The facts behind globalization


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For the last half century, we’ve heard it again and again: Globalization is an irreversible force whose irresistible pressures were destined to shrink, and eventually erase, differences separating people and countries and regions in which they have been embedded for millennia.

This utopian vision has been enshrined in best-selling books such as Tom Friedman’s “The World is Flat,” and often echoed by policymakers, business executives, journalists and academics. They concluded that globalization meant the disappearance of differences among individuals, firms and presumably soon-to-be-marginalized national units.

This shared belief has become so entrenched that only a few brave souls have dared challenge the gospel — empirical evidence notwithstanding.

Had they looked more closely, and especially rigorously, these observers would have realized that much of the argument regarding this allegedly approaching universalism rests on thin air… anecdotal evidence and subjective impressions of the sort associated with deeply seated religious beliefs, rather than solid science, research and analysis.

It is easy to see where the belief in globalization and universalism has come from, and how its proponents got away with an argument supported by superficial, anecdotal and, at times, plainly misleading information.

The argument, after all, has been appealing because it was deemed commonsensical and self-evident. And it was further supported by “opinion leaders” who seemed so confident in their personal observations that almost nobody questioned their conclusions.

AS A HEADLINE, GLOBALIZATION SOUNDS GOOD

After all, it all seemed to make sense. For instance, there is no question that people have been traveling much more than before, giving them the opportunity to observe other people, cultures and behaviors.

Student exchanges, a phenomenon more than a half-millennium old, have been on the upswing. They place young people in the role of in-depth, long-term observers complementing the more sporadic views of camera-touting tourists roaming the globe in ever-increasing numbers. Immigration also has been increasing, creating hybrid cultures and identities, and presumably a global mindset.

And, of course, people have been gaining access to the internet and the virtually unlimited information that flows from all parts of the globe.

The problem, in this case, is not with the numbers, but rather with the attributions made to them and the false, taken-for-granted implications that presumably flowed from them.

It is here that the “fatal error” resides.

The implicit assumption has been that once people have met and interacted with each other, they will surely come to appreciate and approve of each other, and learn their ways, while disseminating their own.

Eventually, this thesis goes, we will shift toward a consensus, articulated in the concepts of “universal values” and “western values.” Or, perhaps we will move toward the mean, where we all hold similar values, beliefs, norms and behavior. In other words, we will develop a universal disposition befitting “citizens of the world,” where our cultural dispositions will be one and the same.

REASON TO FEAR NATIONAL IDENTITY?

This assumption may be appealing.

Unfortunately, it is not only utopian, but, at least from what we have studied, patently wrong.

While interaction can bring about affinity, this is by no means certain. In fact, the opposite may well come to be. Academic scholarship tells us that interaction has as much, if not more, potential to bring about conflict and hostility among competing cultural systems as it is to bring about similarity and mutual appreciation.

This more sinister outcome is possible because interaction is often translated into a perceived threat to one’s culture and identity. Those are powerful forces that tend to be grossly underestimated in a “rational” world (and that’s erroneous in its own right).

We may or may not witness a Clash of Civilizations hypothesis à la political scientist Samuel Huntington. Though signs abound that we already are engaged in it, it is clear, at the very least, that fundamental differences in values, beliefs, norms and behavior associated with distinct cultures are here to stay. It’s also clear that individual and organizational identities will continue to be wrapped in a cultural (as well as national and religious) flag for the foreseeable future.

ACADEMICS FALL SHORT

While the popular media are partially responsible for the fundamental error of equating globalization with cultural standardization and universalization, we should have expected more from academics.

After all, the mark of a scholar is the ability to dispassionately view a phenomenon and draw conclusions from available evidence. Unfortunately, academia has not only been quiet about misplaced popular hype, but, as an active accomplice, bears at least part of the blame. Business schools have done their share to promote, amplify and disseminate this erroneous belief, touting a global curriculum that remains nothing but.

Clearly, in their zeal to provide students with globally applicable tools, they failed to teach the depth and complexity of a global environment. Many didn’t even bother to teach culture, or left it to those happy to sell “knowledge” based on hearsay and anecdotes.

National culture is a critical variable that has influenced just about every business process and outcome in every function including management, marketing and finance. That’s demonstrated by premiums paid by acquirers in cross-border mergers and acquisitions and the survival probability of international alliances. Still, it remains the subject of bias and speculation.

How often did you hear directly, or it has been implied, that national cultures are moving closer to each other to the point that meaningful differences are disappearing? Quite often, I am sure. But how often have you seen real evidence to support this alleged trend?

NATIONAL IDENTITY ALIVE AND WELL

In a synthesizing study covering hundreds of thousands of respondents, my colleague, Simi Ronen, and I compared similarity and dissimilarity among national cultures that existed in the 1970s, as reflected in individual work-related values, to those observed a generation later.

The result? Almost no difference whatsoever.

The similarity is striking. A map we published in 1985 is replicated almost one to one some three decades later. In short, a generation of extensive globalization has failed to produce almost any changes whatsoever in the cultural map of the world!

The findings, we strongly suggested, show cultural variations are here to stay. This does not guarantee that results will not diverge in the future, but seeing empirical results suggesting a lack of impact from the most massive globalization wave we have witnessed so far, should, at the very least, give us pause.

And the fact that contact is as likely to produce reinforcement of cultural patterns suggests that further globalization may not only fail to erase cultural differences, but may even strengthen and highlight those differences.

Of course, culture is not the only force that hinders universalism.

Animosity among countries has not disappeared. New conflicts appear and reappear year in and year out. It is not a surprise that conflicts, even those rooted in events decades and centuries ago, impact international trade and investment today. One example is the propensity of firms from certain countries forming alliances with others.

Indeed, if culture and international relations seem abstract, review the so-called hard facts. Regional blocs have been growing, but show signs of fracture. The European Union shows membership can expand and retrench. We’re familiar with Brexit, but we may soon have to invent other monikers.

Integration is reversible. While it may or may not trigger a domino effect, a chain reaction cannot be ruled out. European authorities clearly understand this, but may find themselves powerless to prevent it, punishment to deserters notwithstanding. Identities continue to be nation- rather than region- or block-based.

Oded Shenkar is the co-author of “Navigating Global Business, A Cultural Compass” (available at Amazon.com). TJ

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