalization, Business and ITBusiness and IT

Technology and globalization go hand-in-hand. Technology and globalization go hand-in-hand. Globalization unleashes technology, which in turn drives Globalization unleashes technology, which in turn drives

firms to plan production and sales on a global basis. firms to plan production and sales on a global basis. Technology changes the work we do and in nearly all cases, Technology changes the work we do and in nearly all cases, the jobs created by it demand more education and training. the jobs created by it demand more education and training. It also changes the way business operates by transforming It also changes the way business operates by transforming

relationshipsrelationships

between suppliers, producers, retailers and customers.between suppliers, producers, retailers and customers.

(Ross, 1993, p. xii)(Ross, 1993, p. xii)

Dr. Paolo R. CerottiDr. Paolo R. Cerotti ISYS 2394 Session 2 – Semester 2ISYS 2394 Session 2 – Semester 2

20142014

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Reasons Why You Might Like this Reasons Why You Might Like this classclass

1. 1. Multi-culture Multi-culture ((Technology/Strategy/Business/Organisations)((Technology/Strategy/Business/Organisations)

2. 2. Some readings more than a year old (sometimes Some readings more than a year old (sometimes really good ideas last more than a year)really good ideas last more than a year)

3.3. Course is continually evolvingCourse is continually evolving4.4. Considerable work load (But consistent with credits)Considerable work load (But consistent with credits)5.5. High expectationsHigh expectations6.6. Pictures of staff with famous peoplePictures of staff with famous people7.7. Collaborative learning environmentCollaborative learning environment8.8. No ExamNo Exam

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Paul’s Teaching Assignments:Paul’s Teaching Assignments:RMIT University - MelbourneRMIT University - MelbourneBentley University – BostonBentley University – BostonUniversity of Maryland – Washington DCUniversity of Maryland – Washington DCOld Dominion University – Norfolk, VirginiaOld Dominion University – Norfolk, VirginiaKAIST – KoreaKAIST – KoreaSeoul National University - KoreaSeoul National University - KoreaFudan University – ChinaFudan University – ChinaShanghai Institute of Foreign Trade - ChinaShanghai Institute of Foreign Trade - ChinaTrisakti University – IndonesiaTrisakti University – IndonesiaSIM – SingaporeSIM – SingaporeHK Polytechnic – Hong KongHK Polytechnic – Hong KongUniversita’ D’Urbino - ItalyUniversita’ D’Urbino - Italy

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Paul’s ResearchPaul’s Research

• GlobalizationGlobalization

• Globalization and ITGlobalization and IT

• International BusinessInternational Business

• Social Value CreationSocial Value Creation

• Social TechnologiesSocial Technologies

• Luxury BusinessLuxury Business

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Paul’s AwardsPaul’s Awards• 2013 – Pro-Vice Chancellor’s Award for Teaching Excellence in ISYS 2394 2013 – Pro-Vice Chancellor’s Award for Teaching Excellence in ISYS 2394

andBUSM 2112/andBUSM 2112/• 2013 – Dean Teaching and Learning Award – Peer Partnership2013 – Dean Teaching and Learning Award – Peer Partnership• 2012 – Dean Teaching and Learning Award – Peer Partnership Excellence2012 – Dean Teaching and Learning Award – Peer Partnership Excellence• 2012 – Pro- Vice Chancellor’s Award for Teaching Excellence2012 – Pro- Vice Chancellor’s Award for Teaching Excellence• 2011 – Pro- Vice Chancellor’s Award for Teaching Excellence 2011 – Pro- Vice Chancellor’s Award for Teaching Excellence • 2010 – Vice Chancellor’s Award for Teaching Excellence – Internationalisation – 2010 – Vice Chancellor’s Award for Teaching Excellence – Internationalisation – For For

Leveraging professional expertise and networks to integrate intercultural and international Leveraging professional expertise and networks to integrate intercultural and international contexts in curriculum and learning opportunities to produce globally competent graduates.contexts in curriculum and learning opportunities to produce globally competent graduates.

• 20072007 – – Australian Learning and Teaching National Citation Award - Australian Learning and Teaching National Citation Award - for Outstanding for Outstanding Contributions to Student Learning in area of internationalisation of the curriculum. Contributions to Student Learning in area of internationalisation of the curriculum.

• 2007 – RMIT University Teaching Award - 2007 – RMIT University Teaching Award - for outstanding contribution to Teaching in for outstanding contribution to Teaching in the category of Team Teaching.the category of Team Teaching.

• 2007 – RMIT University Vice Chancellor’s Award – 2007 Australian Learning and 2007 – RMIT University Vice Chancellor’s Award – 2007 Australian Learning and Teaching Award Winner – Teaching Award Winner – RMIT University Award Winner – ALT Award for RMIT University Award Winner – ALT Award for Australian University Teaching in the category of Outstanding Contribution to Student Australian University Teaching in the category of Outstanding Contribution to Student LearningLearning

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Paul’s ExperiencesPaul’s Experiences

• Grants – In excess of $275,00.00Grants – In excess of $275,00.00

• Hospitality\Fashion industry – Italy and AustraliaHospitality\Fashion industry – Italy and Australia

• Education industry – Asia, North America and EuropeEducation industry – Asia, North America and Europe

• Travelling since 6 years of age and still learning and still doing homework.Travelling since 6 years of age and still learning and still doing homework.

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Where are we now?Where are we now?

