THE IMPACT OF GLOBALIZATION ON INDIVIDUALS, COMPANIES AND ON BUSINESS INFORMATION SYSTEMS – PERSPECTIVES OF THE ECONOMIC CRISIS Lect. univ. dr. Popescu Veronica Adriana Academia Comercială Satu – Mare Satu – Mare /Romania Prof. univ. dr. Popescu N. Gheorghe Academia de Studii Economice Bucharest /Romania
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Abstract The paper called “Impact of Globalization on Individuals, Firms and Business Information Systems – the perspective of the Economic Crisis” has the aim of presenting New Economy’s nowadays problems as a result of the global economic crises. The questions we are trying to find the answers for, in our analyses, are as fallows: “Which is the impact of globalization on Individuals, Firms and Business Information Systems?”, “Is the global economy going threw a period of crises?” and “In what way globalization and the global economic crises will affect humanity?”. We believe that, before everything, the delimitation of the historical background is essential nowadays, and that is because of the extent of the globalization phenomenon at the world’s level and afterwards we analyzed the theoretical aspects regarding the global economic crises and in what way it will affect individuals, firms and business information system and, at the end of our presentation, we will put a diagnostic at the global economic level. Keywords Economic crises, globalization, business information systems.
INTRODUCTION The paper with the subject “The impact of globalization on individuals, companies and on business information systems – perspectives of the economic crisis” aims to approach the current problems of the New Economy as a result of the global economic crisis. The questions which we intend to find the answer in our material are as follows: “What is the impact of globalization on individuals, companies and business information systems?”, “Is the global economy in crisis?” and “How does globalization and the global economic crisis will affect the world?” Above all, we consider to be essential the demarcation of the historical frame of where we are today, as a consequence of expanding the globalization phenomenon in the world, and then to analyze theoretically what does the global crisis represent and how will affect individuals, firms and the business information systems and, at the end, we shall put a “diagnosis” on the global economy.
1. THE GLOBAL ECONOMY GOES BEYOND THE LIMITS OF TECHNOLOGY. THE GLOBAL ECONOMY INVOLVES THE GLOBALIZATION OF INDIVIDUALS Globalization must be seen today as being beyond technology, meaning that it implies, at the same time, something more profound and complex, namely the globalization of individuals. Due to new techniques and global technologies, it has come to a contraction of time and space, which allowed mankind to conduct transactions anywhere in the world in real time. At the same time, the globalization of individuals must mean responsibility and responsibility must be closely related to the development of individuals, respectively individuals’ responsibility towards their own development, awareness of limits, which once exceeded, must be followed by new rules and values, firmer and more complex than those so far. Here's how Thomas Friedman explains the phenomenon of globalization of individuals: “Globalization has gone from the globalization of companies to the globalization of individuals. (...) This sense of responsibility towards their own development is going further today than ever before. In many global industries you are forced to prove every day that you deserve your job by the value you create and the unique skills that you can put in play. And if you do not succeed, your job can fly further and faster than ever.” (Friedman, Thomas L. (2007)) Globalization has brought with it the idea that anything can be marketed, nowadays there are no more things that can not be marketed: “Let’s not fool ourselves: we live in a world in which more and more things are marketable. (...) At any time, the available technology especially transportation and communications - largely determines which goods and services are easy to be marketed at international level and which are difficult or impossible to market. Simplifying this elementary fact, economy theorists are generally transposing the goods and services worldwide as integrating into two broad categories: "marketable" and "unmarketable".” (Friedman, Thomas L. (2007)) The only problem that will appear within the new context will be the ability to sell more goods and services electronically, the distinction being made between the electronic services that can be marketed over long distances without being affected in any way and those which can not be marketed over long distances as their quality will be affected to some extent: “(...) In the future - and to some extent already in the present - the main distinction in international trade will not be made between things that can be put in a box and the others. However we shall distinguish, between services that can be provided electronically over long distances without the loss of quality (or with minimal loss) and the others. The fact that a wide range of services are becoming marketable is, as they say, all the rage. And we can be pretty sure that the share of services that can be provided electronically will increase.” (Friedman, Thomas L. (2007)) Globalization of individuals also involves a better and broader understanding of human behaviour and the way people perceive certain events. The individuals’ challenge to cope with the changes occurred within the new global context is inherent, but what really show interest are the way in which the change will affect the thinking of individuals, the concepts so far, life and everyday activities. We are also interested in “(...) the way we nourish the right hemisphere as properly as the left one”, a fact that results from the following:
Great specialists from today, from the field of psychology and psychoanalysis, believe that the current evolution induced by the globalization phenomenon, will largely affect individuals' lives. They have demonstrated that at the same time with the new changes generated by the context of globalization, a series of phenomena
