Globalization and Localization
Globalization and Localization
- Introduction
Globalization is the process of integrating industries, cultures, economies, policy making and markets around the globe. In the past, globalization usually used to focus on the economic side of the world. This involved trade, international capital flows and foreign direct investment. In recent times, the scope has been broadened to include a variety of activities and areas such as technology, socio-cultural, media, political, culture and biological factors (Smith, 2008). Localization on the other hand refers to that process whereby a product or a service is adjusted in order to meet the functional properties of a given area. Some of the characteristics that these products are expected to meet include language, political, legal and cultural aspect. The main driver of localization is the fact that different markets usually have different expectations. Therefore, what works for one market will not necessary work for the other markets (Dunne, 2006).
The essay is going to analyze various impacts that both globalization and localization have on the environment. There is also an analysis of how policy instruments can best be implemented in order to encourage sustainable urban development. The main policy implementation will concentrate of carbon control and minimization of excessive resource exploitation. Examination of whether to adopt globalization or localization will also feature in the easy. Using both approaches is viewed as the way forward in the essay. That means adopting the approach of think globally and act locally.
- Literature Review
Localization Drivers for Multinational Companies
In recent times, multi-national companies have adopted various aspects of localization while operating in foreign countries. There are several drivers in this form of localization. Among them are host country characteristics, market characteristics, company characteristics and industry characteristics (Dunne, 2006). Host country characteristics entail the legal framework, policies, level of technology among others. It is upon the company to adhere to various standards for them to survive. Industry traits entail aspects such as competition, suppliers with whom the relevant companies must have knowledge of in order to thrive. The same goes to the company and market traits. A company should be aware of its strengths, opportunities, weaknesses and threats in order to survive the market (Dunne, 2006). Various benchmarks are being used for this analysis.
Aspects that have Necessitated Globalization
Various aspects have created the need for globalization in recent times. These aspects include need for direct foreign investment, positive interdependence, economies of scale and technological innovation. Foreign direct investments aid in growth of global companies that result in positive industrial restructuring. It can be integrated with technology innovation since it boosts the aspect of knowledge transfer. A positive interdependence is developed in that one country needs the other in order to run its systems smoothly. This ensures that there will be working in partnerships between the countries hence mitigating any antagonist perspectives (Homann, Koslowski & Luetge, 2007). Economies of scale on the other hand emanate whereby prices and costs reduce due to the ability of producing in large quantities. This is a key ingredient for economic growth.
3.Impacts of Globalization
It is apparent that globalization has both negative and positive effects on the urban environment. Among the positive aspects is that globalization fosters economic growth. Through economic growth, living standards are improved. The systems used by people tend to be more advanced hence making life more comfortable and appealing. Globalization also results to transfer of information from one country to another. This transfer has spearheaded the growth of technology in the world on a wider array. Improvements of technology have helped individuals in reducing the time they spend in doing things, producing large quantity of products and quality production among others (Homann, Koslowski&Luetge, 2007). There has also been establishment of positive relationships among the governments of different countries. However, globalization also has its share of negative impacts on the urban environment. Among them is resource exploitation. When products are being manufactured for export, there is usually a tendency by the producers to exploit the locally available resources in order to meet the desired production level. This is a suppressive action to the urban environment since it might result to extinction of this raw material in the future. The locals in the country will end up suffering in future if the occurrence actualizes (Twining, 2006). Globalization also results to environmental degradation. Some land use and farming practices used in order to meet global production levels increase the levels of nitrous oxide and methane. This results to various health effects on the individuals within the affected region. Another negative impact is the aspect of green house effect and global warming. Burning coal, oil, natural gas and gasoline for automobiles increases levels of carbon dioxide emission. Instances of deforestation are also high in order to meet the required industrial capacity for globalization. Trees usually consume carbon dioxide and give out oxygen. Deforestation means that there will be increased carbon dioxide levels in the atmosphere. In the long-run, this will result to global warming (Twining, 2006).
4.Impacts of Localization
Among the positive impacts is that localization prevents excessive consumption of resources. This is because the people involved in the planning process are community conscious, and wants its sustainability to last for as long as possible. In the long-run, this prevents exhaustion of raw materials. Localization also enhances environmental protection. It is easier to control deforestation and emission of green house gases through localization. Under localization, growth is easily controlled and the rate at which industries tend to expand is manageable. Local authorities also have various regulations that help in reducing the emission of these gases. This prevents aspects of global warming to a great extent (Dunne, 2006). Through localization there is also greater awareness of local issues. This helps in developing suitable solutions that impact the urban environment positively.
Negative impacts on the other hand include the prospect of localization restricting the choice of services and goods available in the urban environment. This tends to limit the freedom of choice among the members of the community. It also limits transfer of technology from one region to another. Individuals are very rigid and are not ready to accept any changes regarding the way they do their things. This affects the general progress of the people involved. Localization makes it difficult to deal with global environmental problems too. This is due to differences in policies adopted at the local and global level. Trying to make them compatible will amount to conflict. Narrow economic base that emanates from localization also results to instability. It becomes difficult for a region to realize sustainability while operating on its own (Dunne, 2006).