• Global activity Global activity strengthened during the second half of 2013, as anticipated strengthened during the second half of 2013, as anticipated in the October 2013 World Economic Outlook (WEO). Activity is expected to in the October 2013 World Economic Outlook (WEO). Activity is expected to improve further in 2014–15, largely on account of recovery in the advanced improve further in 2014–15, largely on account of recovery in the advanced economies. Global growth is now projected to be slightly higher in 2014, at economies. Global growth is now projected to be slightly higher in 2014, at around 3.7 percent, rising to 3.9 percent in 2015, a broadly unchanged around 3.7 percent, rising to 3.9 percent in 2015, a broadly unchanged outlook from the October 2013 WEO.outlook from the October 2013 WEO.

• United States United States is expected to be 2.8 percent in 2014, up from 1.9 percent in is expected to be 2.8 percent in 2014, up from 1.9 percent in 2013. Following upward surprises to inventories in the second half of 2013, 2013. Following upward surprises to inventories in the second half of 2013, the pickup in 2014 will be carried by final domestic demand.the pickup in 2014 will be carried by final domestic demand.

• The The euro area euro area is turning the corner from recession to recovery. Growth is is turning the corner from recession to recovery. Growth is projected to strengthen to 1 percent in 2014 and 1.4 percent in 2015, but the projected to strengthen to 1 percent in 2014 and 1.4 percent in 2015, but the recovery will be uneven.recovery will be uneven.

• United Kingdom United Kingdom has been buoyed by easier credit conditions and increased has been buoyed by easier credit conditions and increased confidence. Growth is expected to average 2¼ percent in 2014confidence. Growth is expected to average 2¼ percent in 2014––15, but 15, but economic slack will remain high.economic slack will remain high.

• In In Japan, Japan, growth is now expected to slow more gradually compared with growth is now expected to slow more gradually compared with October 2013 WEO projections.October 2013 WEO projections.

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Where are we now?Where are we now?

• Overall, growth in Overall, growth in emerging market and developing economies emerging market and developing economies is is expected to increase to 5.1 percent in 2014 and to 5.4 percent in 2015. expected to increase to 5.1 percent in 2014 and to 5.4 percent in 2015. Growth in Growth in China China rebounded strongly in the second half of 2013, due rebounded strongly in the second half of 2013, due largely to an acceleration in investment.largely to an acceleration in investment.

• Growth in Growth in India India picked up after a favorable monsoon season and higher picked up after a favorable monsoon season and higher export growth and is expected to firm further on stronger structural export growth and is expected to firm further on stronger structural policies supporting investment.policies supporting investment.

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What has changed in What has changed in business since we went business since we went Global?Global?• Let’s develop a listLet’s develop a list

• Are these changes universal?Are these changes universal?

• What/Who is driving these changes?What/Who is driving these changes?

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The Internet – the panacea The Internet – the panacea for all of the troubles in the for all of the troubles in the world?world?• Is the internet the great revolutionary tool of the 2ist century?Is the internet the great revolutionary tool of the 2ist century?• Or …is it just a reformation of business process using IT?Or …is it just a reformation of business process using IT?

• A diagram showing the degree to which different management functions must assume a global or local role.A diagram showing the degree to which different management functions must assume a global or local role.•   (Diagram by Prof. Eleanor Westney. Maps courtesy of (Diagram by Prof. Eleanor Westney. Maps courtesy of www.theodora.com/maps used with permission.)  used with permission.)

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Let’s talk about the Let’s talk about the triumviratetriumvirateBusiness/Globalization/I.T.Business/Globalization/I.T.

– HealthHealth– EducationEducation– TourismTourism– BankingBanking– GovernmentGovernment– LogisticsLogistics– FoodFood– ManufacturingManufacturing– EntertainmentEntertainment– ServicesServices

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TrendsTrends• What are the new business trends What are the new business trends

in 2014?in 2014?

• Does I.T. give value to business?Does I.T. give value to business?• Value chain model. (Diagram by Prof. Stuart Madnick.)Value chain model. (Diagram by Prof. Stuart Madnick.)

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Who is calling for changes?Who is calling for changes?Who is calling for trends?Who is calling for trends?• Global BusinessGlobal Business• World Economic ForumWorld Economic Forum • World Trade OrganizationWorld Trade Organization• World BankWorld Bank• United Nations United Nations • International Monetary International Monetary FundFund• UniversitiesUniversities• Global CustomersGlobal Customers• Are Are YOUYOU??????

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DefinitionsDefinitions

• Globalization (or globalization[1]), is an umbrella term for a Globalization (or globalization[1]), is an umbrella term for a complex series of economic, social, technological, cultural and complex series of economic, social, technological, cultural and political changes seen as increasing interdependence and political changes seen as increasing interdependence and interaction between people, communities, countries and interaction between people, communities, countries and companies in disparate locations all over the world.companies in disparate locations all over the world.

• ““There are 152,921 books in English in print on the subject of There are 152,921 books in English in print on the subject of globalization. Add to these hundreds in French, German, globalization. Add to these hundreds in French, German, Russian, Arabic, Hindi, Chinese, Spanish and other languages. Russian, Arabic, Hindi, Chinese, Spanish and other languages. (Amazon.com Search April 2013)(Amazon.com Search April 2013)

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DefinitionsDefinitions

• The term "globalization" is used to refer to these collective The term "globalization" is used to refer to these collective changes as a process, or else as the cause of (typically) changes as a process, or else as the cause of (typically) negative and turbulent change. The distinct uses include:negative and turbulent change. The distinct uses include:

• * Economically and socially positive: As an engine of * Economically and socially positive: As an engine of commerce; one which brings an increased standard of commerce; one which brings an increased standard of living — prosperity to developing countries and further living — prosperity to developing countries and further wealth to First World and Third World countries. This view wealth to First World and Third World countries. This view claims that economic prosperity brings about social claims that economic prosperity brings about social prosperity.prosperity.

