Houses Path Goal Theory
The theory was developed by Robert House and has its roots in the expectancy theory of motivation. The theory is based on the premise that an employee’s perception of expectancies between his effort and performance is greatly affected by a leader’s behavior. The leaders help group members in attaining rewards by clarifying the paths to […]
Why are Credit Default Swaps Dangerous?
When credit default swaps first found their way into the global market, they were hailed as being a great invention. After all, they helped isolate the credit risk and helped investors use leverage to maximize their returns. It seemed like the most sensible thing to do and the end result seemed like a win-win deal […]
Mistakes to be Avoided While Building a Risk Management System
There are several books that have been written about the steps that need to be undertaken in order to be able to be effectively able to implement operational risk management in an organization. However, a lot of companies fail in their endeavors. This is because very few studies have been conducted about mistakes that need […]
Who are Reinsurance Brokers? – Their Compensation and Services
We now know that a reinsurance contract is a contract between an insurance company and a reinsurance company. However, up until now, we have been assuming that the reinsurance company directly deals with their customers i.e. the insurance company. However, this is generally not the case. In a large number of cases, insurance companies deal […]
Pros and Cons of Catastrophe Modeling
Catastrophe modeling used to be considered very complex and difficult to use. Just a few decades back, most insurance companies were either unwilling to or unable to use catastrophe models. However, over the past couple of decades, the field of catastrophe modeling has seen rapid change. The increase in computing power has led to catastrophe […]
Concomitant with the globalization of the world there has emerged a trend wherein in countries around the world, parochial interests and chauvinistic interests have emerged as a response to the globalization process. This emergence has mainly been due to the fact that globalization benefits a few at the expense of the many and hence, the disenfranchised and the dispossessed find a voice and expression through the parochial interests that emerge to push the interests of those left out by the globalization process.
In other words, as globalization favors the skilled and those who are savvy to take advantage of the opportunities thrown up by globalization, the interests of those who have lost out in this process are taken care of by the parochial interests. These parties with agendas of localization pose a threat to the globalization process because they threaten to derail the integration of the economies of the world into the global economy.
Therefore, business leaders have to be cognizant of this trend and ensure that their companies offer benefits to everyone instead of a few. This means that global companies have to glocalize or adapt their global policies to local conditions so that the benefits are evenly distributed instead of being skewed to benefit a few.
The emergence of parochial and chauvinistic interests has also encouraged the rise of the identity-based politics wherein political parties and those parties that pander to local, regional, and national identities have emerged to reclaim the space that has been left behind as their countries globalized and integrated themselves into the global economy.
The noted author, Amy Chua, points out in her book, The World on Fire that because of the globalization processes benefiting certain sections, those that have been left out of the process are increasingly turning to identity politics and protesting against the global corporations in a manner that can be described as emanating from the fires of anger. This situation confronts many countries in Asia where regional and chauvinistic parties are increasingly on the rise to counter the globalization processes. Indeed, the situation in countries like India and Thailand along with Indonesia has become so bad that there is a veritable gridlock in the globalization process, which is increasingly unable to move forward because of the intransigence of the political system to evolve a consensus on how to move forward with global integration.
The rise of parochial and identity based politics has severe impacts on the countries. For instance, it is no longer possible for the main political parties in these countries to move forward with global integration in the face of vociferous protests from the local and regional parties.
Further, the very process of globalization is imperiled because of the gridlock in the political system that arises from the conflict between those who have benefited from globalization and those who have been left out of the process.
Indeed, in many Asian countries, it is common to find large-scale protests and resistance to the entry of global corporations into those countries that it becomes impossible for these countries to integrate themselves into the global economy.
In countries like Indonesia and India, there has been violence as well directed at the global corporations forcing many of them to abandon their efforts to expand in these countries. Hence, the net result is that these countries are abandoned by global capital that is country blind and flows into whichever country that offers the best possible returns and welcomes them with open arms.
Finally, it is up to the policymakers in the developing countries to explain the benefits of the globalization process to their citizens. Concerted awareness campaigns and targeted educational programs must be taken up by the governments and the chambers of commerce and the industry bodies to take the message to the citizens that globalization is ultimately a process that is similar to a rising tide that lifts all boats.
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What is Compassionate Capitalism and Why We Need it in These Times of Planetary Crisis ?
February 12, 2025
