International Relations

Read on of the five lessons and Write a 3-4 page memo about the lesson readings for ANY of Lessons 2-6
discuss the questions in the Course Syllabus for the given readings(File Attached), referring to the readings to give answers.
The memo MUST be 12pt type font, one-inch margins, numbered pages.

ANSWER

Memo

TO:

FROM:

DATE:

SUBJECT:

Globalization in business is the increase in the flow of goods, services, capital and ideas across international boundaries. However, this concept can be said to be a misnomer in many different ways. It would be wrong to conclude that globalization is irrelevant, but it is also important to note that the concept of globalization is not as much a big deal as it is made out to be. Some Americans, for example, could blame the reduction of unskilled labour on globalization but that is an incorrect conclusion as trade with developing countries only accounts for at most 20% of the reduction in the earnings of low-skilled American workers (Rodrik, 2002). There are also broader problems associated with the integration of international economies. Despite globalization, national economies are still very much isolated from each other as they were before globalization. Complacency towards the social consequences of globalization include the political backlash that arises against trade. An example of backlash is the candidacy of Patrick Buchanan in the Republican presidential primaries (Rodrik, 2002). Protectionism can lead to people developing anxieties against globalization, leading to the underpinning of global institutions and markets. It is possible to have global institutions as long as the global markets are in alignment with each other.

Convergence is the coordinated movement of two or more so that they can form an image at a single point. For example, countries can converge and agree on the same international market trading rules. Integration, on the other hand, involves forming one whole. For example, the coming together of different countries to form one trading block. The trading block can be said to be an integration of countries (Rodrik, 2002). Resilient global economies require strong institutions. National institutions are the primary facilitators of social and economic development. Therefore, national institutions must remain resilient as they are the source of growth even in the open market. According to Berger (2006), firms focus on an interplay between the internal and external roots on the one hand and on the other between the local and global dimensions. Berger thinks that better knowledge is needed on the conditions of internationalization.

The critics of globalization believe that it is unreasonable for richer countries to impose labour standards on poorer countries. Standards are a set of specifications on which products, procedures or processes under a certain jurisdiction must follow. In international relations and trade markets, there are certain trade and labour standards that countries under the jurisdiction must follow. In the industrial revolution, standards were important as they enabled factories to achieve economics of scale and allowed markets to carry out transactions equitably and efficiently. Labour standards and international trade is prevailing issue. It has, however, gained a place of importance in the debates on globalization. Labour standards are different depending o the development of the country, political, social and cultural conditions of the country. The diversity of labour standards further affects countries industries and firms (Eliott & Richard, 2003). Labour standards in poorer countries may have different effects from those in richer countries, affecting trade. Imposing high labour standards in poorer countries might lead to losses in trade. The same applies to small industries and firms. Labour standards are the rules applied in the way workers are treated. Standards include a wide range of things in the labour market, from the use of child labour, forced labour to the right to unionize, minimum wages, health and safety conditions. The international labour organization negotiates labour standards.

The fundamental institutions of capitalism include the right of ownership in productive assets, the freedom of contract and constitutional government. These three fundamental institutions make capitalism different from the other social systems. This, therefore, further leads to the varying types of capitalism. There are liberal market economies that are found in countries such as the US, UK, Canada and Australia (Rose, 2015). There are also the coordinated market economies which are found in controlled such as Japan and Sweden. The two types of capitalism are differentiated by how firms coordinate with each other and other actors such as trade unions. LMEs highly depend on their endeavours depending on market mechanisms and hierarchies. CMEs rely on non-market interactions to coordinate their relationships with other actors. In CMEs, workers have skills tied to the company, but in LMEs, the skills of the workers are general and can be used to work in other companies.

Denmark has flexible labour markets, which is characterized by high rates of job turnovers compared to other liberal economies such as the UK and US. Firms in Denmark can hire and fire employees without as many restrictions compared to other countries. This also makes it easier for entrepreneurs to start new companies without many bureaucratic delays. The country also has generous income security in terms of unemployment benefits, and the unemployed receive social assistance. The flexicurity increases the risk-taking of people in the labour force, and therefore, people take risks and move from one job to the next. Trade unions are maintained by accepting low job security offers and organizations accepting a generous income security system. The weaknesses of the Danish flexicurity include the high tax burden in the country, which leads to tax resistance and tax evasion. Social networks are disrupted, increasing welfare costs due to the increase in the population of older adults. This system can be applied in countries like the US by making the economy flexible and increasing the unemployment benefits such that people can easily change jobs.

Lean production was adopted in Germany after realizing the competitive advantage the automotive industry in Japan had over Germany due to their utilization of lean production. This led to a series of debates on the advantages and disadvantages of adopting lean production in Germany (Friel, 2014). Lean production centres on the reduction of cost by automation and improvement of efficiency in operations. Collective bargaining and labour market practices impact the diffusion of certain work practices, making them harder for organizations to adopt certain changes. The use of little labour force requires the companies to lay off some of the employees, which is almost impossible in the US due to the labour unions and the collective bargaining power. Labour unions and labour laws impact the differences between practices in firms in different regions of the world in different countries. The competitiveness of automakers in the US, Europe and Japan cannot be at the same level as the diffusion of lean production in these three different regions is different.

Incremental innovation involves small improvements made from existing products in a company. The mid-tech strategy in incremental innovations thus is the use of technology that is not advanced to make innovations on services and products that are already in existence in the company. Fiscal discipline has it that the governments maintain their macroeconomic stability. The central government centrally funds education in Korea from tax revenues. Eighty-five percent of education in Korea is funded by the government and, therefore, the relationship between government support and learning.

References

Berger, S. (2006). How We Compete. New York: Currency.

Elliott, K. A., & Richard, B. Freeman (2003) Can Labor Standards Improve under Globalization. Institute for International Economics, Washington, DC.

Friel, D. (2014). Transferring a lean production concept from Germany to the United States: the impact of labour laws and training systems. IEEE Engineering Management Review, 4(42), 108-118.

Rodrik, D. (2002). Sense and nonsense in the globalization debate (pp. 471-484). Routledge.

Rose, C. (2015). “Note on Comparative Capitalism,” HBS Case Note 9-315-077