will take place at the individual’s thought level. However, the so complex structure of the human brain will be able to help the individual explain the way in which time and space act on thinking and his life: “Those two hemispheres work in collaboration and we use them simultaneously in almost everything we do. But the structure of our brain can help us to better explain the patterns of the time we’re living.” (Friedman, Thomas L. (2007)) Specialists have demonstrated that the overwhelming element in determining certain stages in the life of the individual is the human motivation. Inner motivation is the one that is causing the individual to act in a certain sense and take the main decisions of life, career, and the idea to attend certain studies. Globalization of the economy will be profoundly influenced by the extent to which the inner motivation will act on globalization of individuals as part of the current complexity generated by the New Economy: “The types of skills that are becoming now most important are turning to be the same activities that people are devoting to from inner motivation. Relatively few people become accountants from inner motivation. (...) but exactly the inner motivation is the one that makes us become creative and empathic, designers and good narrators, advisers and consultants.” (Friedman, Thomas L. (2007)) The specific features of the individual are related to his many interests, which generates his need to communicate, to be more sociable, to depend on someone from outside to get help when needed, to study certain subjects, as his knowledge degree leads him to certain areas of interest: “The idea was that people who have multiple interests are more talkative, more sociable, they know how to easily ask for help when they need, they know to help others who need support, they can think horizontally, they know how to link things from different disciplines and fields.” (Friedman, Thomas L. (2007)) Globalization of individuals becomes closely linked to their inner feelings, the level of knowledge required by society, the passage of time and the access to new techniques and technologies. The lives of individuals must be seen and then analyzed in line with globalization, because each new interest of the individual is the consequence of what is happening around him Globalization of individuals must primarily take into account, the access to new technologies and techniques. Science is the one who manages to open new horizons for each individual in part and maybe that is why each individual has decided to specialize solely on a particular branch, taking into account his own interests and having a number of reasons: “We are surrounded by a true ocean of science (...) and this type of international division of labour is very logical.” (Friedman, Thomas L. (2007)) The conclusion that one must draw from here is that technique and technology in the current context of globalizing the individuals are those which have caused a division of labour so obvious and visible and with a so great impact on the level of society. Globalization of individuals will also mean their desire to have access to increased income. This will be possible in the extent to which each individual will tend to improve his position trying to continue his education throughout life: “Both technology and trade increase the general level of income – they make the global "cake" bigger - but they tend to fluctuate in favouring the labour force with high qualification, to the detriment of that with low qualification.” (Friedman, Thomas L. (2007)) The access to a better education will obviously favour certain categories of individuals, who will become increasingly better paid and will occupy positions
increasingly well seen and most favourable within society. Metaphorically speaking, the access to better education and a high qualification will also generate simultaneously the access to a “bigger and better slice of the global cake.” Another perspective that must be taken into account is that the inherent change generated by the phenomenon of globalizing the individuals will lead, inevitably, to their mobilization in order to cope with the change, without being excluded from society and without being left behind. This was synthesized extremely well with the help of the following quote: “Will Rogers said it long ago: "Even if you are on the right track, someone will step on you if you’re just staying there." The more the world becomes, the faster this thing will happen." (Friedman, Thomas L. (2007))
The globalization of individuals highlights the reluctance and fear of many of them to change. It known the fact that the prospect of change can generate panic among individuals and this is based on many factors: the existence stages they have gone, the education they had access to when they were young, the genetic baggage they have, the family they are part of, their age, the country or geographical region where they are, the requirements that exist in the labour market in the country in which they work, their opening to new, etc… Therefore, one can say that: “Everyone wants economic growth, but nobody wants change.” (Friedman, Thomas L. (2007)) Analyzing the induced perspective of the globalization of individuals and taking into account its defining elements, respectively their change in thinking, enhancing the human motivation, determining and redefining their many interests, the access to a wide range of information and an increase of the global division of labour, the desire to own an amount of money as high as possible as a result of better educational training, the idea to cope with change and to be perpetually in an advantageous position, the fear of new and of change, we can say that it is in our power to create the civilization we want. The idea that one must remember is that every individual has the power to change the future, each individual is part of this new universe, and the desire to generate creative energy to lead a better life is a given course of nature, a natural feeling to be followed and supported by present and future generations.