From the above assessments, it is apparent that both mechanisms have their negative side. Combining both approaches would be the best way forward. Under this approach, it is all about think globally and act locally. Operating on a global scope, but prioritizing local aspects has a lot of advantages to the organizations involved. Among the advantages is establishment of favorable relationship with the local authority. The basis of the relationship is based on how these organizations have the ability of enhancing the local regulations as they undertake their global operations. It becomes easier for the local authority to establish policies that favor globalization as a way of showing appreciation (Hines, 2013). Controlling urban resources also becomes easy since there is limitation on what can be used at a certain time. This does not limit globalization since there is transfer of technology that helps in optimal utilization of the Percentage of resources that have been allowed for exploitation hence increasing the output. Minimizing carbon emission into the atmosphere is also made possible due to local regulations. The prospects of the products and services being provided to be accepted by the local consumers is high since the foreign organizations have made their services and products in a way that is appealing to them (Hines, 2013). Political, social and cultural aspects are all incorporated. This makes market entry in the global economy a streamlined one.
5.Corporate Strategies
There are several companies that have attempted to brand their products in a way that sells the global and local dimensions and have reaped favorable results. Among them is Kentucky Fried Chicken (KFC) operation in China. The company first had to change its slogan in the country since it nearly resulted in catastrophic mistranslation. It has done a favorable job in infiltrating the Chinese market. When it came to China, it did not change the famous blend of 11 different spices and herbs. However, the company introduced a variety of China-specific food options to compliment the standard western fare. Traditional Chinese breakfast breads, variety of rice-paired dishes and pots of Chinese porridge established the image and popularity of KFC in China (Kettemann, 2013). This has helped the company to remain viable in the market since its inception.
Another company that has also succeeded in establishing the aspect of think globally and act locally is Samsung. Samsung came into the French market as a late entrant after Philips, Nokia and Sony. However, it has outperformed the rest in current operations due to its deliberate localization efforts since its inception in the country. Samsung is a Korean company, but applying localization aspects such as packaging, design, employee engagement mechanisms have helped in bringing success in this foreign market (Kettemann, 2013). The future looks brighter for the company in the French market.
However, the adoption of think globally and act locally perspective alone will not lead to sustainable urban development. Policy instruments need to be implemented in order to meet this realization. Among the policies that can work is having a taxation policy on emission of carbon into the atmosphere. The policy should ascertain that exceeding certain levels of emission results to a certain percentage of tax. These fines should be very high in order to discourage organizations from exceeding the desired limits (Alley, 2013). If a company was to exceed the set limits, the operation costs would increase through the heavy taxation. This will reduce the profits being enjoyed significantly. As a result, organizations will venture into research and development in order to come up with innovations that will conceive production mechanisms that reduce carbon emissions into the environment. A country like China will benefit significantly to such an approach since it is the country with the largest carbon footprint in the world. If levels of carbon emission are reduced, pollution is also reduced hence increasing the life expectancy of the individuals within the urban environment (Alley, 2013). This will result to a sustainable urban development.
There should also be a regulation on the sub-national governments. This will include a control on the nature of investments that they make on various infrastructures. The investments should involve low-carbon physical and social infrastructure. This is regardless to the cost that will be incurred. Sub-national governments have gained the recognition of using materials with high carbon emission in their attempts to save on costs in order to retain the desired balanced budget.
Policies on the level of raw materials to be exploited for the purpose of producing export goods should be implemented. This is because globalization is resulting to exploiting of various resources of a country. Exploitation of these resources is leading to unsustainable development due to the future prospect. The country will end up importing these resources in future hence deteriorating its balance of payment. This tends to diminish the aspect of economic growth. There should be a limit on the levels of resources to be exploited for there to be sustainable development (Rydin, 2010). This is by putting into account both the present and future status.
6.Conclusion
From the above information it is apparent that both localization and globalization have an impact on the urban environment. These impacts are both positive and negative. This means that the two approaches can work best when applied together. This way they will be able to complement each other. The perspectives to be adopted under this approach are think globally and act locally. It involves promoting globalization in a way that takes into consideration the sustainability of the locals involved. A company such as Samsung has used this approach and it has worked favorably. It has helped in tackling competition in the French market where its competitors were the pioneers. For KFC, think globally and act locally has helped it gain consumer loyalty in China for a long period. This is due to the incorporation of what consumers are accustomed to in conjunction with what is being offered in the western markets.
However, even after adopting a localization approach in their respective markets, both KFC and Samsung do not uphold a sustainable carbon footprint. KFC has opened several outlets in the Chinese market. This means there is increased heating of oil used in the preparation of chickens, which results to increased carbon emission. When 1 liter of oil is heated, it results to an emission of 3kg of CO2 per unit (Kettemann, 2013). Most of the Chicken is also sourced internationally. This means there is increased emission of CO2 that results from the transportation process since gasoline and petrol are consumed in the process. If most of these chickens are sourced locally, the carbon footprint would be reduced, but that is not how the company operates. It is more of profit oriented than sustainability oriented. A similar case applies to Samsung operations in the French market. As its operations continue to expand, so does the carbon footprint. Green house gases are emitted during the distribution, production, usage and scraping of the products (Kettemann, 2013).
It is apparent that these companies are efficient in adopting localization, but are not ready to enhance environmental sustainability. As their businesses expand, their carbon foot-prints also increase. As a result, various policies such as heavy taxation on carbon emission should be implemented in order to bring about sustainable development. There is no company that wants increased costs; hence if they are forced to minimize carbon emission in order to reduce their operation cost, they will find a way of doing it by investing in research and development. Control on the usage of local resources also plays a vital role in enhancing sustainable development.
References
Alley, R. (2013). The Carbon Control Knob. Washington: Island Press.
Dunne, K. J. (2006). Perspectives on localization. Amsterdam: J. Benjamins Pub. Co..
Hines, C. (2013). Localization a Global Manifesto.. Hoboken: Taylor and Francis.
Rydin, Y. (2010). Governing for sustainable urban development. London: Earthscan.
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