Organizational incentives in the globalization process.
Cercel, Mihai Ovidiu
The majority of specialists consider that, after the 1980s,
sometimes, in an aggressive manner, there were strong incentives of
change and restructuring of the international system, through the
development of geopolitics, of economy and of financial flows. The
increase of a state power and its tendency to control its international
relations constitutes itself into a complex action and counteraction,
more often than not, a process of redefining its expansion and its ever
increasing costs, and into a social organization that can determine the
economic surplus and its transfer modalities in the context of
globalization. Under these circumstances, a plurality of forces and
motivations results into new social, economic and political interaction
patterns, both at the national and international level. Rosabeth Moss
Kanter from 'Harvard Business School' believes that
"without any doubt, globalization is one of the most powerful and
universal influences over nations, business affairs, workplaces,
communities and lives at the end of the 20th century" (1); these
considerations are valid, considering that the whole planet, by its more
and more complex relations, has already witnessed a new era, that of
cultural harmonisation, of general commercialism and of savage
consumption. We witness a replacement of former empires by the empire of
the market economy, underlying a global economic and political
organization because, as Adams Brooks comments in his work The Law of
Civilization and Decay, the great changes in the field of commerce, and
also the new and modern commercial roads continue to be the secret of
and even the key to history. Namely, anytime, any empire rises again
under different conditions and realities, with other rulers, and thus,
the cycle starts again, on complex coordinates and for complex reasons,
as "the existent relations are tense and practically, everybody has
to start new relationships with social systems that become more and more
diverse and, consequently, divided." (2)
This statement is true because nowadays, both the extension of the
global market economy and the consolidation of the political influence
determine, more consistently than ever, the repositioning of the global
market economy, and also of the military power, the one that can dictate
a certain type of competitiveness, which powers advanced technologies
and more and more capital investment in the assertion of the dominant
power.
The diversity, imprecision and inconsistency in the defining of
globalization have complicated the evaluation and generalization of its
effects, there being opinions in favour or against it, especially fears
about the present and even more, about the future of the economic
expansion process, of the cultural and political expansion process, as
is known that globalization threatens even democracy, annuls the local
autonomy and specificities, national traditions and spirituality. At the
end of this century, there are "many social and political problems
that are extremely serious, and in order to solve, or at least to tone
them down, there are changes that must be made at the level of political
action. But to accuse globalization and to wish for its disappearance
does not solve anything, while the adoption of new national and regional
policies could help the poor and the disinherited." (3)
Robert Gilpin considers that the in-depth changes in the field of
international relations, and also the new forms of expansion, the
economic being at the core, still continue to ensure, at present, the
succession of hegemonies, as there are states that impose prices and
actions, attitudes and force, the balancing of power being imperative,
through economic, technical factors, resources, communication, in order
optimise costs and profits.
A number of specialists believe that, through globalization, a
certain hierarchy is established in the international economic and
political system, that some states will be sent to the periphery, while
others, on the contrary, will gain ascendancy, as CMN (multinational
corporations) and the excessive international trade will cause sharp
inequalities among states. Other economic analysts hold a different
point of view--those countries that export the process of globalization
are also subject to some processes of general profits degradation, and
it is only by carrying out business operations at the international
level that huge profits are obtained, those powerful multinational
businesses and companies will definitely consolidate their corporate
force, both at the national and international level.
The globalization of business operations was obvious during the
last decades of the past century, as it was mainly realised by CMNs, by
a complex and constant process of transnationalization, in which the
networks of global business operations took part, along with their
subordinate branches and firms. In a productive diversity of
organization forms, the target markets in the developing countries were
identified, then the modalities of business implementation, their
sources of support, the possibilities to penetrate the political and
consumption area. There were cases when the global networks of
production and distribution were reorganized according to certain
national barriers and demands, by offering considerable autonomy and
advantages of integration in the transnational production systems. For
example, in Romania, the Coca-Cola Company obtained different primary
advantages regarding locations, exemption from taxes, the same as other
firms that received financial aid from the Romanian state, with a view
to creating jobs and to ensure substantial production on the Romanian
soil: Ford is one of the companies which, in its position of strategic
investor, imposed all sorts of privileges on our country: financial aid,
plots of land for the collateral production, a special road for the
transport of the vehicles produced at the Craiova factory, tax
reductions, rescheduling of payments and interest etc. Another challenge
of business globalization is represented by the real investment in the
area of production and services. Investment was not always as high as
stipulated in contracts, as all types of excuses were put forward, some
of them fictitious, others partly real: a lack of proficiency, the
existing stocks, the economic and financial crisis, a lack of
specialists.
