Globalization's Impact on Workers and Nations

ISSN 1679-1827
Volume 1, Número 1, Janeiro/Junho 2003
THEORIZING “GLOBALIZATION” SOCIOLOGICALLY FOR MANAGEMENT
i
Stewart Clegg
University of Technology, Sydney - Austrália
Sumário: 1. Introduction; 2. World System of Global Economic Actors; 3. National societies organized as a
global system of states; 4. Global production of concepts of selves; 5. Humankind; 6. Conclusion: Winners and
Losers in Globalization.
PROGRAMA DE PÓS-GRADUAÇÃO EM ADMINISTRAÇÃO

Stewart Clegg
Globalization: ‘tendencies to a worldwide reach, impact, or connectedness of social

phenomena or to a world-encompassing awareness among social actors’
Therborn (2000b, 154)
‘Globalization’ is the most immediate legacy to the new century of the social sciences of the
outgoing 20th century. Basically it is a concern of the second half of the 1990s . . . In the major
dictionaries of English, French, Spanish and German of the 1980s the word is not listed. In Arabic
at least four different words render the notion. Whereas in Japanese business the word goes back
to the 1980s, it entered academic Chinese only in the mid-1990s. The Social Science Citation Index
records only a few occurrences of ‘globalization’ in the 1980s but shows its soaring popularity from
1992 onwards, which accelerated in the last years of the past century.
In comparison with the preoccupations of the social sciences 1000 years earlier, the current
overriding interest in globalization means two things. First of all, a substitution of the global for the
universal; second, a substitution of space for time.
Therborn, (2000a, 149)
Although I have made a fortune in the financial markets, I now fear that untrammelled
intensification of laissez-faire capitalism and the spread of market values to all areas of life is
endangering our open and democratic society. The main enemy of the open society, I believe, is no
longer the communist but the capitalist threat.... Too much competition and too little cooperation
can cause intolerable inequities and instability.... The doctrine of laissez-faire capitalism holds that
the common good is best served by the uninhibited pursuit of self-interest. Unless it is tempered by
the recognition of a common interest that ought to take precedence over particular interests, our
present system... if liable to break down.
Soros, (1997: 45, 48)
6 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Theorizing “Globalization” Sociologically for Management
RESUMO
Desde os primórdios da civilização o 1. INTRODUCTION
mercado entre diferentes fronteiras e
regiões vem ocorrendo. Mas é apenas no Since the time of the earliest
final do século XIX e início do século XX civilisations trade across frontiers and
que atividades transacionais significativas regions has occurred. The
tiveram início. A primeira conseqüência da internationalization of economy and
globalização parece ser trabalhadores com society, which commenced with the dawn
baixa qualificação em países of civilization and the commencement of
industrializados que vêem seus trabalhos trade, meant exchange of raw materials,
serem transferidos para o exterior, ou semi-finished and finished goods, services,
vivenciam um doloroso corte em seus money, ideas, and people. From the 16th
salários, ao mesmo tempo em que seus century onwards this pattern of exchange,
empregadores lutam para reduzir custos. A split between the European core state
Segunda, países inteiros percebem que systems and their offshoots, involving the
devem unir forças em mercados comuns world’s major trading companies (and
regionais e, ao invés de experimentarem organized religions), and local comprador
crescimento e benefícios crescentes da chiefs and traders, defined international
economia globalizada, acabam por se trade for several hundred years. Though
deparar com um grande sentimento de the world trading system developed
dependência e isolamento. Particularmente considerably from the 16th century
vulneráveis são os relativamente mal onwards, it was only at the end of the 19th
qualificados e com baixa educação formal, century and the beginning of the 20th
especialmente nos sistemas de mercado century that significant transnational
que não desenvolvem atitudes activity emerged. This transnationalization
intervencionistas nas políticas de mercado. of economy and society is characterised by
the transfer of resources, especially capital
and to a lesser extent labour, from one
Palavras-chave: globalização, national economy to another. Typically this
organização, trabalho, política de mercado. involves the creation of production
capacities of a firm in another country
through direct subsidiaries, acquisitions, or
ABSTRACT various types of co-operation (commercial,
Since the time of the earliest financial, technological and industrial).
civilisations trade across frontiers and Hirst and Thompson (1996:74; 2-3)
regions has occurred but it was only at the have argued that the present highly
end of the 19th century and the beginning internationalised economy is not
of the 20th century that significant unprecedented and, in some respects, is
transnational activity emerged. The primary less open and generalised than that which
casualties of globalization appear to be low existed in the previous high-water mark of
skilled workers in traditional manufacturing the global economy of 1870-1914.
countries who either see their jobs slip Genuinely transnational companies are
away overseas, or experience a painful comparatively rare. Most companies are
slide in their wage rates as their employers nationally based and trade internationally
strive to reduce costs. Secondly, whole on the strength of national locations and
countries and regions find they have been activities. Yet, as Sklair (1999: 146)
sidelined by the forces of international suggests, their position “entirely ignores
trade and investment and, instead of the well-established fact that an increasing
experiencing a growing involvement and number of corporations operating outside
benefit from the global economy, may their `home' countries see themselves as
encounter a greater sense of dependence developing global strategies . . .You cannot
and isolation. Particularly vulnerable are simply assume that all `US', `Japanese'
the relatively unskilled and under-educated, and other `national' TNCs somehow
especially in labour market systems that do express a `national interest'. The world
not develop very active and interventionist economy is far from yet being truly
labour market policies. ‘global’.”
Hirst and Thompson (1996) are
Key-words: globalization; organizations; correct in as much as trade, investment
labour; market policies. and financial flows remain concentrated in
the Triad of Europe, Japan and North
America, and this dominance is likely to
continue, despite their being significant
Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 7

Stewart Clegg
regional players emerging in Latin America, globalization thesis it is such phenomena as

East Asia and elsewhere. These major G3 these, as the elements in globalization, that
economic powers have the capacity if they make possible the design, production,
co-ordinate policy, to exert powerful distribution and consumption of processes,
governance pressures over financial products and services on a world scale,
markets and other economic activities. using patents, databases, advanced
Thus, what is distinctive about the concept information, communication and transport
of globalization that has burst into technologies and infrastructures. The global
prominence in the last decade of the 20th economy creates ‘winner-take-all markets’
century is its economic magnitude and in which comparative advantage can be
pace. exploited on a world scale, and in which
While the extent of globalization only a privileged minority benefit.
varies markedly in different economies and The images of globalization are so
industries, the net result, however, is powerful that they are often presented as
considerable. Capital, people and ideas are dissolving national cultures, national
increasingly mobile. The electronic economies and national borders. It is not
movement of capital has vastly increased surprising that, in the view of some
financial flows while making them more theorists of globalization, the world has
difficult to detect or regulate. The apparently become ‘boundaryless’, despite
international flow of expert migrant the continued existence of borders between
professional and knowledge workers, as states and all the administrative devices
well as non-expert (personal and domestic) that maintain them. However, some critics
service workers, has helped to create a of the reckless use of the concept of
global labour market in a growing number globalization suggest there are some real
of occupations. Ideas and brand names limitations of the emergent phenomena of
travel the world, moving immediately globalization.
around the world through the global media, To the extent the world is becoming
and infrastructure is created globally to globalized it is between the Triad countries:
support new products and influence Japan and the newly industrialised
practices. Globalization means time lags in countries of South East Asia; Western
the introduction of products and services Europe, and North America. Technological,
are declining precipitously. Instantaneous economic and cultural integration is
communication technologies eclipse time as developing within these three regions and
they compress space – at least in the here- between the three regions and is evident in
and-now of communication. the pattern of international trade and
Once national markets were investment flows. Inter-firm strategic
relatively well established. Now there are alliances are heavily concentrated among
now numerous alternative routes for the companies from these Triad countries.
businesses to reach and service customers, The ‘Triadization’ of the world economy
taking away the advantage of those firms concerns scientific power, technological
that dominate particular channels. Cellular supremacy, economic dominance and
and satellite telecommunications systems cultural hegemony, and therefore the
bypass land based systems; the Internet ability to govern the world into the future
bypasses established sales channels. New (Petrella 1996:77)
international networks provide new While writers such as Petrella stress
opportunities and proliferating choices for economic factors, other theorists, such as
consumers. Activities once concentrated in Robertson (1992: 27) see globalization as
a few places disperse to multiple centres of concerned with the problematic and
expertise and influence. In finance, creative conjunction of different forms of
telecommunications, car manufacture and a life. 'In an increasingly globalized world
range of other industries the traditional there is a heightening of civilizational,
centres of control and technology are societal, ethnic, regional and, indeed,
encountering the growth of multiple centres individual, self consciousness'. Robertson
of innovation and influence. Corporations proposes capturing this through a model
are under pressure to disperse that relate national societies, the world
headquarters expertise to reflect the system of societies, selves and humankind.
changes taking place in markets and The key aspect linking these together is
industries. For proponents of the relativization (see figure 1).

