What is Globalization?

International management: la figura del
laureato in lingue nel contesto
dell'economia globale
Lorenzo Gui, VIU
Temi che tratteremo:
– Introduzione all’economia globale: le
nuove economie emergenti.
– La gestione delle imprese globali.
– Il made in Italy e i distretti di fronte
alla sfida della globalizzazione.
– Il ruolo che delle figure professionali
laureate in lingue nelle aziende.
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Internationalization and Globalization:
a new geo-economy
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What is Globalization?
• The integration of economic, political, and cultural
systems across the globe
• "A social process in which the constraints of
geography on social and cultural arrangements
recede and in which people become increasingly
aware that they are receding [Malcolm Waters]
• “The diminution or elimination of state-enforced
restrictions on exchanges across borders and the
increasingly integrated and complex global system
of production and exchange that has emerged as a
result.“ [Tom G. Palmer]
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A new geo-economy?
• The internationalization of economic
activities is nothing new
but
• until very recently (the 1950’s), in terms
of production, plant, firm and industry
were essentially national phenomena.
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Internationalization vs Globalization
• Internationalization processes involve the
simple extension of economic activities
across national boundaries (quantitative
process)
• Globalization processes involve also the
functional integration of internationally
dispersed activities (qualitatively different)
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Core and Periphery
• In 1945, 71% of world manufacturing
production was concentrated in just 4
countries and almost 90% in 11
countries.
• The group of core industrial countries
sold 2/3 of its manufactured export to the
periphery and absorbed 4/5 of the
priphery’s primary products.
• Things changed a lot!!
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Recent changes in globalization, particularly industrial growth in
developing countries, is challenging this representation.
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A qualitatively new integration
• International economic integration until
the 1950’ manifested through arm’s
length trade in goods and services and
international movement of capital:
SHALLOW INTEGRATION
• Today, integration organized by TNCs;
cross-border value adding activities
within firms increasingly influence
linkages between national economies:
DEEP INTEGRATION
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Integration of trade and disintegration of production:
• Fragmentation of production, i.e. division of
production stages among suppliers located in
different countries.
• Larger participation of developing country firms in
the global economy (about 40% of world trade in
parts and components)
• Role of intermediary (e.g. Retailers, Branded
Marketers, etc.) in structuring global production
chains and facilitating global matching
• “New” players and lead firms, that sell final products
and set production standards for "lesser" producers.
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In your dishwasher…
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Supporting Evidence
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Strategies and Advantages
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Comparative advantage
• Opportunity cost or economic
opportunity loss is the value of the next
best alternative foregone as the result of
making a decision.
• Comparative advantage refers to the
ability of a person or a country to
produce a particular good at a lower
opportunity cost than another person or
country.
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Competitive advantage
• Competitive advantage is a position a
firm occupies against its competitors.
• Firms have a competitive advantage
over rivals when organisation and
managerial processes, position and
technology competencies (skills) give
them superior value creating processes
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Location and the Value Chain:
Offshoring (and Outsourcing)
• Is the firm’s competitive advantage
based on firm-specific or country-specific
resources (comparative advantage)?
• How great are the coordination and
learning benefits from co-locating
activities according to firm’s business
strategy?
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Value chain…individual functions become separable
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Activities can then be located anywhere in the world
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Porter’s national diamond framework
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How we compete in a global economy?
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The traditional view of global advantage
• “Projecting”: leading from the strength of
the home base and seeking new market
potential and cost advantage abroad
• Glocal strategies: think global, act local
(adapt)
• Globalization means “teaching the world”
your home winning model
• But is local adaptation relevant only
locally?
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Penetrating new markets or learning
from the world?
• Competitive advantage is primarily
based on knowledge
• Not all the knowledge a global company
needs to prosper is to be found in one
place
• The cost of distance is falling rapidly
• Metanational:
build a new kind of competitive
advantage by discovering, accessing,
mobilizing, and leveraging knowledge
from many locations around the world.
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Think Local, Act Global
• Maximize the local distinctive
contribution to the overall goal of
leveraging innovations globally
• Use the comparative advantage of your
location to build and improve some
unique operational competence
• Squeeze distinctiveness out of local
environment
• Be proud of local capabilities, but be also
committed to the global cause
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New frontiers in international strategy
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Semiglobalization and strategy
• Semiglobalization: this structural condition of
intermediate levels of international integration
affords room for international business strategy
• Importance of location specificity and business
specificity: International Corporate Strategy
• Why countries or locations differ? (CAGE
framework)
• Ecology of firms and locations need to be looked
at from specific industry persprctives (arbitrage
strategies)
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Geography of Italian productive
districts
(Source: Istat, 1997)
Local Systems: 199
Manufacturing firms: 224.368
Employees: 2.173.801 (43,7%)
Share of export (1998): 100 Bln
€ (45,8%)
(Source: Centro Studi Banca d’Italia, 2000)
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International Careers
• Posts in an export department (export manager)
• Marketing department (sales, advertisements)
• Purchase department
• Contracts managers (off-shoring management)
• Public relations and translators
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Rare Skills
• Ability to negotiate, (flexibility) to go abroad, and fix
a complex deal
• Technological skills
• Management, marketing and economic knowledge
• Some knowledge of international business
• Foreign languages
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Promozione del Made in Italy nei mercati internazionali
L’export manager è la persona che cura le vendite all’estero di
un’azienda.
E’ suo compito conoscere i mercati nei quali andrà ad operare,
sviluppare i contatti dell’azienda con clienti o potenziali clienti e
documentarsi sugli strumenti che possono sostenere o agevolare le
esportazioni dell’azienda.
Per questa sua proiezione verso l’estero è estremamente importante
una buona conoscenza delle principali lingue dei mercati nei
quali andrà ad operare, spiccate doti di adattamento e di
flessibilità, la conoscenza del prodotto, la conoscenza di Paesi e
culture ed anche una buona capacità di negoziazione.
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