But there are also companies, unfortunately only a small number of
them, which, by restructuring and rationalizing their corporatist
activities, have managed to remove commercial barriers and financial
difficulties, establishing themselves on different international
markets. If, years ago, the Japanese automobile companies dominated the
American market, nowadays, the Mioveni factory has a destination of
products in states with a time-honoured tradition in this respect:
Germany, France, Spain. Thus, in a free global economy, certain CMNs
connected their national economic performance with the competitive
performance on world markets, both by increasing production and by
modernizing their own products, higher in quality compared to these.
Other studies pointed out that the exports of these companies acquired a
higher share, even in difficult economic conditions, like, for example,
the global financial crisis, which did not trigger the decrease or
stagnation of production, like in other countries but, on the contrary,
diversified it, by producing more for exports.
In the case of multinational companies, another type of behaviour
is observable when profits and exports increase, while the state shows a
much lower rate regarding the national economic performance.
Hyperglobalists point out and praise the fact that CMNs favour a
borderless, solid economy, as the role of the state is diminished in the
problems of its own economy, there being a confrontation between the
corporate power and the state power, which will generate a zero sum of
power. On the contrary, other voices consider that globalization and the
transnationalization of business affairs display the redundant character
of independence in some states; they consider that the balance of power
will shift against CMNs, but they accept the paramount importance of
investment and of technology transfers as fundamental landmarks in the
present global system.
"However, CMNs constitute the main axis of the contemporary
global economy. Around 53.000 CMNs generate at least 20% (30%, according
to others) of the global production (Dunning, 1993b, p. 14; Strange,
1996, p. 47; Tezzaton et al., 1997; UNCTA D., 1998). Despite the
regional concentration of production, international business networks
comprise the three central regions of the global economy, by linking the
destinies of communities and nations in complex networks of
interconnections. In opposition to what sceptics maintain, CMNs are not
only "national companies with international activities" and,
as hyperglobalists comment, neither are they "corporations
unleashed", which cross the globe in search of maximum profits
(Hie, 1992; Reich, 1991). In fact, CMNs play a much more important role
in the functioning of the global economy than they did in the past, and
they have a crucial role in the organization of extensive and intensive
coordinated transnational networks of production and distribution, which
are historically unique. CMNs and global networks of production are
fundamental for the organization, placement and distribution of
productive power in the corporate global economy." (4)
If the most obvious effect of globalization is represented by the
prevalence of the market over the nation-state, and partly, by the
diminishing of the national economic sovereignty, and the erosion of
state borders, specialists claim that the "supremacy of the market
over the state, and of economy over politics", by assigning
definite meanings to this process: "the downward race and the end
of national sovereignty, the loss of national autonomy and of control
over the economy, the promotion of high technology in diverse
geographies, the decrease of welfare, the cheap labour force, the
national, social and political disintegration etc. There arises the
simple question whether globalization represents a solution both to the
rich countries and to the states undergoing the democratization process;
whether it imposes the positive significations of a complex process of
emancipation in all aspects or, on the contrary, it puts downward
pressure on ailing economies.
In a global market, and one that smoothens financial flows, due to
the integration of national economies and of international competition,
the stating of the globalization consequences continues to be
incomplete, therefore increasing more and more the specialists'
efforts to define and interpret this extremely complex phenomenon.
References:
(1) Niculescu, Simona Mirela (2001). Relatii publice internationale
in contextul globalizarii. Bucharest: Comunicare.ro, p. 12.
(2) Kruckebug, D. (1995). "The Challenge for Public Relations
in the Era of Globalization", in Public Relations Quarterly 40(4)
1995, p. 37.
(3) Gilpin, Robert (2004). Economia mondiala a secolului XXI.
Provocarea capitalismului global. Iasi: Polirom, p.223.
(4) Held, David; McGrew, Anthony; Goldblatt, David; Perraton,
Jonathan (2004). Transformari globale. Politica, economie si cultura.
Polirom, p.325.
Mihai Ovidiu CERCEL
University of Craiova, Faculty of Economics and
Bussiness Administration, Craiova, Romania.
Email: mihai.cercel@dae.gov.ro