Figure 1 - The Structural Relativization of Globalization
National World system

societies of societies
Selves Humankind
Each arrow represents an aspect of relativism and tension to the settlement of

relativized connectivity. On the top, linking space through nation-state forms. In the
national societies and the world system, is value-sphere there is the rise of
the relativization of societies. Along the postmaterialism. More complex notions of
bottom, linking selves with humankind, there personal identity emerge, attendant upon the
is the relativization of self-identities. Linking revolution in gender, sexual, ethnic and racial
national societies to selves there is the mores. The interpenetration of culture and
relativization the problematic of the relation economy produces new markets of
of individuals to society. Linking the world microtization, increasingly premised on the
system of societies there is the relativization differentiation of identity. With the demise of
of the relationship between the Realpolitik of the Cold War the globalization of problems of
the world system and the rights of 'rights' occurs in a world that is no longer
humankind within that world system. Linking politically bipolar. There is an increase in
national societies to humankind is the global institutions, organizations and
relativization of citizenship. Linking the world initiatives and the emergence of global
system to selves, is the relativization of communication through e-mail, satellite TV,
societal relevance. CCN etc. These help to give rise to a global
Globalization, rather than foreclosing ecological consciousness, manifested through
questions of identity in convergence on one phenomena such as the Rio Earth Summit,
form, opens them all up in a thoroughly and the appreciation of the global warming
postmodern way, which we can see in a threat posed by the thinning of the ozone
number of features that develop from the layer. Old questions of identity re-emerge in
1970s onwards. These include the emergence the modern era, partially as a consequence of
of an increasing separation of the 'real' the break-up of State Socialist hegemony,
economy of production and its simulacra in principally in the former USSR and the
the 'symbol economy' of financial flows and Balkans, but also through the assertion of
transactions. There was an emergence of a religious identities founded in Islam,
new international division of labour and a Orthodox Christianity and, sometimes, as in
new international financial system, the latter East Timor, Catholicism.
centred on London or Hamburg, New York Globalization leads to complexity,
and Tokyo. This new international division of relativity, compression, collision, and
labour is truly global, compressing and postmodern plurality. However, the global
fragmenting both space and distance such economy has been viewed principally through
that not only the sphere of production but forms of fundamentalism (Robertson, 1992).
also the sphere of circulation, such as the As we shall see, much of the focus on
various business-service industries, is globalization has been constructed in terms
globalizing. These new divisions restructure of an agenda dominated by global business
geographic space in ways that introduce both interests and formal political responses to

Stewart Clegg
them. How can one rectify the basic that theorists such as Spencer held out for
theoretical assumptions that undergird such modern times, seems to be materializing.
reductionism? Let us focus first on what is Warfare as a form of societal interaction in
appropriate in Robertson: that is, the the postmodern conjuncture is a form of
reflexive autonomy of selves, societies, world sociability in decreasing frequency – at least
systems and humankind. What is lacking, is between the core nations. In the peripheries
a conception of the circuits or conduits it is another matter. Today, while it is by no
through which this autonomy is reflexively means always the case that intermediation is
intermediated. through circuits of organized production and
consumption, although it is increasingly so. It
In the past such intermediation might is the organizational aspects that Robertson
most frequently have been through warfare misses. To correct this, in place of his model,
but, in these postmodern times, the promise we propose Figure 2.
Figure 2 - The Organizational Relativization of Globalization
National societies World system of

oganized as a global economic
global system of actors
states
Organizational circuits
of production
and
consumption
Selves Humankind
These organizational circuits may trade. A single centre of calculation

take many shapes, many forms. However, a dominates them and they have a
limited architectrony characterizes their geographical flexibility that enables them to
structuration. Transnational Corporations shift resources and operations between global
structures much of the changing shape of this locations.
global circuitry, as we have argued The existence of a single centre of
previously. Such organizations have calculation in TNCs as key actors in the
significant control over both production and globalizing economy might suggest a
consumption in more than one country. They sovereign power but it would not be
have an ability to take advantage of geo- appropriate to think this. There is a plurality
political differences between countries and of TNCs, which do not necessarily dominate
dominate world trade through their internal national industrial sectors in all markets, and
trade, amounting to about 25% of world operate across more or less sovereign states.

The world system of both states and TNCs ensuring employment, and therefore,
involves relations that are not only individual and collective well being.
concertative but also competitive. Only a Transnationals stand at the core of
small number of TNCs are truly global nor are globalization arguments that stress the
all TNCs necessarily 'large' in conventional actions of business and the rise of markets.
definitions of that term. Global patterns of Petrella (1996) defines the
transnationalization differ markedly according characteristics of contemporary globalization
to the national origin of the transnationalizing in terms of a number of organizational
firms. New supplies and sources of TNCs characteristics. These include the
evolve as the world economy evolves, so that internationalization of financial markets and
we now have the case of emergent NIC TNCs. corporate strategies and the diffusion of
New forms of disciplinary power emerge as technology and related R&D and knowledge
changes in generic technology systems worldwide. Among the impacts of these are
develop, often in relation to 'long wave' the transformation of consumption patterns
phenomena, such as the emergence of into cultural products through world-wide
information technology. consumer markets as well as the
There is little doubt that the major internationalization of the regulatory
players are the transnational (or as they are capabilities of national societies into a global
sometimes referred to, multinational) political economic system, and a diminished
companies that have acquired a new role of national governments in designing the
significance and assertiveness as individual rules for global governance. Other
nation states apparently have diminished in implications include the emergence of socio-
their capacity to influence the economic critical responses to a highly competitive
events of the international economy. These global economy as well as the cultural and
companies have transformed themselves to ecological impact of these tendencies
become ‘global’ players and therefore operate (Therborn, 2000b). Additionally, we need to
at the most influential level of decision- be able to identify the winners and losers in
making. The world economy gives top globalization. Consideration of these aspects
priority to technology and to those who of globalization is illustrated in Table 1,
research, develop and produce technology, reflecting the weight given to transnational
overwhelmingly the transnationals. enterprises, which will be used to structure
Transnational companies are considered to be this entry.
the key actors in the production of wealth,

Stewart Clegg
Table 1 - Concepts of Globalization in the Organization of Production and

