by Sigalit Hoffman
Concordia professors are eager to embrace the inevitable. International
business professor Ramdas Chandra believes that while globalization is
a certainty, it may also raise the standard of living of developing countries.
Theres no way around it, Chandra said. What happens
in Japan affects you in Canada.
Professor Chandra explained that the presence of multinational companies
have changed the way businesses compete. They have broadened the sphere
of competition, and put less efficient companies in danger of being undercut
and forced out of the market.
Globalization can be a blessing to developing countries. In the
short run, economic growth deals with poverty, and brings in new technology,
Chandra said. Although he said its likely that Western companies
will make inroads into developing countries as part of this trend, he
did not foresee foreign companies threatening local businesses.
Local companies will respond, he said. They will become
more effective, more able to compete. For example, Latin American
car manufacturers have continued to be successful despite GM plants like
the one in Brazil.
In some cases, local companies will be at an advantage. The Caribbean
tourism industry is one such example.
Concordia business strategist Mick Carney thinks that globalization will
allow countries to capitalize on their strong points.
Where theres globalization, countries must decide where they
do well, where their natural skills are, Professor Carney said.
Canada excels in telecommunications and in manufacturing winter boots.
Globalization will make it easier to export these products, and will result
in customers getting better products at better prices.
Not only do industries stand to gain from globalization, Carney believes
that companies are in danger of losing by not becoming multinational.
Since the aviation industry has remained nationally based, a country
that doesnt have a good airline is stuck with it.
Chandra pointed to the saturation of domestic markets and the opening
up of markets like India and China as the two major causes of globalization.
Thanks to new communications technology, citizens of developing countries
have seen and sought the industrialized worlds standard of living.
They want this lifestyle. They want the luxuries that the average
North American has, Chandra said.
Globalization is the result of a worldwide adoption of a capitalist social
structure. There have been two experiments, he said, capitalism and communism.
It seems that the capitalist model has won out, he said, and
cited vast amount of empirical evidence that links free markets with economic
Before globalization can benefit developing countries in the long-term,
Chandra warned that there must first be a stable political system in place.
In the long run, unless there are legal systems, there wont
be too much benefit to the larger population.
Carney pointed out that sometimes, companies in developing countries do
not want to conform to international working standards. Although the furniture
manufacturer Ikea does not sell products made by child labour, these standards
have been difficult to enforce in their Indian plants. Carney said that
the local governments sometimes side with local businesses that try to
break the rules.
Chandra believes the entry of multinational companies has threatened local
identity, and insisted that governments institutionalize the protection
of local identity.
Carney disagreed. He predicted consumers will guard their identity by
distinguishing between cultural and consumer goods. People still
prefer their news from a Canadian company, not Ted Turners CNN.
They dont care where their stereo is made.
This is the second in a series of articles about the issue of globalization
from the perspective of Concordia professors and students.