• * Economically and socially negative: As an engine of * Economically and socially negative: As an engine of "corporate imperialism"; one which tramples over the "corporate imperialism"; one which tramples over the human rights of developing societies, claims to bring human rights of developing societies, claims to bring prosperity, yet often simply amounts to plundering and prosperity, yet often simply amounts to plundering and profiteering. Negative effects include cultural assimilation profiteering. Negative effects include cultural assimilation via cultural imperialism, the export of artificial wants, and via cultural imperialism, the export of artificial wants, and the destruction of local society and culture.the destruction of local society and culture.

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DefinitionsDefinitions• A typical definition can be taken from the IA typical definition can be taken from the International Monetary Fundnternational Monetary Fund, ,

which defines globalization as the growing economic interdependence of which defines globalization as the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology.more rapid and widespread diffusion of technology.

• Globalize means to make worldwide in scope or application, and Globalize means to make worldwide in scope or application, and the globalization of trade means freer and more intense the globalization of trade means freer and more intense worldwide trade across national borders. Technology helps to worldwide trade across national borders. Technology helps to make globalization possible. Because computers can be make globalization possible. Because computers can be interlinked across companies, countries and continents, interlinked across companies, countries and continents,

information is no longer weighed down by geography or time.information is no longer weighed down by geography or time.

• All definitions appear to agree that globalization has All definitions appear to agree that globalization has economic, political, cultural, and technological aspects that economic, political, cultural, and technological aspects that may be closely intertwined.may be closely intertwined.

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Economic GlobalizationEconomic Globalization

Economic globalization, (i.e. the aggregate change we observe in our Economic globalization, (i.e. the aggregate change we observe in our factories, storefronts, indeed generally across our economies and factories, storefronts, indeed generally across our economies and lifestyles) is caused by four fundamental forms of capital movement lifestyles) is caused by four fundamental forms of capital movement throughout the global economy. The four important capital flows are:throughout the global economy. The four important capital flows are:

– Human Capital (i.e. Immigration, Migration, Emigration, Human Capital (i.e. Immigration, Migration, Emigration, Deportation, etc.)Deportation, etc.)

– Financial Capital (i.e. Aid, Equity, Debt, Credit & Lending, etc.)Financial Capital (i.e. Aid, Equity, Debt, Credit & Lending, etc.)– Resource Capital (i.e. Energy, Metals, Minerals, Lumber, etc.)Resource Capital (i.e. Energy, Metals, Minerals, Lumber, etc.)– Power Capital (i.e. Security Forces, Alliances, Armed Forces, Power Capital (i.e. Security Forces, Alliances, Armed Forces,

etc.)etc.)

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Views about GlobalizationViews about Globalization

• Stiglitz argues that globalization has Stiglitz argues that globalization has opened up world trade and created more opened up world trade and created more economic development….is this the case?economic development….is this the case?

• Has globalization improved the Has globalization improved the competitiveness landscape?competitiveness landscape?

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GlobalizationGlobalization

• Nearly every world leader and leading academic and Nobel Nearly every world leader and leading academic and Nobel peace prize winner has defined globalization during the peace prize winner has defined globalization during the past 20 years, for former past 20 years, for former President ClintonPresident Clinton it was the it was the ‘world without walls’, for ‘world without walls’, for Joseph StiglitzJoseph Stiglitz it is ‘the removal it is ‘the removal of barriers to free trade and the closer integration of of barriers to free trade and the closer integration of national economies’, for national economies’, for Prime Minister BlairPrime Minister Blair ‘it is ‘it is inevitable and irresistable’, for analysts inevitable and irresistable’, for analysts Marshall McLuhanMarshall McLuhan it is a global village, for it is a global village, for President BushPresident Bush it is ‘ties and of it is ‘ties and of trade and trust’.trade and trust’.

• ““Globalization is neither new or a folly’Globalization is neither new or a folly’, said, said Amartya SenAmartya Sen, , but a globalbut a global movement of ideas, people, movement of ideas, people, technology and goods from one region to others, benefiting technology and goods from one region to others, benefiting the people at largethe people at large”(Sen, 2001, n.p.) ”(Sen, 2001, n.p.)

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Globalization in PracticeGlobalization in Practice

• ““In 2003, some 25,000 US tax returns In 2003, some 25,000 US tax returns were done in India. In 2004, the number were done in India. In 2004, the number was 100,000. In 2005, it was roughly was 100,000. In 2005, it was roughly 400,00. In a decade you will assume that 400,00. In a decade you will assume that your accountant has outsourced the basic your accountant has outsourced the basic preparation of your tax returns-if not more”preparation of your tax returns-if not more”

Thomas L. Friedman, 2005, page 13Thomas L. Friedman, 2005, page 13

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Globalization inGlobalization in Practice Practice

• Dalian in China has become to the Japanese what Dalian in China has become to the Japanese what Bangalore is to America.Bangalore is to America.

• The Japanese are outsourcing their call centers to the The Japanese are outsourcing their call centers to the Chinese.Chinese.

• The Chinese are in Dalian are taking Japanese as a The Chinese are in Dalian are taking Japanese as a second language.second language.