Consumption
Concept Category Main Elements/Processes

Deregulation of financial
Globalization of finances and capital markets, international mobility
ownership of capital, rise of mergers and
acquisitions. The globalization
of shareholding is at its initial
stage
Integration of business
activities on a world-wide scale;
establishment of integrated
Globalization of markets and operations abroad (including
World system of global economic strategies R&D and financing); global
actors sourcing of components,
strategic alliances.
Technology is the primary
catalyst: the rise of information
technology and telecoms
Globalization of technology and enables the rise of global
linked R&D and knowledge networks within the same firm
and between different firms.
Globalization as the process of
universalization of lean
production.
State centred analysis of the
National societies organized as a Globalization and the influence of integration of world societies
global system of states government policies; Changing into a global political and
States economic system led by a core
power
Transfer and transplantation of
predominant modes of life.
Equalization of consumption
Global production of concepts of Globalization of consumption patterns. The role of the
selves patterns and cultures media. Transformation of
culture in ‘cultural food,’
‘cultural products’. GATT rules
apply to cultural flows.
Socio-cultural processes as
Globalization of perceptions and centred on ‘One Earth.’ The
Humankind consciousness ‘globalist’ movement. Planetary
citizens. Ecological
consciousness.
their technological and organizational

advantages, and reduce business costs and
2. WORLD SYSTEM OF GLOBAL ECONOMIC risks. Underlying the international expansion
of firms, and in part driven by it, are
ACTORS technological advances, the liberalization of
markets and increased mobility of production
Globalization of Finances and Capital factors. Successful firms operating
Ownership internationally usually have technological and
Globalization is marked by the organizational advantages over purely
integration of deregulating markets and domestic ones. Foreign affiliates tend to
technology and facilitated by have higher labour productivity, are more
telecommunications and ease of transport. investment-intensive and trade-oriented than
The active agents in this process of the average for domestic firms. These are
globalization are firms involved in due to the high-technology, high-wage and
international circuits of exchange involving capital-intensive industries in which
international investment, trade and international firms operate, their larger size,
collaboration for purposes of product and their use of advanced production and
development, production and sourcing, and management methods and a more skilled
marketing. These international activities workforce (OECD 1996:16).
enable firms to enter new markets, exploit

Industrial globalization is changing spreading of risk, increasing the diversity of

the scope and distribution of world business international financial markets. The global
and expanding the presence and influence of integration of financial markets collapsed
foreign companies in national economies. time and space, creating a potential for
Firms and industries are being restructured virtually instantaneous financial transactions
and rationalised at transnational level as in loans, securities and other innovative
production factors become increasingly financial instruments (Dicken 1992:364). The
mobile and communication costs decline. deregulation and internationalization of
New patterns of industrial specialization and financial markets created a new competitive
new competitors emerge rapidly, changing environment (Harvey 1992:161) in which the
the competitive position of firms and global integration of financial markets
countries. At the same time, economies are brought many benefits in speed and accuracy
being increasingly linked and integrated of information flows and rapidity and
through the global strategies of firms (OECD directness of transactions.
1996:17). The increasing coordination of the
It is a familiar comment that the world's financial system emerged to some
economic scale of the largest of these giant degree at the expense of the power of nation
corporations now exceeds the gross domestic states to control capital flows and hence fiscal
product of most countries. Unsurprisingly and monetary policy, powers. In a world of
these companies are exclusively domiciled in floating exchange rates, many governments
Triad countries. International financial flows have had occasion from time to time to
and foreign currency exchanges now dwarf quickly rewrite their political programs in the
the value of international trade in goods. The face of strong capital flight from their
global financial system has become country. At times when confidence in a
extremely volatile and very complex. The national currency is tested it is evident that
implications of this for the global economy the definition of a weaker nation state is that
are enormous, because financial services are it can no longer hold the line. Instantaneous
circulation services, they are fundamental to financial trading means that shocks felt in
the operation of every aspect of the economic one market are communicated immediately
system. Each element of the production around the world’s markets. The global
chain depends upon necessary levels of financial system is more sensitive and volatile
finance to keep the chain in operation. This as a result of the telecommunications
is true not just true of manufacturing but of revolution, as demonstrated in the South
all intermediate and consumed services in the East Asian monetary collapses of late 1997.
system (Dicken 1992:358). How near to the ‘edge of chaos’ the
The intensified competitiveness of international financial system has moved is
international financial markets is due to a an open question (Cohen 1997:27-9) The
number of factors. During the 1970s and speculative basis of much of the system
1980s rising inflation, accompanied by rising suggests that those protective mechanisms
interest rate charges, made corporate that exist have simply rescheduled a global
borrowers more inclined to make investments financial crisis rather than prevented it
or raise capital without going through the (Harvey 1992; Niederhoffer 1997).
intermediary channels of the traditional Harvey (1992:194) suggests the
financial institutions. Their preference was for financial system has achieved an
the commercial paper market for short-term unprecedented degree of autonomy from real
funds, and the bond market for long-term production. The global economy has in many
financing. Deregulation of financial markets ways become dominated by an economy of
by national governments led to the opening signs representing capital flows, rather than
up and liberalization of new geographical an economy of things. Of course
markets, new financial products, and changes manufactured and other tradeable products
in pricing policies. Internationalization of and services are important, but at the core of
financial markets created a growth in the key decision-making in the contemporary
international trade, which increased the globalized economy, are intangibles, such as
demand for commercial financial services on trust in a currency’s future value, and bets
an international scale, and the spread of hedged against those judgements of trust.
transnational operations created a demand What makes this possible, what globalises an
for other international financial services. economy of signs, are the instantaneous
Increased institutionalization of saving representational possibilities afforded by a
created an enormous pool of administered wired world. For many authors, such as
investment capital seeking the best return on Harvey (1992), it is these possibilities that
an international basis. open the door on a more postmodern
The array of new financial analysis.
instruments that emerged provided new
methods of lending that facilitated greater

Stewart Clegg
Globalization of Markets and Strategies Developing countries are becoming

Globalization is not a totally new players in foreign investment themselves.
phenomenon. However globalization now is The largest TNCs from the developing
both quantitatively and qualitatively different countries come principally from Brazil, South
from before. First, since the eighties, when Korea, Hong Kong and Taipei. However
faced with a slowdown in growth, national dozens of countries are not receiving any
governments have accepted the necessity of significant foreign direct investment, and
keeping markets open in spite of the cost, there is strong and continued concentration
whereas in the 1930s countries built high of FDI in a handful of countries, principally
tariff walls to keep competition at bay. the US, followed by the UK, Germany, and
Second, the deregulation of financial markets Canada (Weiss 1997: 10). Political instability,
has unleashed new forces not previously seen poor market prospects, and severe debt
in the tightly regulated financial institutions servicing problems in some parts of Latin
of the recent past (Boyer and Drache America, almost all of Africa and parts of the
1996:13). What changed through the 1980s Middle East are still excluding them from
and 1990s, is that firms have used new membership of the globalization club. In
combinations of international investment, contrast South East and East Asia have
trade and collaboration to expand experienced an inward investment boom with
internationally and achieve greater a doubling of investments between 1980 and
efficiencies. They are uneven in their 1991 (although this has to be seen less in
development, however. comparison with its past and more in contrast
The growth in international trade has to the present state in the US and Europe).
been outstripped by the growth in the flows In Latin America extensive privatization of
of international direct investment (despite major public industries has kicked inward
the downturn in the early 1990s) and in the investment forward, with, for example, 80
number of international collaboration per cent of the inflows into Argentina
agreements. Cross-border operations are still resulting from the acquisition of shares in
largely concentrated in the OECD area, but privatised firms (OECD 1996: 56). Although,
have involved an increasing number of firms more recently, Argentina has not been a case
from more OECD source and destination that anyone would want to recommend as a
countries. Outside the OECD area, the successful example of globalisation as it’s
dynamic Asian Economies and China have feckless governmental and banking
increasingly been involved in the process of institutions have reduced the middle-classes
globalization. Previous historical patterns of to a poverty they could never have imagined
cross-border transactions linking firms to raw in the heady days of dollarization. They are
materials and final markets have been re- hardly the success story for free market
shaped by international intra-firm and inter- economies that they were once held up as, as
firm operations, focused on technological a success story sucking in foreign capital.
development and co-operation, different Rather more a black hole these days.
phases of production, and external sourcing More European North American and
and intra-firm trade in intermediate outputs Japanese companies – though not so many
(OECD 1996:20 from elsewhere – are becoming increasingly
The growth of trade as a measure of international in their operations and interests
globalization is becoming replaced in though few companies have reached the
significance by the rapid expansion of stage of being truly global concerns. The
international foreign direct investment (FDI). progress toward internationalization can be
A large part of foreign direct investment typified in a number of ways, the OECD
takes the form of mergers and acquisitions. (1996:21) suggesting a series of stages that
International expansion of firms has could resemble the life cycle of growing
increased the relative importance of foreign companies as they stretch their wings from
ownership in OECD countries. Foreign the domestic to the international market.
ownership is most evident in high technology Today, global companies have
industries. Foreign enterprises account for a integrated international operations in all
large share of production in most of these major regions including management,
industries in the major OECD countries, with financial control, product and process R&D,
the important exceptions of Japan and the production, and marketing.
United States. In the case of Japan it has For Alfred Chandler in Scale and
been difficult for foreign capital to become Scope (1990) the evolution of the global
established in productive investments. The corporation is the final stage in
United States attracts substantial amounts of transformation of industries in search of
overseas investment but this still represents economies of scale, economies of scope, and
only a small share of the largest national national differences in the availability and
economy in the world. cost of productive resources. In many
industries, economies of scale are such that

