Globalization Matters

Steve Baker via Compfight

Globalization and its Disconnects 

I continue to make a case for recognizing the complex, dynamic and evolving reality of international business, based on my academic and research background that focuses on exploring the paradoxes of globalization and how that impacts individuals, societies and organizations around the world. Here, I would like to focus upon leadership, while explaining the context within which we operate- i.e. globalization which has a direct influence on everything we do and consider. In my work, I merge the ideas of globalization and leadership to describe the immense responsibility that leaders face today for a better tomorrow for people, communities and the entire planet. Elsewhere, I use the global context to argue for leadership approaches that focus on developing a more responsible and humanistic understanding of organizing and leading, which may require paradigm shifts but I believe these approaches hold promise (please refer to my work on responsible and humanistic leadership).

Let me begin by offering the context within which my research is laid out and why I think globalization and its disconnects matter in discussing leadership.

Although roots of globalization can be traced back to the 10th century (or even earlier), it is its unprecedented growth and rapid technological advancements, in the past few decades, which have made globalization a popular concept. Globalization has many definitions, but if one were to ascribe one-word meaning to the concept of globalization, a majority would agree with me in choosing ‘inter-dependence’ as its simplest meaning. Globalization and inter-dependence have become synonymous in many circles. It is true we are more connected than ever. We are increasingly mobile- thanks to the Internet- Facebook and alike. Paddy Ashdown, a veteran British diplomat, summed up this interdependence as, “Today, everything is connected to everything else. We are now interdependent. We are now interlocked as nations, as individuals, in a way which has never been the case before.” (Mutual Responsibility, 2017)

However, the idea of globalization has also evolved. What started out as sweeping and unprecedented phenomenon has mellowed over time and morphed into regional, and gated (The Economist 2010; The Economist, 2012). Osland (2003) argues that many business organizations may “accept globalization as a fait accompli whose presence and benefits are largely unquestioned” (p. 138). But in other circles, globalization has become more of a controversial topic, as evidenced by protests around the world, including Korea, France, Indonesia, Canada, and USA. In addition, a growing number of respected economists, sociologists, and political scientists have started to vehemently criticize the current practice of globalization. While some may wonder why- because globalization did (after all) connect us and created a larger middle class in many emerging countries. However, others contend that it has widened gaps between “haves” and “have-nots” – or winners and losers of globalization. Branko Milanovic in his new book entitled, “Global inequality: a new approach to the age of globalization” offers an explanation. Looking at the income levels between 1988 and 2008, he demonstrates that among the big winners were the world tycoons, merely 1% with more than 99% of the world’s wealth, and the middle class in newly emerging economies. However, among the big losers – or those who gained little or nothing – were those at the bottom, and the middle working classes in the developed countries. This odd distribution of income has been referred to as the elephant curve. Stiglitz (2016) has argued that the current phase of globalization may not be the only reason for this widening gap, but it is one of the major reasons.

Emphasizing the ‘social’ in global
I want to make two observations about globalization here. First, it is proven itself to be paradoxical in many ways. For example, while globalization connected us (and in many ways, made us interdependent), it has also been driving us apart. Second, globalization is an inter-disciplinary concept that is multi-dimensional in its nature and impact. How? Let me explain in simple terms:

1. Globalization has its economics, in terms of changing income levels, trade surpluses or deficits etc. Economics is the ‘global’ in the idea of globalization and most often addresses convergence.
2. It influences and is influenced by the political discourse, which is very local. Oftentimes, politics has taken a center stage around the world, thereby emphasizing divergence or even parallel trends.
3. Finally and most importantly, globalization relates to the individual and the societies they form. This is its social side. Khilji (2016) argues that globalization, by reducing boundaries and increasing global mobility, has brought about major cultural shifts. However, it is still the case that, while many scholars and practitioners have paid most attention to the economics and politics of globalization, social aspects of globalization, in comparison, have received scant attention.

Unfortunately, the result of a fragmented view of globalization (where some have focused on the global economics and others – may be- on the local politics) is that we have not completely understood globalization’s deep impact. By isolating local from the global- or convergence from divergence, we have ended up heightening dissatisfaction among the general public. Interestingly, while we described it as a concept that brings inter-dependence, we have failed at adequately connecting the many dimensions of its diverse impact.