• The Chinese are so focused on leading the world in the The Chinese are so focused on leading the world in the next century that they are ready to brush up on their next century that they are ready to brush up on their Japanese and take all the work Japan can outsource.Japanese and take all the work Japan can outsource.(Thomas L. Friedman 2005)(Thomas L. Friedman 2005)

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Mayor Xia’s ideas on Mayor Xia’s ideas on GlobalizationGlobalization

• Chinese youngsters are more ambitious than Japanese or Chinese youngsters are more ambitious than Japanese or American youngsters in recent years.American youngsters in recent years.

(Thomas L. Friedman, 2005)(Thomas L. Friedman, 2005)

• Eat your dinner because there are millions of Chinese Eat your dinner because there are millions of Chinese students starving to death.students starving to death.

• Eat your rice there are millions ofEat your rice there are millions of

Capitalist children starving to death. Capitalist children starving to death.

• EducationEducation

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Mayor Xia’s ideas on Mayor Xia’s ideas on GlobalizationGlobalization

• ““It is like building a building. Today the USA It is like building a building. Today the USA is the designer, the architect and the is the designer, the architect and the developing countries are the bricklayers for developing countries are the bricklayers for the buildings.the buildings.

• But one day I hope we will be the architects.” But one day I hope we will be the architects.” (Thomas L. Friedman, 2005) (Thomas L. Friedman, 2005) Will this happen ?Will this happen ?

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Friedman’s conversation Friedman’s conversation with Jaithirth Rao in Indiawith Jaithirth Rao in India

• ““We can predict our future. But we are We can predict our future. But we are behind you. You are defining the future. behind you. You are defining the future. America is always on the edge of the next America is always on the edge of the next creative wave…..” creative wave…..”

• (Thomas L. Friedman, 2005, page 15)(Thomas L. Friedman, 2005, page 15)

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Globalization of Innovation – A Globalization of Innovation – A Change Change • Satyam Cherukuri at Sarnoff speaks of the end of the old Satyam Cherukuri at Sarnoff speaks of the end of the old

model of a single American or European multinational model of a single American or European multinational handling all the elements of the product development handling all the elements of the product development cycle from its own resources. cycle from its own resources.

• More and more American and European companies are More and more American and European companies are outsourcing significant research and development tasks outsourcing significant research and development tasks to India, Russia, China, South America and Eastern to India, Russia, China, South America and Eastern Europe and at times to Cambodia, Vietnam and Laos. Europe and at times to Cambodia, Vietnam and Laos. This is what we mean when we speak of the This is what we mean when we speak of the “globalization of innovation”. (Thomas L. Friedman, “globalization of innovation”. (Thomas L. Friedman, 2005)2005)

Guarded Globalization Guarded Globalization (Bremmer (Bremmer 2012)2012)

• Pre 2008 – Coca Cola - - 200 countries, Pre 2008 – Coca Cola - - 200 countries, Lockheed Martin – 805 revenue from US Lockheed Martin – 805 revenue from US government and 95% workforce in the government and 95% workforce in the USUS

• Post 2008 – Slow moving, selective, Post 2008 – Slow moving, selective, nationalism and regionalism mix.nationalism and regionalism mix.

• Strategic importance of industries at Strategic importance of industries at home and in countries they wish to enterhome and in countries they wish to enter

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State CapitalismState Capitalism

• Russia, India and BrazilRussia, India and Brazil

• Control the wealth that markets generate – Control the wealth that markets generate – governmetns play a dominant public sector governmetns play a dominant public sector companies and politically loyaly corporations.companies and politically loyaly corporations.

• EG. 73 Chinese companies listed in 2012 EG. 73 Chinese companies listed in 2012 Fortune Global 500, 65 are state owned.Fortune Global 500, 65 are state owned.

• Russia – 50% are state ownedRussia – 50% are state owned

• UAE – oil companies and wealth fund dominate UAE – oil companies and wealth fund dominate

State CapitalismState Capitalism

• Google, Facebook and Yahoo which Google, Facebook and Yahoo which may, and has been used by the US may, and has been used by the US government to read emails around government to read emails around the world can be seen as a form of the world can be seen as a form of State Capitalims.State Capitalims.

• Gathering Data – Is this valuable?Gathering Data – Is this valuable?

• Greater scrutiny for US IT companiesGreater scrutiny for US IT companies

• Will this inhibit Globalization?Will this inhibit Globalization?

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Ten Forces that Flattened the Ten Forces that Flattened the WorldWorld• Berlin Wall 11/9/89Berlin Wall 11/9/89• Amatya Sen (Indian Nobel Prize Amatya Sen (Indian Nobel Prize

Economist), said “ The Berlin Wall was not Economist), said “ The Berlin Wall was not only a symbol of keeping people inside only a symbol of keeping people inside East Germany, it was a way of preventing East Germany, it was a way of preventing a kind of global view of our time…a kind of global view of our time…

• If I celebrate the fall of the wall it is If I celebrate the fall of the wall it is because I am convinced of how much we because I am convinced of how much we can learn from each other. can learn from each other. Most Most knowledge is learning from others knowledge is learning from others across the border.” Discussacross the border.” Discuss

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Ten Forces that Flattened the Ten Forces that Flattened the WorldWorld

• The New Age of ConnectivityThe New Age of Connectivity: when the : when the web went around and Netscape went web went around and Netscape went public – 8/9/95.public – 8/9/95.

• Work Flow Software-Work Flow Software- Read and Discuss Read and Discuss pages 91-92pages 91-92

• Harnessing the Power of CommunitiesHarnessing the Power of Communities

• Outsourcing Y2KOutsourcing Y2K – Read and discuss – Read and discuss pages 131-132.pages 131-132.