volumes exceeded the sales levels individual each other. TNCs face a dual challenge to
companies could achieve in all but the largest compete in global markets and to produce
countries, forcing them to become tailored solutions, in this context strategic
international or perish. The minimum alliances help transfer technology across
efficient level for capital intensive plants is 80 borders. Access to new markets is facilitated
to 90 per cent of capacity, in contrast to by using the complementary resources of
labour intensive industries. The costs and local firms, including distribution channels,
profits of capital intensive industries are and product range extensions. Sometimes
determined by plant utilization and inter-firm cooperation is a second best option
throughput, rather than by the simple to direct investment, particularly to smaller
amount produced. companies, which allow the exploration of
Less capital-intensive industries are market opportunities that may be
not as affected by scale economies. But approached later with more elaborate market
opportunities exist for scope economies strategies. Partners pooling resources
through worldwide communication and provides the benefits of economies of scale,
transportation networks. Trading companies and an increased rate of learning. Alliances
handling the products of many companies allow partners to leverage their specific
can achieve greater volume and lower unit capabilities and saves costs of duplication.
cost. With changes in technology and Apart from the direct promotion of
markets came requirements for access to international collaboration, as for example in
new resources as lower factor costs. It is European Community programs, government
misleading to assume that the search for policies may indirectly favour co-operation in
cheaper labour in itself is the central driving the same way they stimulate direct
force of the increasing internationalization of investment. Where there are limits on local
many industries. In most industries there participation of foreign companies, joint
are more important factors than labour costs, ventures and minority equity participation
including access to markets, technology and becomes prevalent. Where there are national
other resources. Increasingly industry differences in intellectual property,
requires more highly skilled labour and the environmental standards, and other
possession of relevant skills is more regulations, inter-firm agreements may
immediately important than the price of products to be accepted by local regulatory
labour. Of course labour intensive industries authorities. Finally, competition policy
survive, in which reducing the cost of the limiting collaboration in the home market
labour input to the barest minimum is a may encourage firms to seek foreign partners
primary motivation. However the and expand internationally.
international search for cheap labour is a
short-term strategy, as the conditions which Strategic alliances are a way of
create cheap labour are eliminated. No focusing investments, efforts and attention
country will ever build a competitive only on those tasks that a company does
advantage based on cheap wages, even if, well. All other activities can be out-sourced
for a short time, some companies that either through alliances or subcontracting.
operate in it might. Another way of looking at virtual companies,
Striving to succeed in fast-moving alliances and joint ventures is as the out-
markets requires most companies to be sourcing of risk, allowing organizations at
involved in frequent collaboration in order to arms length from the parent companies to
compete. Hence the importance of building take risks more freely, something which the
strategic alliances. Yoshino and Rangan parent firms wish to avoid. However, while
(1995:17) define alliances as ‘cooperation the vast majority of cross-company
between two or more independent firms collaborations are founded on a basis of trust
involving shared control and continuing and shared commitment, even the most
contributions by all partners.’ They identify carefully constructed alliance can become
the major strategic objectives of alliances as risky. Often strategic alliances become
maximising value; enhancing learning; short-term solutions that mask deeper
protecting core competencies and deficiencies in the companies concerned, and
maintaining flexibility. ‘The more a company these cause problems later when the
becomes globalized, the more it is likely to company is still vulnerable.
lose its own identity within a tangle of Inter-firm collaboration may also
companies, alliances and markets’ (Petrella carry the cost of strategic and organizational
1996:76). complexity. There are different mentalities in
Particularly in industries where there different companies, for example an
is a dominant worldwide market leader, accounting emphasis in US and UK
strategic alliances and networks allow companies, which are very stock price
coalitions of smaller partners to compete oriented. In contrast Japanese, Dutch and
against the leading companies rather than Swiss companies are indifferent to stock

Stewart Clegg
price. Alliances are essentially an worldwide basis becomes the key defining
intermediate strategic device, and part of a competency of leading international
web that includes many other transactions. companies (Porter 1995:123).
Around half of all cross-border strategic According to the OECD (1996:46) the
alliances terminate within seven years. One main motives for setting up technology
or other of the partners finally purchases related agreements focuses upon the search
most alliance businesses and termination of for technological complementarities. These
the alliance does not mean failure. But the might be to extend R&D capabilities; reduce
prevalence of early terminations suggests it innovation time-spans; increase efficiency in
is important to consider whether parties are getting new products and processes to
likely to be buyers or sellers. markets; gain market access, and to
restructure mature technologies and slow
Globalization of Technology and linked growth industries. One consequence is that
R&D and Knowledge high technology industries are converging,
Globalization is driven by the for example in the integration of computers
strategic responses of firms as they exploit and telecommunications, bio and chip
market opportunities and adapt to changes in technologies, and advance materials and
their technological and institutional aerospace/autos manufacturing. Thus, in the
environment, and attempt to steer these industrial countries there is higher import
changes to their advantage. There are a penetration in high technology industries,
number of important technology related followed by medium-technology industries,
factors that have contributed to the with domestic production satisfying demand
emergence of globalization, including in low technology industries with the
declining computing, communication, co- exception of clothing and footwear. That is
ordination, and transport costs. Additionally, high-wage industries are more heavily
there is the increased importance of R&D, represented in imports, which contradicts the
and the speed up of product development impression that the imports of the industrial
cycles, leading to reduced product lives and countries are largely composed of low
the shortening of imitation time lags. New technology, low-wage goods. Industrial
types of industry have emerged that are countries increasingly specialise in high
knowledge-intensive, such as financial technology industries, which consequently
services, and there has been an increased feature more prominently in both their
customization of both intermediate and imports and exports.
finished goods, as well as of customer- International sourcing of parts and
oriented services. materials is a major feature of global
The most important competitive force production systems and accounts for a large
in the global economy is the capacity for part of total trade. With increasing
innovation, a thesis powerfully illustrated by globalization, intra-firm trade grows, as firms
Michael Porter (1990) in The Competitive move components and parts to the location
Advantage of Nations. Porter correlates the of final assembly and finished products to the
advance of knowledge, achievement in final market. Intra-firm trade (IFT) refers to
innovation and national competitive products that stay within a transnational
advantage. In his search for a new paradigm enterprise. Market imperfections and high
of national competitive advantage Porter transaction costs provide an incentive for
starts from the premise that competition is firms to internalise international transactions
dynamic and evolving, whereas traditional of goods that embody firm-specific
thinking had a static view on cost efficiency knowledge and expertise. Over one third of
due to factor or scale advantages. But static US trade is intra-firm trade and
efficiency is always being overcome by the approximately 25 per cent globally takes
rate of progress in the change in products, place inside companies (Ruigrok, 1991).
marketing, new production processes, and In terms of macro-economic factors,
new markets. there are a several important drivers of
The question is why do industries in globalization, including the long-term postwar
some countries invest in innovation more drift downwards in the price of the majority
vigorously and successfully than others? of commodity factor inputs and their
Firms do not simply maximise within fixed substitution by new technology products,
constraints but ‘gain competitive advantage such as fibre-optic cable and silicone chips.
from changing the constraints.’ The crucial These are clearly related to the innovation
issue for firms, and nations, is how they factors already addressed. The rapid
‘improve the quality of the factors, raise the development of knowledge-intensive skills
productivity with which they are utilised, and and capabilities in some countries, regions
create new ones’ (Porter 1990: 21). The and industrial sectors lead to significant
capacity to successfully innovate on a productivity differentials between firms in
different locations. The shift, from the early

