Essay: Changes Needed for the Globalization System

There is a great deal of conversation about globalization these days — and rightly so. Everybody is affected by globalization.

But usually this discussion takes place on a decidedly local level: how globalization affects my job or how it affects some person in a “sweat shop” in another part of the world. Sometimes the discussions get to the national level — what this means for my country. But the issues of globalization are bigger than any one individual, company, or even nation. And in this era of connectedness, what happens in my corner of the world affects your corner of the world and vice versa. It is time we begin to look at these issues as a system, beyond personal interests.

Though we have a small but increasing number of international laws and an increasing amount of international enforcement, we need to have conversations on three levels to begin to understand the problems of globalization and to identify solutions for them:

  1. To discuss, at the level of our own companies and organizations, how we are impacted by global issues, and to look for ways to benefit from — but also be good citizens in this new global world.
  2. To encourage discussion in appropriate groupings of our industry about the right kind of regulatory system, or whether we want regulation at all. The more we can do voluntarily as industry groups, the less likely we are to be restricted by overly bureaucratic and woodenly applied systems.
  3. To develop cross-industry groups to look for solutions. We need to see how can we address government, business, and NGOs in a positive cooperative way, so that all sectors of society can work together intelligently internationally.

This is beginning to happen. For example, international accountancy bodies are looking very seriously at how we can create a financial system that does not continue to externalize environmental costs. At the moment, the accounting system simply looks at what is inside in my business. It does not look at the affects of business on society. If I terminate a job or push out permitted pollutants into the environment this obviously creates costs for the society, but not for my business. So accountants are trying to create an accountancy system that takes all these kinds of factors into account, in order to come up with a system in which the user pays.

Business schools should be contributing to the debate as well. Not only is this intellectually interesting, but when it is sorted out it will also help us create a genuinely level playing field and address problems of society that, at present, are not addressable.

Individuals and individual companies often look at such issues and see only a loss of privilege and opportunity, and they are not motivated to bring about change for fear of loss. But whenever society as a whole improves, everyone benefits. Building a level global playing field increases the whole economy.

Injustice always has only a limited time frame, a set duration depending on how bad it gets or how many people it affects. For example, the injustice in France in the 18th century led to a violent revolution, where kings and emperors were overthrown. But if you create a just system, you remove the social pressures that target those who hold onto power in an unjust system. In a just system, where it is absolutely clear you are winning because of your merit and not because of your power, nobody is going to argue with you. But if it is patently clear that you are winning because you are powerful, those who are not similarly powerful will sooner or later reach a point where they to buck the system or even pull it down.

Selfishness and thoughtlessness are a part of the human condition, and it requires a great deal of cultural support to nurture some degree of altruism, some degree of thinking beyond the individual. Until 30 or 40 years ago these were issues that not every person on earth needed to think about, because each part of the world lived in relative isolation. But as the world globalizes, these issues are coming at us much more rapidly than at any time in history, and it is urgent for us all to think about them. Today, we may not have the solutions to the problems, or even the mechanism by which the solutions are going to be addressed. The sooner we start coming to a consensus about solutions, the greater the chance that we can implement the solutions before we cause a global collapse.

Prabhu Guptara is executive director,
Organizational Development,
Wolfsberg Executive Development Centre of UBS
in Switzerland. He has contributed this piece in an entirely personal capacity.