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Off-shoringOff-shoring

““Every morning in Africa, a gazelle wakes upEvery morning in Africa, a gazelle wakes up• It knows it must run faster than the fastest lion it will be killedIt knows it must run faster than the fastest lion it will be killed• Every morning a lion wakes upEvery morning a lion wakes up• It knows it must outrun the slowest gazelle or it will starve to death.It knows it must outrun the slowest gazelle or it will starve to death.• It doesn’t matter whether you are a lion or a gazelle.It doesn’t matter whether you are a lion or a gazelle.• When the sun comes up, you better start running”When the sun comes up, you better start running”

• Why are we all running?Why are we all running?..• China has become an unparalleled country for off-shoring, it has 160 cities with a China has become an unparalleled country for off-shoring, it has 160 cities with a

population of one million or more.population of one million or more.

• Can India beat China in off-shoring or will it be the Middle East or South America Can India beat China in off-shoring or will it be the Middle East or South America that will win this race or a trading block of Chinese culture nations? that will win this race or a trading block of Chinese culture nations?

• CHINDIA ?????????CHINDIA ?????????

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Ten Forces that Flattened the Ten Forces that Flattened the WorldWorld

• Supply-ChainingSupply-Chaining – eg HP will sell 400,00 – eg HP will sell 400,00 computers in one day during the Christmas computers in one day during the Christmas season, throughout 4000 Wal-Mart stores.season, throughout 4000 Wal-Mart stores.

• InsourcingInsourcing – Read and discuss pages 167-8. – Read and discuss pages 167-8.

• Informing Informing – Google, Yahoo, MSN Web – Google, Yahoo, MSN Web SearchSearch

• The SteroidsThe Steroids – Digital, Mobile, Personal and – Digital, Mobile, Personal and VirtualVirtual

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Views about Views about Globalization/Innovation Globalization/Innovation ThinkingThinking• Garelli has mapped the world competitiveness landscape.Garelli has mapped the world competitiveness landscape.  • 1.      Competitiveness is not the accumulation of certainties1.      Competitiveness is not the accumulation of certainties• 2.      Competitiveness is developed through ‘trial and error’2.      Competitiveness is developed through ‘trial and error’• 3.      Strong competitiveness models accept internal criticism3.      Strong competitiveness models accept internal criticism• 4.      Competitiveness also thrives on thinking the unthinkable4.      Competitiveness also thrives on thinking the unthinkable• 5.      The future is not what it used to be5.      The future is not what it used to be

• Who wins?Who wins?• Who loses?Who loses?• Why?Why?

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Views about globalizationViews about globalization

• Legrain argues that globalization is blurring the Legrain argues that globalization is blurring the borders between nation states….is all the world borders between nation states….is all the world one?one?

• Do you feel at home anywhere in the world?Do you feel at home anywhere in the world?

• Is it globalization or Americanization or Is it globalization or Americanization or Californiazation?Californiazation?

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Views about globalizationViews about globalization

• Giddens argues that globalization creates Giddens argues that globalization creates new economic and cultural zones e.g. new economic and cultural zones e.g. around HK, Nth Italy. Silicon Valley, around HK, Nth Italy. Silicon Valley, Middle East and South America.Middle East and South America.

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Views about globalizationViews about globalization

• Singer argues that since globalization the Singer argues that since globalization the gap between the rich and the poor gap between the rich and the poor countries has increased….why?countries has increased….why?

• However, on another measure life However, on another measure life expectancy has increased in developing expectancy has increased in developing countries from 55 to 66 yrs!countries from 55 to 66 yrs!

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An emerging problem!An emerging problem!

• The new business conflict: IT consolidation vs. The new business conflict: IT consolidation vs. globalization by Alan Saldich (2006) globalization by Alan Saldich (2006) www.snwonline.com/behind/conflict_03-27-06.asp?article_id=675

• The world is getting smaller, companies have The world is getting smaller, companies have operations all over the place, and IT is getting operations all over the place, and IT is getting more powerful by the month. You would think more powerful by the month. You would think that connecting a global enterprise seamlessly that connecting a global enterprise seamlessly would be easier than ever, but in fact it's getting would be easier than ever, but in fact it's getting more difficult in some ways. Why?more difficult in some ways. Why?

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USA and President ObamaUSA and President Obama

• No. 1 Economic SuperpowerNo. 1 Economic Superpower

• Image, politics, wars, attitude, financeImage, politics, wars, attitude, finance

• Stimulus packageStimulus package

• Austerity measuresAusterity measures

• Rescue of major industriesRescue of major industries

• Automobile, Banks, Sub-prime issueAutomobile, Banks, Sub-prime issue

• Some degree of recoverySome degree of recovery

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USA – Home of USA – Home of Globalization ?Globalization ?

• Home of H and HHome of H and H

• The American CenturyThe American Century

• The Barbie Case studyThe Barbie Case study

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Globalization Where is it?Globalization Where is it?

• Globalization is happening Globalization is happening everywhere and it is not only in the everywhere and it is not only in the world of IT!!!world of IT!!!

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Globalization of GamblingGlobalization of Gambling

• USAUSA• Las VegasLas Vegas• Atlantic CityAtlantic City• RenoReno• MacauMacau• AustraliaAustralia

Virtual gamblingVirtual gambling

• Why is gambling a global phenomenon?Why is gambling a global phenomenon?• Does IT support this global business?Does IT support this global business?