1970s onwards, to a global regime dominated supporting intermediaries who deliver

by a fluctuating market in exchange rates, services to business.
exacerbated these underlying differences as As for the future the OECD
mobile capital moved to those regions of the recommends a series of economic and
world economy offering the best return. technical policy measures for countries to
The present context for business is make an adequate response to the
one of heightened competitiveness due to competitive pressures of globalization.
more optimal location of production and Business performance will be enhanced by:
greater firm efficiencies, particularly in improving investment incentives in intangible
intermediate inputs and components. assets, particularly human capital; promoting
Additionally, there is more foreign investment international co-operation in long term
and trade in domestic markets, and increased generic research; helping innovation by
competition in foreign markets, with overall diffusing new product technologies and new
more operations by all kinds of foreign firms production methods; encouraging incentives
in all national markets. Such economic for the flow of finance to small firms, and
activity at present is concentrated in the promoting investments in the service
advanced industrial countries. Firms from the infrastructure.. Additionally, the OECD
developing world are increasingly competing recommends the adoption of international
on the basis of the same high quality inputs, best practice; improving management
however, and are becoming closely linked to performance, and promoting industrial
the existing industrial markets, through modernization with targeted programs for
international investment, contracting and problem areas to help deal with lack of skills,
supply networks in high technology poor technology, and financing barriers.
industries, as well as in traditional industries. The policy frame within which the
OECD (1996:63) makes its recommendations
focuses on ‘widening and deepening
liberalization on all fronts.’ What happens to
3. NATIONAL SOCIETIES ORGANIZED AS A countries and companies that despite their
GLOBAL SYSTEM OF STATES best efforts, for reasons beyond their control,
are less able to compete, at least at the
Globalization and the Influence of present time? It is doubtful that the older
Government Policies ‘industry policies’ premised on protection will
Government policies favouring be useful. The collapse of the East Asian
globalization included the lliberalization of economies during 1997 underscores this
international trade and capital movements, point. Today, protectionist remedies are less
as well as the promotion of regional effective than they may have seemed to be in
integration through bodies such as NAFTA the past.
and the EC, and national competition policies. At the very time political action may
Within these blocs, especially the EU, the be necessary to remedy some of the more
development of inward investment incentives destabilising impacts of globalization on the
and R&D, technology, small firm and related world system the significance of the nation
industry policies, lead to significant state has been considerably weakened. The
developments in previously less-advantaged largest twenty transnational corporations
regions, such as Eire. Governments have have a turnover in excess of the GNP of most
developed an increased awareness of nation states. The onset of globalization
intellectual property rights and effective questions profoundly the traditional role and
patent life. viability of the nation state. National
Governments throughout the world institutions have lost some of their principal
have struggled with the policy implications of importance whereby they represent a
having to deal with such dramatic and genuine shared community of economic
seemingly perpetual industrial restructuring interests concerning such matters as public
caused by the impact of globalization. The finance, trade policy, wealth creation, and
OECD records a broad shift by member civil rights. Kenneth Ohmae (1993:78)
governments by the end of the 1980s away insists the nation state ‘has become an
from general investment, short-term crisis unnatural, even dysfunctional unit for
aid, and subsidies for sectors facing over- organising human activity and managing
capacity and structural problems. Industry economic endeavour in a borderless world . .
support expenditure by governments has .it defines no meaningful flows of economic
become more strategic and shifted towards R activity. ‘The reasons for this are evident in
& D, trade and support for foreign expansion. the seeming triumph of markets over politics:
There was increasing focus on improving the as Drache (1996:32) insists, ‘Efficiency has
operating conditions for companies and become the universal belief of all major
corporations and most leading industrial
powers. In their view, capital has to be free

Stewart Clegg
to move across national boundaries if the government of the territories in which it

world economy is to recover its past élan. operates, especially as a taxing authority
Firms have to reorganise their production to (Bartlett and Ghoshal 1995:119):
take advantage of the new opportunities. These objectives do not always
People are expected to accept these new appear compatible with government priorities
employment conditions to accommodate to a to develop prosperous national economies
world where business is no longer bound by that can hold their own in world competition.
national borders.’ This is the underlying belief The difficulty is that governments conceive of
of those who argue for free trade. Bhagwati capturing global competitiveness within the
(1988: 33) defines this as a covenant national economy, and TNCs think of it in
between governments and markets such that terms of the global system. The logics of
‘the logic of efficiency has to determine the action of governments and TNCs differ
allocation of activity among all trading greatly: the TNC has a bottom line that it can
nations.’ reduce costs and benefits to, while
In a world where the rules of governments have a far more complex and
international trade are being redefined, and ambiguous set of life-chances to deal with.
traditional protectionism is not an option, As rising import penetration became
states have to make a choice between the perceived as a serious economic threat to
prospects of free trade with associated costs, national economies in the 1980s, even those
or developing the conditions for managed governments which advocated free trade,
trade. Many countries have sought to join a such as the United States, began to negotiate
trade bloc, whilst building a regulatory voluntary restraint and orderly trade
environment which offer incentives for agreements. At the same time the industrial
economic growth through institutional policies of governments became more
arrangements that protect national sophisticated. They sought to prevent the
economies from international economic use of 'screwdriver plants' to evade trade
disorder (Tyson 1992). Meanwhile there is a restrictions, through simple assembly of
push to dismantle existing social programs in products essentially manufactured overseas.
the advanced industrial countries, coming Such plants offered low skilled employment,
from businesses concerned about the need to with little local value added, and minimal new
change cost structures to compete technology. To prevent this some
internationally. Governments find it difficult governments applied investment regulations
to reconcile their existing social programs for that defined specific levels of local content,
health, education, and retirement with the technology transfer, and a variety of other
demands of footloose business to make their conditions, in an effort to make TNCs
economy more competitive. What is in increase the extent of their local activities.
danger of being lost is, in Drache's (1996:44) The concept of global corporations as
words, ‘any viable notion of social roaming stateless organizations staffed by
responsibility — the institutional capacity for functionaries who are global citizens, working
the achievement of a more equitable society.’ out of a laptop while living in identical hotel
Also at risk are those many fibres of a civil bedrooms in whatever part of the world they
society, its ‘social capital’, that enable a happen to be in today, are somewhat wide of
market economy to operate efficiently. the mark. ‘Companies can out-source; they
TNCs often represent important can decentralise operations; they can
external sources of investment, technology, relocate. But when all is said and done, even
and knowledge for national governments that transnational giants have to put down roots
may further national priorities, including and build strong ties with communities if they
regional development, employment creation, expect to excel’ (Drache 1996, 57). Which
import substitution, and export promotion. means working with governments. Of course,
To the company the government offered government actions often work well for
access to local markets or resources, and transnationals: for instance, downsizing of
opportunities for profit growth, as well as the state often produces new commercial
improved competitiveness. However, a opportunities in fields such as defence
fundamental tension exists between national contracting and telecommunications.
governments and TNCs in their operating
objectives. Transnationals want unrestricted Changing States
access to resources and markets throughout Can pressures for a smaller state be
the world and freedom to integrate associated simultaneously with a responsible
manufacturing and other operations across rethinking of the role of the state in a global
national boundaries, as well as an unimpeded economy? There is a view that suggests that
right to co-ordinate and control all aspects of their has been a serious diminution of
the company on a world-wide basis. Thus, national sovereignty as a result of
governance of the corporation, especially as globalization, such that the capacity of states
a taxable entity, can frequently cut across