2. THE GLOBAL ECONOMY GOES BEYOND TECHNOLOGY. THE GLOBAL ECONOMY INVOLVES THE GLOBALIZATION OF THE COMPANIES It is essential that companies (regardless of their size or area in which they are), in turn, to be prepared for change and to be open to new: “If you want to flourish in a flatten world, you’d better understand that anything that can be done will be done - and much faster than you think. The only question is whether you will do something or you will just be the object of this something. You will be the one who will drive the innovation or one of your competitors will use it as a vehicle to pass over you with.” (Friedman, Thomas L. (2007)) The key to success within the process of “flattening the world” is to understand the speed at which things come to happen. Due to the rapid development globally, speed is the main distinctive element: the speed with which an individual can obtain access to a certain vital information for him, the speed with which a new product can be launched and promoted in a market, the speed with which an innovation can be born within the research-development department, the speed with which an individual may face competition, the speed with which
humanity can face novelty and can absorb them to be able to generate progress and diversity. The companies are those which will face, in turn, the new innovative elements imposed by globalization and will have to find a new pace of development much more quickly, to maintain on the market. The idea is that, for a company to be competitive, it must meet a series of rules and strategies, being able to process the novelty in a fast pace and to learn at the same time from the neighbouring companies as well. We shall emphasize some of the rules and strategies of successful companies (Friedman, Thomas L. (2007)):
Rule no. 1: “When the world goes flat - and you are feeling flattened - reach for a shovel and dig inside yourself. Don't try to build walls.” The first rule is that no company should oppose the changes arising from the “flattening the world”. The success of a company is given by the extent in which it will perceive and will rapidly absorb the novelty, without opposing. “To be against the stream” would be the largest and most serious mistake that a company could make in the process of globalization. Rule no. 2: “And the small shall act big.” In an era of globalization, the change will affect both small and large companies and the key to success of the small companies would be to learn to perceive the things in the manner in which the large companies do, in order to learn from those that are better than them and to be able to develop their business in time. Here is why: “One way small companies flourish in the flat world is by learning to act really big. And the key to being small and acting big is being quick to take advantage of all the new tools for collaboration to reach farther, faster, wider and deeper.” Speed is vital to the success of a company, regardless of its size. Rule no. 3: “And the big shall act small.” Metaphorically speaking, companies will learn in the era of globalization “to act small”, in other words to pay attention to the smallest detail, while their customers will learn “to act big”, meaning to have increasingly bigger pretensions and expectations. This can be explained best as follows: “One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to act really big.” “Perception” is the key to success in an era of globalization: if a company is perceived by its customers as being successful, will have a tremendous advantage and will increase its profits further, if, however, opposed to the above concept, a company is perceived as being mediocre, will be lost and, in time, due to decreasing profits, will have to leave the market or to readapt its field of activity. Rule no. 4: “The best companies are the best collaborators.” During the era of globalization, competition becomes so great that there is the idea according to which the solution is to use collaborators. Collaboration may be within the company, through the relations between individuals and their motivation, or by working with business partners outside the company: “In the flat world, more and more business will be done through collaborations within and between companies, for a very simple reason: The next layers of value creation - whether in technology, marketing, biomedicine, or manufacturing - are becoming so complex that no single firm or department is going to be able to master them alone.” Due to the rapid pace of development, no company will be able to maintain the same parameters and respond
promptly to consumer needs, without benefiting of help from competitors. Aid may come, for example by increasing the collaboration between companies, which will determine companies to maintain on the market instead of them to disappear.
Rule no. 5: “In a flat world, the best companies stay healthy by getting regular chest x-rays and then selling the results to their clients.” Rule no. 5 contains, in turn, a series of figurative elements. The idea would be that any successful company should self evaluate only as often as possible and to report within the market competition, first to itself and then to other companies. The new era of globalization sustains the idea according to which the competition must be initiated and taken, first of all, with yourself, and then, with others. Rule no. 6: “The best companies outsource to win, not to shrink.” The globalization of the business world brought along the outsourcing process. More and more companies are forced to resort to this process: “They outsource to innovate faster and more cheaply in order to grow larger, fain market share and hire more and different specialists - not to save money by firing more people.” Outsourcing is aimed at economic growth and holding a market share as more advantageous. However, this also requires access to a greater number of specialists to provide a company new ideas and to enable the creation of new innovations. From here, the concept: “When there are things for sale, you tend to buy more.” A technique of the great producers is to give their customers the opportunity to have access to products they never thought they would need. It is one of the most powerful strategy techniques based on the concept that a company must provide its customers, to be truly innovative, even products whose necessity was not even felt at that time by consumers. Rule no. 7: “Outsourcing (...) is also for idealists.” “The idealists” are those that still dream that a company may be on the market, even in the conditions in which it refuses external support from the collaborators, from neighboring companies, etc... Their view must be changed radically, and the proposed solution is that of outsourcing.
CONCLUSIONS Within our paper titled “The impact of globalization on individuals, companies and on business information systems – perspectives of the economic crisis” we have approached the problems of today's New Economy as a result of the global economic crisis, taking into account the impact of the phenomenon of globalization, a phenomenon which has known until now, an unprecedented development. What is of note in our analysis, is that globalization as a complex phenomenon of the New Economy, goes beyond the until recently existing borders, assuming today's globalization of individuals (primarily), of companies, of information systems and basic areas of society such as economic, financial accounting, financial-economic analysis , statistics, management, marketing, politics and human resources.
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