Globalization and Internal Organizational Responses

Abstract

The most powerful forces affecting the world economic system today are summarized under the rubric of globalization. The primary antecedent of globalization is the rapid transferability of capital and information across national boundaries facilitated by technological advances in communication and transportation. This allows the owners of capital to be constantly informed of changes in market factors and to quickly transfer their capital investments to areas that provide the greatest marginal returns on their investment (McMichael 1996). It allows them to decouple their organizations so that specific functions can be performed in the location that offers the best service for the price. Thus an organization may have its accounting division (or contracted accounting services) located in India or Ireland, research functions in Germany, parts production in the U.S., assembly in Poland or Thailand, and markets world wide. At the same time, customers worldwide are similarly affected by the nearly ubiquitous global information system resulting in an escalation of their expectations regarding product quality, variety and customization. As businesses from different countries compete with each other in markets that only local companies used to serve, workers and communities find themselves forced to compete against each other to create a "business friendly climate." The reason workers and communities are involved in the