“to function as autonomous national 'national' enterprises from the given country
policymakers has been seriously eroding. Few have a stable home base. Privileged access to
governments in the world today risk a serious the domestic market via public contracts
confrontation with the economic policies dear (defence, telecommunications, health,
to the IMF and World Bank” (Markoff, 1999: transport, education, and social services) is
827). In short, states are weakening in the also often required. Some transnational
global marketplace, according to this firms also require what they regard as an
hypothesis. appropriate industrial policy, particularly for
However, despite the weakening those in the high technology strategic sectors
hypothesis, most of the social and economic (defence, telecommunications, and data
programs of national governments, even processing). Such a policy would protect
though they have been subject to severe designated sectors of the domestic market
efficiency drives, and a transformation in from international competition, as well as
management, resourcing, and methods of support and assistance (regulatory,
delivery, are still in existence. Even after the commercial, diplomatic and political) for local
great waves of privatization that have swept companies in their efforts to survive in
the world, as Drache (1996:54) contends, ‘it international markets.
is premature to announce the death of the Often these expectations will be
nation state. Countries remain in charge of represented in terms of a logic of capital
the essential part of their national mobility. That is, if the local state does not
sovereignty: law making and jurisprudence; provide the required sweeteners, mobile
macro-economic policy, including money, capitalism will simply exit the scene and set-
finance and taxation.’ Considerable up where the benefits sought can be ensured.
evidence, from many different countries, The thesis is overstated because in terms of
suggests the emergence of a new paradigm the important criteria of share of assets,
of public management, one that is results- ownership, management, employment and
oriented rather than inward-looking, one that the location of R&D, home bases remain
sees the state role as that of an enabler important. Very few firms are genuinely
rather than provider (Clarke 1994). It is less transnational in these respects (Weiss 1997:
the death of the state that we are witness to 10, citing Hu [1992]). With Petrella (1996)
but more the decline of politics as compared and Weiss (1997) we can conclude that the
to markets, and the increasing incursion of proponents of strong globalization eroding
the former on the latter. state capacities oversell the proposition: they
The belief in the superiority of "the emphasise the extent and the novelty of
market" over "the state" has, as Markoff international investment while underrating
(1999: 288) suggests, “many components the capacities of states to adapt and to
ranging from ethical claims about human innovate around their specific national
freedom to technical claims about efficiency.” institutional frameworks. Globalization is
Private sectors, local communities, families, itself in part a consequence of these
individuals, or free markets are the political adaptations and innovations, especially in the
actors favoured in various new political cases of the most successful NICs of East
rhetorics, for whom there are a consistent set Asia, such as Japan, implementing
of losers – those individuals identified as internationalization strategies. These are
state welfare claimants. particularly evident in the development of
The claims of some of the losers on global financial markets.
state resources, such as the unemployed and
the poor, may be in the process of being
diminished, but other claims remain strong.
Among the willing clients of national 4. GLOBAL PRODUCTION OF CONCEPTS OF
governments are the transnational SELVES
corporations themselves, as Petrella claims,
who, despite employing the rhetoric of the
market enterprise, expect rather a lot from Globalization of consumption patterns
the state. Transnationals expect states to and cultures?
cover the costs of basic infrastructures. If the proposition that globalising
These include things such as: funding of strategies form a universal force of unilinear
basic and high-risk research; universities and dimensions were true the homogenization of
vocational training systems; to promote and taste and consumption would inevitably lead
fund the dissemination of scientific and to standardization of products,
technical information and technology manufacturing, marketing and trade. This
transfer. Additionally, they expect them to saturation of markets, with a few common
provide tax incentives for investment in products gaining enormous profit, is
industrial R & D and technological manifested in the ‘cola culture’. Coca-Cola is
innovations, as well as guarantee that

Stewart Clegg
the world's most famous expression (after women’s movements at the local level,
OK), has the world's most famous brand the emergence of transnational feminist
name (worth an estimated US $39 billion), networks working at the global level, and
the adoption of international conventions
and is sold in almost 200 countries. Another
such as the Convention on the Elimination
similar example is MacDonalds (Ritzer, of All Forms of Discrimination Women and
199X). However, standardization has its the Beijing Declaration and Platform for
limits, and there are important cultural, Action of the Fourth Conference on
political and economic forces for local Women.
differentiation that have emerged powerfully
in recent years to question the logic of These are clear expressions of a
globalization. global discourse of rights, in this case
Not only have TNCs begun to realise applying to just over a half of humankind.
the limits to the homogenization of worldwide However, at the same time as these rights
tastes; consumers have stubborn inherent documents are issued globally, other aspects
preferences for a degree of aesthetic and of globalization have contradictory effects. In
cultural distinction. The arrival of flexible many ways, suggests Moghadam (1999:
manufacturing systems, including computer 376) working class and poor urban women
aided design and manufacture, enabled the have been the "shock absorbers" of
cost-effective pursuit of smaller, more highly neoliberal economic policies. Structural
differentiated market niches wherever they adjustment policies which increase prices,
appeared. Technology enables a fit between eliminate subsidies, diminish social-services
the global and micro markets in this respect. and increase fees for essentials hitherto
Flexible manufacturing technologies offer provided by the state place women at greater
TNCs a viable means to begin to respond risk.
more effectively to local consumer
preferences, and national government Globalization + Localization
restraints, while sustaining productive A paradoxical consequence of
efficiency. increasing globalization is the concentration
The spread of the mass media, of clusters of world class expertise in
especially television, means that in principle specialist industries in different local
almost everyone can be instantaneously economies around the world. This significant
exposed to the same images. However, the local dimension of the globalization
world is becoming less a `global village' and phenomenon consists of local economies built
more a ‘global market, in which privileged upon inter-linked networks of relations
commodities for sale are often based on the among firms, universities and other
hybridization and creolization, created from institutions in their local environment (see
the intermingling of peoples and items from OECD 1996; de Vet 1993; Storper and Scott,
different cultures. Music is perhaps the best 1993). Early specialization is reinforced by
example of this with the huge growth in the the growth of similar firms and institutions to
‘World Music’ market in the 1990s, when create highly competitive industrial and
Third World musicians, especially, became service clusters. Local geographic
global stars in the new niche market. But to concentrations of three broad groups of
do so they had to move through the circuits industrial and service activities have been
of power whose obligatory passage points noted. Highly competitive traditional, labour
were the global recording companies, such as intensive industries, which are highly
BMG, Sony and so on. concentrated, including textiles and clothing
One exception to this hybridization in some areas of Italy and the United States,
and creolization, although contested, is in the furniture production, shoes etc. High-
areana of rights. Globalization in the cultural technology industries often cluster around
sphere has meant the global proliferation of new activities. Well-known examples include
norms of individualized values, originally of biotechnology in San Francisco, semi-
Western origin, in terms of a discourse of conductors in Silicon Valley, scientific
‘rights’ (Markoff 1996). Such discourse is not instruments in Cambridge (UK) and musical
unproblematic: it meets considerable instruments in Hamamatsu (Japan). Services,
opposition from religious, political, ethnic, notably financial and business services,
sexual and other rationalities tied to the concentrate in a few big cities, such as
specificities of local practices, but it does advertising, films, fashion design, and R&D
provide a framework and set of terms activities.
through which resistance to these might be The OECD (1996:52) explains the
organized. Moghadam (1999: 368), for rationale for the local concentration of
instance, suggests that specialist I n terms of the advantages of
being in the same location as are similar
[T]he singular achievement of firms, specialised suppliers and contractors,
globalization is the proliferation of

