Thursday, January 18, 2007

Thoughts on Globalization

A while ago, when we needed something, we had no choice but to look locally. This kept many people in business locally, even if they weren't the "best", because they were the best locally.

Now we have a global marketplace. People don't want only one choice, because monopolies provide poor service. So there will always be room for a few choices for any product or service. If we are lucky, these will be the best few choices anywhere. So no matter whether you live in Oshkosh or New York, you will have the same top choices. Instead of having to choose among the one or two local merchants, which may be the best locally, but lesser globally.

On the other hand, the same choices globally means little variation in our lives, anywhere. In other words, along with "best" comes the idea of "sameness". Not everything, such as a good Chinese meal, has a unique best. And even if something has a best, the best may only be good for a few times, and then it sinks in value, like the "best" movie or game.

This applies to goods. But is there a best service?

Even if there was, service still relies on local talent. After all, you can't have the "best" cleaners from anywhere in the world come to clean your pool. Globalization can't exactly fix the best service problem. But it can fix part of it.

Some services appear pretty uniform no matter where you are: fast food, postal (with egregious exceptions), car rentals, roto rooter. This happens as processes are standardized and people are taken out of the equation. The service gets more uniform (and poorer), excepting the service people who fix or replace the automation.

Globalization can take the best "process" and try to create the best service. If we say that national brand X is the best cleaning service, then we mean that it has the best cleaning service process (so far as methods and training) anywhere. It still may not compete with local cleaning service Y in terms of quality; Y may have better people and make more personal exceptions and allowances for our special needs. Y and X remain competitive, offering best service and personalized vs pretty good but well known and probably cheaper.

While before, you simply chose the better service. Service equaled people. Now service equals process plus people. Local burger used to equal local process plus local people. McD's equals McD's process, plus local people.

People are still kept busy, but in less important positions. Instead of running their own services less than perfectly, they are working for global services, hopefully more competently. Globalization is not removing the need for local people, it is removing the need for local process.

Are the processes in the world getting better? They're getting cheaper, which is certainly better in one major way. It is better that the entire world have the option of cheap McD hamburgers, than only one quarter of the world have the option of any burgers at all.

If the less efficient processes are washed away, many people who define themselves as process originators are going to lose their living. These people will have to work in their fields for the corporate conglomerate, or in service to them somehow.

Efficient processes get more done with less, which means cheaper; more value for the money. But they are also less detailed. Processes get more rigid and impersonal, which is bad.

So long as these conglomerates are beholden to the bottom line of cash, and not to sustainable workforce and happy workers, this is also bad.

Wikipedia goes into details about the arguments to the eventual positive or negative aspects of globalization, both theoretical and in practice.


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