Globality

Globality to trade with everyone, everywhere, for everything globalization.

A thorough discussion of globality and its impacts on business can be found in a book by three partners of The Boston Consulting Group (BCG): Harold L. Sirkin, James W. Hemerling, and Arindam K. Bhattacharya. Their book, "GLOBALITY: Competing with Everyone from Everywhere for Everything" [cite book | last = Sirkin | first = Harold L. | authorlink = | coauthors = James W. Hemerling, and Arindam K. Bhattacharya | title = GLOBALITY: Competing with Everyone from Everywhere for Everything | publisher = Business Plus | date = 2008-06-11 | location = New York, New York | pages = 304 | url = http://www.bcg.com/globality/ | doi = | id = | isbn = 0446178292 ] , is primarily concerned with the consequences for corporations of this new state of heightened economic competition.

Author and economist Daniel Yergin began using globality in a general way in a 1998 Newsweek article to describe the end-state of the process of globalization [cite news | first=Daniel | last=Yergin | coauthors= | title=The Age Of 'Globality' | date=1998-05-18 | publisher= | url =http://www.newsweek.com/id/92486?tid=relatedcl | work =Newsweek | pages = | accessdate = 2008-07-18 | language = ] . The term also appears in his book, "".

Characteristics

According to all these authors, globality is what comes next after globalization: a new state of worldwide hyper-competition. Sirkin et al. further detail globality’s three main features as it applies to commerce and business:

1. A significant structural shift in the flow of commerce: companies from every part of the world are now competing with each other for “everything” – customers, suppliers, partners, capital, intellectual property, raw materials, distribution systems, manufacturing capabilities, and most important, talent. In this competitive free-for-all, products and services flow from many locations to many destinations.

2. A breakdown in the established hierarchy of commercial power and influence: power is shifting away from traditional centers of influence in developed markets in the United States, Europe, and Japan, as companies from rapidly developing economies (RDEs) are quickly assuming leadership positions in global markets, forcing established leaders to compete on new terms.

3. The emergence of new business and governance practices better suited to a truly global and decentralized business environment. To compete successfully in a world of globality, established industry leaders from developed markets are being forced to learn from competitors in developing markets. The practices include shifting autonomy and decision making outward to satellite operations; redeploying assets to build commerce within emerging regions; and expanding quickly into new markets to match the speed and scale with which challengers are rising.

William Safire traces the etymology of “globality” in his book No Uncertain Terms [http://books.google.com/books?id=Pj2MsS3v0DYC&pg=PA128&lpg=PA128&dq=Daniel+Yergin+%2B+globality&source=web&ots=f4h-RFatxc&sig=CuEGRIIXrKs7zTDE9nfJXyi47t4&hl=en&sa=X&oi=book_result&resnum=8&ct=result#PPA128,M1] and identifies a range of uses as far back as 1942, when it was used as a synonym for “global.” Current use of “globality” as it applies to business – used to describe the current competitive state of world commerce – was not adopted until recently.

History

In their book, Sirkin et al. distinguish globality from globalization based a new set of competitive dynamics between established leaders from developed economies and challenger companies from developing economies. With respect to global business, they argue that globalization was characterized by three fundamental characteristics:

1. Established industry leaders―known as “incumbents”―from the developed economies of the United States, Europe, and Japan relocated their manufacturing activities to developing countries in order to lower the cost of production and, accordingly, reduce the price of their goods offered in their home markets.

2. The incumbents also began to sell their offerings―usually with few if any modifications for local consumers―into the low-cost markets and enjoyed incremental sales gains, as the consumer economies began to grow in these countries.

3. Local companies in developing economies acted primarily as suppliers, jobbers, and local distribution partners, to these established industry leaders.

In this traditional model of globalization, the flow of commerce was predominantly from West to East and followed established Western business practices.

According to Sirkin et al., globality is a totally different kind of environment and has changed this picture dramatically. In today’s new phase of worldwide trade and economic development, companies are “competing with everyone from everywhere for everything.” And while there is no ultimate model for success, no surefire strategy for innovation and growth, emerging-market challengers have evolved new management and governance structures that are ideally suited to this new competitive reality.

Yergin’s chief distinction between globality and globalization is conceptual – he says that former is a “condition” while the latter is a “process.” He describes gloability as the end-state of the waning process of globalization:

“The borders that constrained commerce―but also protected companies from the full brunt of competition―are eroding. Governments are retreating from control of the commanding heights of their economies: they are privatizing and deregulating. Barriers to trade and investment are coming down rapidly. Ever-cheaper communications and ever-faster computers, along with the Internet, are facilitating the flow of goods and services, as well as knowledge and information. Increasingly, companies are integrating their global strategies with global capital markets.”

Further Reading

Sirkin, Harold L.; Hemerling, James W.; Bhattacharya, Arindam K [http://www.whatisglobality.com/] ; with John Butman. (2008). GLOBALITY: Competing with Everyone from Everywhere for Everything [http://www.bcg.com/globality] . New York: Business Plus: ISBN-13: 0446178292

Safire, William (2003). No Uncertain Terms. New York: Simon & Schuster: ISBN-13: 9780641668272

Yergin, Daniel; Stanislaw, Joseph (2002). The Commanding Heights: The Battle for the World Economy [http://www.pbs.org/wgbh/commandingheights/lo/index.html] . New York: Simon & Schuster: ISBN-13: 9780684835693

Zakaria, Fareed [http://www.fareedzakaria.com/books/index.html] ; (2008). The Post-American World. New York: W.W. Norton & Company: ISBN 978-0-393-06235-9

van Agtmael, Antoine (2007). The Emerging Markets Century: How a New Breed of World-Class Companies Is Overtaking the World [http://www.theemergingmarketscentury.com] . New York: Free Press: ISBN-13: 978-0743294577

Bishop, Matthew. "A Bigger World: A Special Report on Globalization [http://www.economist.com/specialreports/displaystory.cfm?story_id=12080751] ." "The Economist" [http://www.economist.com] 20 Sept. 2008: 1-14.

"Knowledge@Wharton". "Whether You Agree with Globality or Disagree, Don't Ignore It [http://knowledge.wharton.upenn.edu/article.cfm?articleid=2037] ." 20 Aug. 2008.

References