and knowledgeable customers. Additionally, were clearly discernible in the shape of the
these locations tend t provide a good most advanced parts of the most advanced
technological infrastructure, and specialist societies. The reason was that the drivers of
research institutions, as well as a highly globalization were universal: hence there
skilled labour force, where specialization would be universal responses. (Echoes of this
within firms enables extensive out-sourcing turned up again in the 1990s in the ‘end of
(vertical disintegration) and encourages history’ thesis of Fukuyama [199X].)
similar new firms to be set up in the location
(horizontal disintegration). Globalizations
Globalization increases the The success of East Asia in the
competitiveness of these local economies by 1970s, despite the nostrums of development
attracting international firms with their own theory, questioned aspects of the global
specific advantages, and enhancing convergence interpretation, as Berger (1987)
established sourcing and supply relations. was not slow to realize in his book on The
Local firms individually may respond to Capitalist Revolution. Just as surely, so did
heightened competition through improving the crisis of 1997 and the subsequent
their innovative performance. Innovation unravelling of many of the economic miracles
may be extended through developing greater that had been lauded previously. Partly in
interactions between firms, suppliers, users, light of this debate, partly inspired by a
production support facilities, and educational broader debate about culture, a number of
and other institutions in local innovation writers have suggested, more or less
systems. Additionally, they may adopt lean implicitly, that the strengths of indigenously
production methods, more efficient embedded ways of doing things need re-
management techniques, greater local out- evaluation (Yeung, 2000). In some respects
sourcing and increase the use of local such reappraisal often attaches itself to
production networks, to increase efficiency postmodern themes where there is the
and spread risks and costs, by taking implicit idea that stages may be jumped and
advantage of local specialization in regional that societies can move from premodernity to
networks and industrial districts. Through postmodernity (Clegg, 1990). In this phase
building these they can improve production of thought, which characterizes the current
and service links with international firms sociological thinking about globalization,
investing locally. Local firms, particularly if there is a realization that convergence is
they are highly specialised, will cooperate neither necessary nor desirable. Individual
with international firms seeking identities, it is realized, differ greatly across
complementary resources in the specialised national societies as well as within them.
assets of small firms. Globalization measured Culture is increasingly seen as critical and
by incoming foreign investment tends to convergence is less likely and less productive
reinforce regional specialization, accentuating than divergence.
the development of special local economies One particular category of this is in
and enhancing the clustering of similar the struggles of indigenous peoples
activities. Some writers, following Robertson (Friedmann, 1999: 390). Although he
(1992), such as Clarke and Clegg (1998) and recognises the many injustices that have
Helvacioglu (2000), have referred to this occurred to indigenous peoples, globally, he
phenomenon of the interpenetration of the sees the situation as changing with the latest
global in the local and visa versa, as developments in globalization, “because the
‘glocalization’. indigenous is now part of a larger inversion of
Western cosmology.” The traditional
otherness of indigenous peoples is now seen
5. HUMANKIND as “a voice of Wisdom, a way of life in tune
with nature, a culture in harmony, a
gemeinschaft, that we have all but lost.
Not surprisingly, reviewing the Evolution has become devolution, the fall of
discussion thus far, one can note that civilized man.” Yet, a terrible irony attaches
business disciplines seem to view to this: either the indigene conforms to role
globalization in an almost one-dimensional in some kind of indigenously protected, and
manner, almost unreflectively, hardly hence “natural”, theme park or becomes
addressing broader social themes. Seen from more like us but with the patina of existential
this perspective globalization is a one way exoticism.
street, in which more and more of the world
becomes sucked into the vortex of the global Globalization of perception and
economy. Advocates of the convergence consciousness?
position supposed that all societies were Unreflexive analysis, focused on the
heading towards a future whose contours economic dimension considered only in

Stewart Clegg
relation to those selves whose profits are British or French in an economy where meat,
served by corporate power, leads to sperm, livestock, and meat derived products,
anthropocentrism, suggests Purser (1994), in such as gelatine and cosmetic additives trade
relation to the global constituents of the globally. Greenpeace, as an organization for
environment, including other selves, expressing a standardized moral
humankind and the natural environment. consciousness that can mobilize activists
Globalization of this reductionism is a 'death anywhere, can represent Canadian seals as
threat to the environment'. This will be the easily as those that are Russian and, through
case particularly where there is a high degree global media, can act its way into the global
of separation of the simulacraic from the real consciousness.
economy. Real economies root themselves in Globalization, rather than foreclosing
place; simulacra are free-floating signifiers. questions of identity in convergence on one
The free float of signification burns, wounds, form, opens them all up in a thoroughly
scars and mars aspects of place that it settles postmodern way (Meyer, 2000). Yet, it is
on, suggests Purser. Against this Purser simultaneously a process of compression of
proposes a new kind of 'search conference', a space and time and, consequent upon this,
new kind of 'community therapy' attuned to an exacerbation of relativities between
local issues. The prioritizing of localism narratives of self, society, the globalizing
occurs in the context of the compression of world and the increasingly transparent ways
the world and the intensification of of being human, one to the other, that this
consciousness in the world as a whole. While complex of compression and relativization
localism may be an appropriate point of presents. And these are not free-floating,
intervention qua resistance, it is likely that signifiers of equal weight in dreamtime
more strategically pointed intervention stories that imagine futures now rather than
oriented to the locus of calculation could be pasts. They are stories that lodge in different
more efficacious. A great deal depends on forms of consciousness, encoded in the lore
the practical correlates of the stress on of the elders, the wisdom of the tribe, the
localism as a project that seeks not to news on the airwaves, the sights and sounds
intervene from the 'West' into all those that come down the tube, the transmissions
spaces that this signification constitutes as through the satellites, optical cables and
'Other' but to enable these other ways of microwaves.
doing things to be recognized as authentic, Some global significations route more
useful and exemplary. One risk that such a global imagination than others. The Murdoch
project runs is that the 'other' will simply News Corporation satellite now spreads its
learn the new, therapeutic and mutualistic footprint all over the Asian region – except
discourse that is proposed as another China, which his recent marriage may well be
tutelary means, one where the subjects who a strategic move towards remedying.
embrace the process have, perhaps, a better Certainly, there is considerable fixity to the
grasp of disciplinary power than do messages that the media transmits but,
ingenuous and unreflexive 'postmodern recalling the error with which McLuhan
experts'. As Diawara (2000) stresses (in a (1964) started the whole globalization
discussion of western agencies and their work debate, there is also considerable diversity in
in the Malian Sahara), there is a need to the way in which they are interpreted,
work with and integrate local knowledge and instantiated and used. Fixity in forms of
culture with expert knowledge – not to production and distribution does not mean
oppose them as mutually impermeable closure in forms of cultural consumption.
spheres. Murdoch discovered this when he found that
Some subjects cannot grasp the his analysis of the digital age meant the end
momentous changes occurring in their of dictatorship was a message received
constitution. We think of whales, seals, (or extremely coolly in Beijing. His subsequent
‘mad’ cows whose ‘rights’ to be ruminants ditching of the BBC from his satellite
have been violated by organized agri-industry broadband, for unfriendly reporting, helped
and reasserted by government policies), and appease sensibilities somewhat, as have
other species subject of organized campaigns critical remarks about the Dalai Lama, and
to represent or save them in some way. The the diplomatic efforts of Wendy Deng, the
ecosystem as a whole is now often ascribed new Mrs. Rupert Murdoch. News Corp is an
rights and interests as are other entities undoubted winner of globalization – but there
incapable of interest representation, such as are also losers.
foetuses, those who are on life-support
systems, and so on. All of these are
represented as global subjects with assigned
rights and interests that some violate, others
ignore and a few choose to represent (Meyer,
2000, 239). It matters not whether a cow is