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The Globalization of SushiThe Globalization of Sushi

• http://www.cbsnews.com/video/watch/?id=4423723n

• Where do we find Sushi?Where do we find Sushi?• Why is it a global phenomenonWhy is it a global phenomenon• Global Supply ChainGlobal Supply Chain• Role of IT for SushiRole of IT for Sushi• The Sushi Economy: Globalization and the The Sushi Economy: Globalization and the

Making of a Modern Delicacy Making of a Modern Delicacy • by by Sasha Issenberg

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Globalization of IconsGlobalization of Icons

•http://www.youtube.com/watch?v=HsdYPKGYxrI

• Why is this Icon a global Why is this Icon a global phenomenon?phenomenon?

• Why are business icons more Why are business icons more recognisable that ever before?recognisable that ever before?

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Globalization of SportGlobalization of Sport

• ‘‘The United States of America is truly the only melting pot in the The United States of America is truly the only melting pot in the world. It is the only country the blends so many different ethnic and world. It is the only country the blends so many different ethnic and culturally diverse individuals from all parts of the world, from all culturally diverse individuals from all parts of the world, from all walks of life. One of the things I cherish most about sports is that no walks of life. One of the things I cherish most about sports is that no matter who you are, what you look like, what you believe in, all of matter who you are, what you look like, what you believe in, all of that is put to the side if we are cheering for the same team…the that is put to the side if we are cheering for the same team…the only colors that matter are the home team. You will see the rich only colors that matter are the home team. You will see the rich next to the poor, black, white, and Asians all cheering together. This next to the poor, black, white, and Asians all cheering together. This is what makes sports truly remarkable’is what makes sports truly remarkable’. .

• American Football and the SuperbowlAmerican Football and the Superbowl• Soccer BasketballSoccer Basketball• Cricket RugbyCricket Rugby• Tennis KarateTennis Karate• GolfGolf• SwimmingSwimming• The Summer and Winter OlympicsThe Summer and Winter Olympics

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Globalization of Lingua Globalization of Lingua FrancaFranca

• English is the language of business, English is the language of business, computing and aviationcomputing and aviation

• MandarinMandarin

• SpanishSpanish

• ArabicArabic

• EnglishEnglish

• HindiHindi

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Globalization of EducationGlobalization of Education

• Thousands of students travel each year Thousands of students travel each year around the globe for educationaround the globe for education

• Boston – the new AthensBoston – the new Athens

• Magic names: Harvard, Yale, UCLA, Magic names: Harvard, Yale, UCLA, Georgetown, Oxford, Cambridge, Trinity Georgetown, Oxford, Cambridge, Trinity College, St. Andrews, Chulalangkorn, Beijing College, St. Andrews, Chulalangkorn, Beijing and Beijing Uni, Fudan University, KAIST, La and Beijing Uni, Fudan University, KAIST, La Bocconi, Sorbonne etc.Bocconi, Sorbonne etc.

5151

Globalization of MoviesGlobalization of Movies

• HollywoodHollywood

• Bollywood – ‘Slumdog Millionaire’Bollywood – ‘Slumdog Millionaire’

• Asian Film IndustryAsian Film Industry

• Spanish Film IndustrySpanish Film Industry

• Globalization of Music Globalization of Music

5252

Globalization of FashionGlobalization of Fashion

• T-Shirts, Jeans, Baseball caps, Polo T-Shirts, Jeans, Baseball caps, Polo shirtsshirts

• American streetwearAmerican streetwear

• Italian FashionItalian Fashion

• French FashionFrench Fashion

• Japanese FashionJapanese Fashion

• Must have bags and accessoriesMust have bags and accessories

5353

Globalization of FoodGlobalization of Food

• McDonaldsMcDonalds

• KFCKFC

• PizzaPizza

• Chinese FoodChinese Food

• Italian FoodItalian Food

5454

Globalization and IT of Globalization and IT of Romance and Dating Romance and Dating • Dating and ITDating and IT

• MySpace is the new booty call”MySpace is the new booty call”

• ““I had this guy leave me a voice mail at work, so I called him at I had this guy leave me a voice mail at work, so I called him at home, and then he emailed me to my BlackBerry, and so I texted home, and then he emailed me to my BlackBerry, and so I texted to his cell, and now you just have to go around checking all these to his cell, and now you just have to go around checking all these different portals just to get rejected by seven different different portals just to get rejected by seven different technologies. It’s exhausting.” He’s just not that into you”technologies. It’s exhausting.” He’s just not that into you”

• Digital DumpingDigital Dumping

• Chat rouletteChat roulette

• Social Technologies – Facebook, Twitter, BlogsSocial Technologies – Facebook, Twitter, Blogs

5555

Globalization and Business Globalization and Business ITIT

• Where is it happening?Where is it happening?

• Is it only in the USA?Is it only in the USA?

5656

ChinaChina

• China 2China 2ndnd highest foreign exchange highest foreign exchange reserves $432billionreserves $432billion

• Domestic savings of $2.5trillionDomestic savings of $2.5trillion• Setting the pace in the global Setting the pace in the global

economy, expected economy, expected • No. 2 Economic Power in the WorldNo. 2 Economic Power in the World• China ranked number 2 in world China ranked number 2 in world

purchasing power.purchasing power.

ChinaChina

• Establishes international business Establishes international business norms and rules – A mix of Socialism norms and rules – A mix of Socialism with Chinese characteristics – a new with Chinese characteristics – a new mode of Globalization.mode of Globalization.

5757

5858

Micro-regions go global – ItalyMicro-regions go global – Italy

• ItalyItaly – Region of Emiglia Romagna – known as – Region of Emiglia Romagna – known as the food bowl of Italy.the food bowl of Italy.