As I said before, levels of inequalities have grown globally, and the gaps between rich and the poor have resulted in a global backlash, in terms of protests and varying degrees of nationalistic political discourse around the world. Contractor (2017) believes we have been witnessing an “our country first” mentality displaying skepticism or outright hostility toward globalization. Let us look at the United States as an example. Khilji, in an article published in 2016, argues that the recent angry political rhetoric in the US can be attributed to economic erosion in the rust belt (mentioned by Milanovich) as well as cultural shifts. She (and many others) note the rising levels of values-differences within US, where a predominantly younger, affluent and more educated population in cosmopolitan cities has transitioned towards progressive values, favoring social responsibility, human rights, inclusion, and gender egalitarianism. This urban cultural shift has prompted a backlash, especially from the white, uneducated, low skilled and the older generation in depressed and homogenously white cities. Khilji argues that the fear of becoming a minority (from a majority), or what has been referred to as the white identity crisis, has been aggravating and may have contributed to the current political rhetoric in the United States. The situation is no different in other developed countries, including the UK (as seen in Brexit), Spain (as seen in Catalonia) and France (as witnessed in their recent election campaign). We have also been witnessing rise of extremism in other countries around the world for many years now. Let me explain the basis of this populism on cultural changes- their convergence and divergence, to highlight importance of social aspects of globalization further.

Highlighting ‘within country’ difference
In the past few decades, globalization and technological advancements have brought about many cultural and value changes, leading politicians, economists, businesses and sociologists around the world to debate the question of “value change” with fervor. Overall, we have witnessed the growing impact of the western values globally (or convergence). At the same time, we have debated the enduring influence of local cultural values worldwide (i.e. divergence) as well as the emergence of global cultures. While, scholars and practitioners primarily focused on value changes and shifts across nations in analyses, relatively little attention, has been paid to value differences within countries. For example, while NY City, Washington DC, and Tokyo may have appeared to be globalizing, smaller segments within these bigger cities or other smaller cities, in fact, stayed in the shadows. Gradually, cities and communities started growing apart. Over the course of time, we (as management scholars) concluded that societies change the way they want to and at a pace that in unique to them (thus establishing the idea of crossvergence). True. However, we mostly adopted an outside perspective and viewed cultural change as broad and macro phenomenon- thereby neglecting the within-country differences, which continued to widen. For example, if you think about the American culture and how it has evolved for the past few decades, it is important take generations, educational levels, gender, race, Midwest, East coast, West coast and Southern states into account?

Based upon my research and observations, I believe that we can identify at least four cultural groups at the global level (Khilji, 2017). These groups highlight the “within country’ differences that I have just mentioned- and are very relevant to the overall divergence, convergence and crossvergence debate. Quite paradoxically, these cultural groups are also illustrative of what we consider to be the ‘irreversible’ impact of globalization. Distinct value systems of each group clearly demonstrate existence of tensions within countries, which have begun to play out in politics and economics quite significantly:

1. The first cultural group, which I refer to as the Global Elite, is the highly skilled and educated individuals who are globally mobile. They are global citizens, partake in the knowledge transfer globally and contribute to the phenomenon of brain circulation. They are advocates of integration of worldwide markets. Research indicates they have financially, intellectually and culturally benefitted from the recent phase of globalization.
2. I refer to the second group as the Global Eager. These are the growing middle-class mostly in emerging economies, which has also benefitted financially from the globalization. Their standard of living has been raised. They aspire to continue to advance their skills and raise healthy progressive families.
3.  I refer to the third group as the Global Angry. These individuals have lost their jobs to low-wage workers elsewhere and are feeling lost. They may also be angry because of loss of their identity and ways of living. Milanovich’s (2016) elephant curve clearly identifies this group.
4. I refer to the final group as the Global Neglected. These are the poorest of the poor, living below US$ 1 a day. Although globalization promised to lift these people out of poverty but has failed to do so. They are also referred to as the BoP communities.

The rise of populism is fueled by the global angry (for example) in France, and USA as elsewhere. Their expectations, experiences and values appear to be in direct contrast to those of the global elites in their own countries. I believe it is disconnects among these groups that has been fueling internal tensions, influencing policies, moving politics and making headlines. What is interesting that the global angry in USA may have a lot more in common with the global angry in Russia and Saudi Arabia. I think this commonality is worth making a note of- because journalists, oftentimes, highlight a very angry anti-global and anti-all-other sort of rhetoric from them.

A complete version of this paper was used as a keynote address at a conference in Spring 2018. For full paper, please contact sekhilji@gwu.edu