though that most jobs are still in non-

6. CONCLUSION: WINNERS AND LOSERS IN tradeable sectors. Unemployed truck drivers
GLOBALIZATION from China cannot relieve a shortage of truck
drivers in America. And even for the 16% of
American workers who make their living in
The primary casualties of manufacturing, the overlap of production with
globalization appear to be low skilled workers low wage countries is relatively small.
in traditional manufacturing countries who America's main competitors in most sectors
either see their jobs slip away overseas, or are other high wage countries, as is true of
experience a painful slide in their wage rates most OECD states.
as their employers strive to reduce costs. Classical trade theory assumed that
Secondly, whole countries and regions find capital and technology were not readily
they have been sidelined by the forces of mobile between countries. As a result
international trade and investment and, developed countries made capital-intensive,
instead of experiencing a growing high-tech products, while developing
involvement and benefit from the global countries were confined to low-tech, labour
economy, may encounter a greater sense of intensive activities. But a global capital
dependence and isolation. Particularly market has given poor countries better
vulnerable are the relatively unskilled and access to capital, and technology has become
under-educated, especially in labour market more transferable. Information technology
systems that do not develop very active and allows knowledge to be codified and diffused
interventionist labour market policies. across borders more rapidly, making it easier
At the other end of the labour market for developing countries to catch up. More
are some of the main beneficiaries of jobs and skills are entering the tradeable
globalization. One category of these people sector. As the prospects for those without
are the employees of the TNCs and those skills diminish, the opportunities for those
professionals who service these companies; with highly specialised skills suddenly
lawyers, researchers, consultants, IT experts, become global. “Winner-take-all markets are
and so on. Meyer (2000, 240-1) is spreading to more and more occupations,
unequivocal that those who are the subjects such as lawyers, doctors, bankers, academics
of the organization of scientific and and chief executives . . . increasing the
professional activity on a global scale are the opportunity for the rich to become even
real winners. Professional associations richer.” (Economist 1996a: 33).
represent such people, international This comparative advantage of the
knowledge-businesses, universities and developed countries however may well be
research laboratories employ such people as slipping away in significant sectors of service
do international governmental associations employment. Some people fear the new
and agencies. These are the people at home super-competition because the growth of
in airport lounges, with frequent flyer information technology allows for the
programs, and airline cards as global increasing codification of knowledge reducing
talismans of their universality. The category the need for physical contact between
also includes not just those whom he producers and consumers, Call centres are
identifies as being able to make universalistic the perfect example – they can be located
claims (whether about rights, science or any anywhere. Routines are cheapened by
other form of expert knowledge). It also routinization of existing tasks; re-engineered
includes those who are able to practice as tasks can then be moved to places where
universal experts in various global sports and wages are cheaper. The transaction costs
achieve representational status from their associated with doing so do not appear to be
sponsors – Nike, Adidas, and those other great: satellites and computers can ensure
transnational sports companies whose brands virtual linkage.
are ubiquitous. Despite the attention drawn to wages
Wood (1994) reckons that trade with and associated cost of taxes, issues raised by
developing countries is the prime suspect for journalists and politicians, the truth is that
the increase in inequality within industrial TNCs do not, by and large, invest where
countries. He estimates that it has reduced wages and taxes are the lowest. If they did
the demand for low-skilled workers in rich the theory of comparative costs would work
economies by more than a fifth. In evidence, far better than it does. The reasons are self-
he points to figures showing that ‘between evident: wages are often a minor cost-factor
1970 and 1990 those countries which saw in TNC calculations; greater transaction costs
the biggest increase in manufactured imports are associated with the presence or absence
from developing countries also suffered the of densely embedded networks for business
sharpest drop in manufacturing's share in in particular locales. Additionally, domestic
total employment.’ It must be recognised linkages institutionally frame businesses in
embedded relationships with universities,

Stewart Clegg
financial institutions, government institutions, jobs, housing or whatever. But we also find
and so on. Government-business relations S11 anarchists, agreeing, in Sklair’s
typically have an exclusive rather than open (1999:158) words that “globalisation is often
character and can be an important seen in terms of impersonal forces wreaking
component in building national competitive havoc on the lives of ordinary and
advantage (Porter 1992). defenceless people and communities.” As he
An emerging danger is that goes on to say, it “is not coincidental that
competitive advantage in the future will open interest globalization over the last two
up the possibility of global domination more decades has been accompanied by an
rapidly than it was ever achieved in the past. upsurge in what has come to be known as
Brian Arthur (1996) argues that in a growing New Social Movements (NSM) research
number of industries there is a natural (Spybey 1996, chapter 7, Sklair 1998).”
tendency for the market leader to get further NSM theorists argue for the importance of
ahead, causing a monopolistic concentration identity politics (of gender, sexuality,
of business. ethnicity, age, community, and belief
If the aim of international systems) in the global era. S11 are a perfect
competition is to win, only a few can be example of this – and their strategies are
winners. A real danger is that the losers are based on global tactics. They do not seek to
excluded and abandoned to their situation. build effective conventional political alliances
The winners come together and increasingly and positions but use the tools of
integrate with one another. Where such globalization, such as the internet, to create
processes occur within societies serious activist ‘happenings’ as spectacular media
consequences may result in terms of events whenever the leading global players
increased poverty, unemployment, alienation meet internationally.
and crime. But the consequences are of a
higher order of magnitude when the The continuing impulse of markets
processes of exclusion and alienation involve and technology to integrate the world will
countries and whole regions of the world. require a considered response. Elements of
The share of world trade in each of these can be found in the ideologies
manufactured goods of the 102 poorest and practices of companies as well as
countries of the world is falling as the share governments. Representing the
of the three regions of the Triad increases. integrationists are the liberal international
There is a ‘de-linking’ of the less from the organisation such as the IMF, World Bank,
more developed world, particularly in Africa. World Trade Organisation and OECD, who
The Triad seem to be composing the core of stress the inevitability of further globalization
an increasingly globally integrated world and the significance of the role of
economy from which the countries outside international agencies in fostering
the Triad blocs are excluded. One can only understanding and agreement. In the
speculate on the political consequences of isolation wing are those people who yearn for
such a new global division: they are unlikely the days of national self-sufficiency and
to be integrative for the world system as a international trade supremacy. Among the
whole (Petrella, 1996:80-1). optimists are those such as Kenichi Ohmae
The cultural implications of economic (1990) and the Economist, seduced by the
analysis remain somewhat underdeveloped. opportunities of winner-take-all global
Attitudes toward the overwhelming political markets, if only free trade can become a
and economic forces for globalization range reality. Finally there are those, including
from enthusiastic integration, to determined political bodies such as the European
isolation, and from a belief that the free Community, and some businesses, that
market will resolve all resulting tensions, to a acknowledge the irresistible force and many
commitment for comprehensive social, attractions of further globalization but insist
economic and environmental regulation. A on a considered range of regulation to
motley collection of “new right” actors, sustain communities, economies and the
including the anti-globalization political environment against the most damaging
parties, such as in Australia, the Hanson One effects of globalization. It is this response to
Nation Party, or the Buchanan wing of the globalization that we find the most
republicans in the US, are in part founded on acceptable basis for dealing with the most
the spatializing and moralizing effects of profound economic and political phenomenon
fragmenting political identities. Ethnically at the turn of the millennium. That is
distinct identities can be denounced and recognising the significance of enhanced
marginalized as belonging to people who international opportunities involves improving
deny the majority of “ordinary people” their investment in internal and collaborative
rights (those who do not share their identity research and development, investing in
but share some other xenophobic conception human capital, and ensuring world class
of “national” identity) – to the surplus, relief, processes and state-of-the-art products and

services in order to compete. But also these Friedman, M. (1962) Capitalism and
new international opportunities bring new Freedom, Chicago: University of Chicago
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Soros, who more than anyone is an Helvacioglu B. (2000) “Globalization in the
unequivocal winner from globalization, fears neighbourhood: From the Nation-State to
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precedence over particular interests, our Hirst, P and Thompson, G. (1996)
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such an outcome may be the ultimate Hu, Y-S. (1992) ‘Global or stateless
challenge for globalization. corporations are national firms with
international operations’, California
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Markoff, J. (1999) “Globalization and the
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i
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and 1990s.

Globalization's Impact on Workers and Nations

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ISSN 1679-1827

Volume 1, Número 1, Janeiro/Junho 2003

THEORIZING “GLOBALIZATION” SOCIOLOGICALLY FOR MANAGEMENT

PROGRAMA DE PÓS-GRADUAÇÃO EM ADMINISTRAÇÃO

Globalization: ‘tendencies to a worldwide reach, impact, or connectedness of social

Therborn (2000b, 154)

Therborn, (2000a, 149)

Soros, (1997: 45, 48)

6 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 7

regional players emerging in Latin America, globalization thesis it is such phenomena as

8 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Figure 1 - The Structural Relativization of Globalization

National World system

Each arrow represents an aspect of relativism and tension to the settlement of

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 9

Figure 2 - The Organizational Relativization of Globalization

National societies World system of

These organizational circuits may trade. A single centre of calculation

10 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 11

Table 1 - Concepts of Globalization in the Organization of Production and

Concept Category Main Elements/Processes

their technological and organizational

12 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Industrial globalization is changing spreading of risk, increasing the diversity of

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 13

Globalization of Markets and Strategies Developing countries are becoming

14 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 15

16 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

1970s onwards, to a global regime dominated supporting intermediaries who deliver

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 17

to move across national boundaries if the government of the territories in which it

18 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 19

20 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 21

22 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

though that most jobs are still in non-

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 23

24 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br 25

Sklair L. (1999) “Competing conceptions of

26 Gestão.Org, v.1, n. 1, p. 5-26, jan./jun. 2003 www.gestaoorg.dca.ufpe.br

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