• Exports pasta, cheese, wine, confectionery etc.Exports pasta, cheese, wine, confectionery etc.• ModenaModena – Lamborghini, Maserati, Balsamic – Lamborghini, Maserati, Balsamic

VinegarVinegar

• MaranelloMaranello – Ferrari – sales in China – Ferrari – sales in China• ParmaParma – Parmesan Cheese – Parmesan Cheese• CarpiCarpi – Knitwear for Armani, Versace, Gucci etc – Knitwear for Armani, Versace, Gucci etc

5959

ItalyItaly

• BolognaBologna – Packaging Industries, Shoes – – Packaging Industries, Shoes – home of Bruno Magli, Rosetti,Industrial home of Bruno Magli, Rosetti,Industrial Machinery etc.Machinery etc.

• VicenzaVicenza – Jewellery – Bvlgari, Pomellato etc – Jewellery – Bvlgari, Pomellato etc• SassuoloSassuolo – Ceramic Tiles – Ceramic Tiles• ParmaParma – Ham etc. Machinery – Ham etc. Machinery• ForliForli – Confectionery – Flamigni – Confectionery – Flamigni• FaenzaFaenza – Handpainted porcelain – Handpainted porcelain• Ravenna Ravenna – Mosaic tiles– Mosaic tiles

6060

ItalyItaly

• Towns work with the rest of the world.Towns work with the rest of the world.

• Extremely competitiveExtremely competitive

• Italy’s taxation laws favours small Italy’s taxation laws favours small companies especially mom and pop shows companies especially mom and pop shows – less than 15 employees– less than 15 employees

• High level of specializationHigh level of specialization

• Clusters of co. making one article eg. Clusters of co. making one article eg. buckles, buttons, shoe laces, embroidery buckles, buttons, shoe laces, embroidery etc.etc.

6161

ItalyItaly

• Niche productionNiche production• Italian achieve global dominance in supply Italian achieve global dominance in supply

of high end, price inelastic products.of high end, price inelastic products.• Thrives in a global economyThrives in a global economy• Survives the challenge from China of low Survives the challenge from China of low

production cost.production cost.• Global appetite for luxury goods – high Global appetite for luxury goods – high

standard of manufacture, craftsmanship, standard of manufacture, craftsmanship, high prices = desirable producthigh prices = desirable product

6262

ItalyItaly

• Luxury goods sell on brand, high Luxury goods sell on brand, high recognition, conspicuous consumption and recognition, conspicuous consumption and brand loyalty.brand loyalty.

• French and English luxury brands use Italy French and English luxury brands use Italy for production of apparel, bags and shoes for production of apparel, bags and shoes – Chanel/Dior/Hermes/Burberry etc. uses – Chanel/Dior/Hermes/Burberry etc. uses Italy for scarves, shoes etc.Italy for scarves, shoes etc.

• Italians too small to globalizeItalians too small to globalize• Defeated the globalization tidal wave and Defeated the globalization tidal wave and

the China phenomena by Specializing. the China phenomena by Specializing. • Can all industries do this?Can all industries do this?

6363

Surviving globalizationSurviving globalization

• Italian towns survive in the global Italian towns survive in the global economy by specialising and maintaining economy by specialising and maintaining the ability to price high. the ability to price high.

• High quality.High quality.• Nurturing the ‘Made in Italy’.Nurturing the ‘Made in Italy’.• Romance, History and Culture of ItalyRomance, History and Culture of Italy• Case study – Salvatore FerragamoCase study – Salvatore Ferragamo• Producing items for which there is an Producing items for which there is an

inelastic demand and thus escaping the inelastic demand and thus escaping the Chinas of this world.Chinas of this world.

6464

Finland, Norway and Finland, Norway and DenmarkDenmark• Trailblazer in telecommunicationsTrailblazer in telecommunications• Nokia TeliaSoneraNokia TeliaSonera• R&D in software engineering, data security and R&D in software engineering, data security and

the Linux computer operating systemthe Linux computer operating system• World Economic Forum declared Finland the most World Economic Forum declared Finland the most

competitive country in the world in 2002 and competitive country in the world in 2002 and 20032003

• First in networked connectivity and compatibilityFirst in networked connectivity and compatibility• Most responsive to IT and e-business Most responsive to IT and e-business

opportunities.opportunities.

6565

Multinationals in CambodiaMultinationals in Cambodia

• Cambodia is at the start of GlobalizationCambodia is at the start of Globalization• Multinationals in Phnom PenhMultinationals in Phnom Penh• Multimillion dollar contracts with Adidas, Multimillion dollar contracts with Adidas,

Columbia, Nautica, Nike and SpeedoColumbia, Nautica, Nike and Speedo• One factory worth $4million USDOne factory worth $4million USD• 90% female– 10% male90% female– 10% male• Salary for machinists $75.00USD a monthSalary for machinists $75.00USD a month

6666

Cambodia and ITCambodia and IT

• Staff of 4000Staff of 4000• Investment by Chinese IndustrialistsInvestment by Chinese Industrialists• Owner Chinese/USOwner Chinese/US• Fabrics from Taiwan, Thailand, USA Fabrics from Taiwan, Thailand, USA

and Europeand Europe• High level of IS infrastructureHigh level of IS infrastructure• Design studio in the USA sends Design studio in the USA sends

designs to Cambodiadesigns to Cambodia

6767

Cambodia and global businessCambodia and global business

• UN Ethics Creed in every section in English UN Ethics Creed in every section in English and Cambodianand Cambodian

• ISO 9001ISO 9001• Safety regulationsSafety regulations• Motivational cards around the factory “ Motivational cards around the factory “

Keep our factory clean we can make it”Keep our factory clean we can make it”• All staff over 18 years of ageAll staff over 18 years of age• Managers says “ I have to be a good Managers says “ I have to be a good

manager so my staff can be good workers manager so my staff can be good workers and we will all benefit”.and we will all benefit”.

