Jeffrey Hoyle

Globalization is a “hot” topic and tends to evoke strong emotions because of its association with issues, from outsourcing of jobs to human rights violations (Burnham, 2001; Cohen, 2004). In reality, the phenomenon of globalization is the result of improvements in technology (Eighengreen, 2001; Clarke, 2001; Marx, 1967), education (McLaren, 2003), logistics (Eighengreen, 2001; Foster, 2002), and entrepreneurship (Buchanan & Yoon, 2002; Foster, 2002; Franko, 2003; Parrnrin, 2004; Weber, 1930), which have brought all societies of the world closer together, whether intentionally or not.

What Does Globalization Hold in Store for the United States?

In 2004 The Wall Street Journal published nine articles in a series titled “Power and peril: America’s supremacy and its limits.” Current experts (e.g., Higgins, 2004; Wallerstein, 2002) suggest that the United States is in a crucial period of its history, like nothing it has previously encountered.

Dislike of the United States around the world, in part because of its great wealth, is not a new phenomenon, but the overt terrorism directed at the United States from many fronts is new. Domestic and international opponents question the motives of the United States in regions such as Iraq, Afghanistan, North Korea, China, and Southeast Asia.

Are Human Rights, Corporate Profits, or U.S. Jobs the Real Issue?

As the last military superpower, the United States has responsibilities to the world and to America’s domestic policy—but what are they? Some researchers (Eighengreen, 2001; Foster, 2001; Wallerstein, 2002) indicate the United States has actually missed its opportunity to capture the benefits of globalization and must instead work on a transition plan to move from its position as a leading nation to take on a secondary role in the new world order. Along these lines, researchers (Paranrin, 2004; Wallerstein, 2002) suggest that the historical records of past civilizations show that such a move is the only logical course.

Opportunity for New Relationships

A system to monitor economic, technological, judicial, and political activity in relation to U.S. domestic and international commerce seems to be what the current research (Foster, 2001; Cohen, 2004) supports as a necessity in this critical period for the United States. Policy-makers will need to form effective ways to cooperate in the global community.

One approach is to develop a task force of wise and impartial leaders to develop equitable strategies in global public policy-making. In addition to conducting activities, such as global demographic analysis to aid in market segmentation strategies, this body will need to address short-term job protectionism, the Tobin tax, and the merits of Millennium Challenge Accounts (MCA).

The Tobin tax “in theory, would encourage positive market growth via globalization while eliminating unproductive speculation in worldwide financial markets” (Hoyle, 2005, p. 43) and thus encourage long-term global investment decisions that leverage a region’s comparative advantage (Ricardo, 1962).

MCAs were developed by the United States “ to provide assistance to 79 of the world’s poorest countries—many of which have been often equated with the term ‘failed states’—so that they may reap the benefits of neoliberal-led globalization” (Soederberg, 2004, p. 280).

Both the Tobin tax and MCAs must be presented to the task force to evaluate the international impacts and to ensure these initiatives contribute to global improvements and do not benefit the United States only. Higgins (2004) illustrates the urgency of such a plan and concludes:

The way America interacts with other nations is more tangled, and crucial to ordinary Americans, than at perhaps any other time since the Cold War. A war on terrorism pits the U.S. against zealots with tentacles in the Mideast, Europe, Asia and Africa. The Bush administration is embroiled in difficult nation-building in Afghanistan and Iraq, and facing urgent issues of when to turn over power to Iraqis and how. Even spheres once thought largely domestic, such as the economy and jobs, are even more international as business globalizes and big players such as China and India loom. (p. 2)

Moving from Short-Term to Long-Term Goals

In the competitive global arena, the United States needs to consider a shift from its short-term focus of domestic job protectionism to a long-term approach of negotiating candidly with major U.S. labor unions regarding the new reality of the global marketplace. The global concentration matrix created by Ghemawat and Ghadar (2000) is an excellent application of new research to global policy-making. “This innovative global concentration matrix compares two key factors: (a) the probability of industry global concentration, and (b) a comprehensive global consolidation strategy. This matrix has the potential to allow managers to evaluate global consolidation and to make the best long-term merger and acquisition decisions” (Hoyle, 2005, p. 13).

The Global Concentration Matrix

The matrix has the potential to support small entrepreneurial business policies that otherwise have not been considered because of the perception of the invincibility of major transnational corporations. With a renewed entrepreneurial marketing spirit in the United States, the future of the U.S. role in the global community may be assured.

Innovative Systems of Governance

Although the concept of global cooperation may seem utopian (Patomaki, 2000), an international plan needs to be put into place to ensure that globalization is positioned for positive outcomes. This plan can succeed only if all the world leaders seek input from their citizens on the pros and cons of global cooperation and, in turn, have the ability to take this input to an impartial global “court of appeals,” where all opinions are heard and given equal weight before any policies regarding economics, technology, political structure, and judicial systems are adopted and implemented.

Court of Appeals

This court could tackle issues such as international labor relations, global business mergers and acquisitions, an international judicial system, international taxation, and global governance. These areas need to be especially addressed in a global context because they all have the potential either to improve the equality, wealth, and health of the global population or to create a global society of oppression, poverty, and disease.

Change in International Trade Policies

The introduction of an international free trade policy with reduced government involvement will most likely require some major industries, such as the automobile industry, to relocate, in part or whole, to other regions of the world, to capture the maximum competitive advantage, at the same time as the United States creates opportunities for new skills and education for its workforce.

Impact of Changes

Changes of this magnitude would be difficult initially, but, in the long run, would help focus the United States and the world on making decisions that contribute to “the greater good.” However, as long-term decisions begin to be the norm, short-term profits become harder to achieve. Some organizations and individuals may try to find a way to undermine the process, in order to profit from the shift without sharing in the development of the process.

Next Steps

The next critical step in understanding the impact of globalization on U.S. commerce is to apply these research findings to specific organizations in the United States and observe their performance as measured by specific metrics. In the long run, an organization increases its chances of success in the global marketplace when it takes the time to (a) determine its comparative advantage (Buchanan & Yoon, 2002; Ricardo, 1962), (b) determine a positive work environment that benefits labor, management, and customers (Barrera, 2001; Ricardo, 1962; Smith, 1909), and (c) encourage constant innovation (Bhagwati, 2004; Petty, 2005).

Conclusions

Recognizing diverse approaches to societal change is an attempt to illustrate the complex nature of society and a way to pursue truth and avoid as many “slips and errors” (Khaldun, 1958, p.15) as possible. In the final analysis, it is not necessary to determine which of the proposed causes of globalization will eventually be proven most accurate. Each is important to understand in order to (a) anticipate the problems and opportunities globalization will cause and (b) establish policies that will allow these issues to be resolved.

These issues require developing a plan to optimize the opportunities and minimize the challenges of globalization. That will take a sincere and deliberate multipartisan effort by all nations. Innovative minds from all schools of thought and areas of the world are required to embrace situations never before contemplated and solutions previously unimaginable.

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