Globalization – A Changing Context

Globalization refers to a process of increased interconnectivity between people around the world. This interconnectivity creates greater interdependence, with this global interdependence then forming the foundations to some form of global organization. As such globalization should be understood not simply as increased connectivity but ultimately refer instead to the formation of a global system of organization. Once this global interdependence has emerged the question then inevitably turns to how to manage this combined organization, what are the rules for this new level of organization? What principles are these rules based upon and who gets to make them? This is clearly going to be a very contentious issue. The central challenge of globalization today is, though, the formation of some form of institutional structure for the management of this global system of organization that has emerged.

In the absence of a compelling and unified vision for the development of a global system of organization its development has been driven by the local incentives of individual people, organizations, and nations. With some of those individuals and organizations perceiving benefits from it, while others see threats, the result being a heated debate about the winners and losers and competition over the perceived division of the pie. Globalization may represent a millennia old abstract evolution in the complexity of our systems of organization and such an evolution can not be said to be good or bad – evolution is simply a process that generates new levels of complexity – however that process of evolution can be managed and developed in an effective way, or in an ineffective way. Thus it is not for us to debate whether the process of globalization is good or bad, but it is up for debate how that process is managed. Often this management process has been distorted around those with the power to guide it towards advancing their interests at the expense of others, and this story has marred the development of the process of globalization to date.

The result is that the rules that have been written for the development of globalization over the past few decades have been undemocratic and distorted along many dimensions, both social, economic and environmental. This remains a critical challenge facing the development of the global economy today. A central component of this challenge of global governance is the issue of the complexity of these global systems that need managing. The process of globalization refers to the ongoing evolution of a new, more complex level of socio- economic organization on a global level, one that transcends our existing national institutional framework. Existing Industrial Age management theory and methods that worked well at the lower level of complexity of the nation state – where we created the centralized bureaucratic organs of the modern welfare government – are not sufficed for the more complex level of the global environment. The global systems of organization that make up globalization operate on a different set of principles to that of the territorial state. Instead of being about independent nations and cultures they are about the interdependence between people. Instead of being based on a well-bounded system of organization it is about open global networks. Instead of being static it is about dynamic change. This change in the nature of the organization due to its increased complexity requires, in turn, new approaches to its management that are aligned with these features. An approach that works with these new dynamics not against them, to enable the new set of possibilities that are engendered in this new form of organization we are currently developing around the planet.

This paper presents an analysis of the current stage in the process of globalization, the most salient challenges that it presents and various potential solutions to these challenges based on complex systems theory.

  • Publish Date: 19-2-2017

  • Length: 54 pages

  • Type: Economics Insight

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2017-09-17T22:38:26+00:00