6868

India and GlobalizationIndia and Globalization

• India – 500 million people under the age India – 500 million people under the age of 25 – What does this mean for India?of 25 – What does this mean for India?

• India and mobile phones – India and mobile phones – • 2002 – 6.5 million2002 – 6.5 million• 2009 – 506 million2009 – 506 million• 2015 Estimates – 1.04billion2015 Estimates – 1.04billion

– SourceSource (Kunai Bajaj, Managing Director of BDA Consultancy)(Kunai Bajaj, Managing Director of BDA Consultancy)

6969

Russia, Globalization and a Russia, Globalization and a Free EconomyFree Economy

• Russia – a new frontier for global Russia – a new frontier for global businessbusiness

• Wealthy Russians – taste of luxury goodsWealthy Russians – taste of luxury goods• Immigration to LondongradImmigration to Londongrad

• Capitalism at work – Capitalism at work – GFC in 2008-09, but the GFC in 2008-09, but the IMF is more optimistic about it and expects a 1.5-IMF is more optimistic about it and expects a 1.5-percent growth of the GDP. percent growth of the GDP.

7070

Globalization and South Globalization and South AmericaAmerica

• Petrobas - 38% of the value of BM&BOVESPAPetrobas - 38% of the value of BM&BOVESPA• Brazil 10Brazil 10thth biggest economy - aircraft, biggest economy - aircraft, • electronics, cars, ethanol, textiles, footwear, iron electronics, cars, ethanol, textiles, footwear, iron

ore, steel, coffee, orange juice, soybean and beef ore, steel, coffee, orange juice, soybean and beef

• Industries in South AmericaIndustries in South America• Car ManufacturingCar Manufacturing• TourismTourism• CoffeeCoffee• DrugsDrugs

7171

The Arab Economies in a The Arab Economies in a Changing WorldChanging World• http://www.apple.com/trailers/wb/syriana

• Dubai meltdownDubai meltdown• Trouble in the Middle EastTrouble in the Middle East• What next for U.A.E.?What next for U.A.E.?• Lebanon ???Lebanon ???• OilOil• TourismTourism• Economic downturn in late 2008-2011Economic downturn in late 2008-2011

7272

Japan and GlobalizationJapan and Globalization

• Golden age of Japanese globalization Golden age of Japanese globalization 1980’s – mid 1990’s1980’s – mid 1990’s

• Japanese ManufacturingJapanese Manufacturing• Japanese Auto makersJapanese Auto makers• Japanese technologyJapanese technology• Giants in global business: Toyota, Sony,Giants in global business: Toyota, Sony,• Recent problems at Toyota – Class action Recent problems at Toyota – Class action

suits in the USAsuits in the USA• Natural Disaster in Japan 2011 Natural Disaster in Japan 2011 • Aging population Aging population

7373

Globalization and the United Globalization and the United States of EuropeStates of Europe

• Fortress Europe - EUFortress Europe - EU

• Countries affected by the GFCCountries affected by the GFC

• GreeceGreece BritainBritain

• PortugalPortugal IrelandIreland

• SpainSpain IcelandIceland

• ItalyItaly

• FranceFrance

The Dark Side of The Dark Side of GlobalizationGlobalization• Human TraffickingHuman Trafficking

• Counterfeit GoodsCounterfeit Goods

• DrugsDrugs

• ArmsArms

• SlaverySlavery

• Unethical Working ConditionsUnethical Working Conditions

• CorruptionCorruption

• Conflicts around the world – Ukraine and GazaConflicts around the world – Ukraine and Gaza

• Malaysian Airlines disasterMalaysian Airlines disaster

7474

7676

The Bottom BillionThe Bottom BillionPaul Collier 2007Paul Collier 2007

• Why the poorest countries are failing?Why the poorest countries are failing?

• Millenium development goalsMillenium development goals

• Africa, Central Asia and parts of South Africa, Central Asia and parts of South AmericaAmerica

7777

Making Globalization work for Making Globalization work for the least developed countriesthe least developed countries

• 2.5 billion people live on less than 2.5 billion people live on less than $2.00USD a day $2.00USD a day

• http://www.nationsonline.org/oneworld/http://www.nationsonline.org/oneworld/least_developed_countries.htmleast_developed_countries.htm

• ‘‘Globalization and exclusion trap’Globalization and exclusion trap’• LDCs are not homogenous – influence LDCs are not homogenous – influence

insignificantinsignificant• How do we make ‘G’ work for LDCs?How do we make ‘G’ work for LDCs?

7878

The next phase The next phase

• The next phase of globalization is not The next phase of globalization is not going to be more Americanization, going to be more Americanization, but more “glocalization”, more and but more “glocalization”, more and more local content (web and free more local content (web and free technology) made global.technology) made global.

•Thomas L. Friedman, Chinese Finding their Thomas L. Friedman, Chinese Finding their Voice, International Herald Tribune, Oct. Voice, International Herald Tribune, Oct. 22/23, 2005.22/23, 2005.

7979

The Road to Prosperity for The Road to Prosperity for all?all?

• Capitalism Magazine says, "Anti-Capitalism Magazine says, "Anti-globalization protesters can rail all globalization protesters can rail all they like against the evils of they like against the evils of capitalism... Wealth is the only capitalism... Wealth is the only remedy for poverty, and capitalism is remedy for poverty, and capitalism is the only real way to create wealth." the only real way to create wealth."