GE-CW: THE CONTEMPORARY WORLD

Lesson 1: Introduction to the Study of Globalization

GLOBALIZATION

Globalization is a process of interaction and integration among the people, companies, and governments of different
nations, a process driven by international trade and investment and aided by information technology. This process has effects on
the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being
in societies around the world.

The Concept of Globalization

The concept of globalization is one of the most popular subjects of contemporary academic research. The interest for
global studies increased in the 1960s and 1970s. Various scholars introduced several approaches in understanding the notion of
globalization.

While they are motivated to formulate a universal conception of this phenomenon, this led them to certain divides as to
the lens(es) that best suit(s) in the study of globalization. In this lesson, the principal academic approaches to globalization as
presented by the leading global studies scholars since the 1990s are provided using the work of Manfred B. Steger (2014). His
presentation of these approaches ranges from the perception that globalization is little more than ‘globaloney’ to conflicting
interpretations of globalization.

Globalization as “Globaloney”

Proponents of this view contend that existing accounts of globalization are incorrect, imprecise, or exaggerated. This is
because globalists view everything that can be linked to some transnational process as evidence for globalization and its
growing influence. Hence, they suspect that such general observations reflect what is called as “globaloney” (Held & McGrew,
2007; Rosenberg, 2000; Veseth, 2010 as cited by Steger, 2014).

This description of globalization as ‘globaloney’ falls into three categories: (1) The first group disputes the usefulness
of globalization as a sufficiently precise analytical concept; representatives of this category are known as the Rejectionists; (2)
Members of the second group point to the limited nature of the globalizing processes, emphasizing that the world is not nearly
as integrated as many globalization proponents claim; these are the Sceptics; and, (3) The third group of critics disputes the
novelty of the process while acknowledging the existence of moderate globalizing tendencies; they are the Modifiers. To
examine their respective arguments in more detail, a tabular presentation of the work of Steger (2014) is presented below.

Table 1. Globalization as ‘Globaloney’

Categories of
Globalization as Arguments Weaknesses/Points of Improvement
‘Globaloney’
1. Globalization is an analytically 1.
impoverished concept (the same
as nationalism) because of its
complexity and ambiguity. This 2.
Challenge the academic community to provide additional
characteristic often leads to the
examples of how the term ‘globalization’ obscures more
legitimation of some claims
than it enlightens.
while delegitimizing the others
Rejectionists Complement the social-scientific enterprise of exploring
(Calhoun, 1993).
globalization as an objective process with more
2. Susan Strange (1996) considers
interpretive studies of the ideological project of
globalization as a vacuous term,
globalism.
suggesting that it has been used
in academic discourse to refer to
‘anything from internet to a
hamburger.’
Sceptics 1. They emphasize the limited 1. Hirst and Thompson set overly high standards for the
nature of current globalizing economy in order to be counted as “fully globalized.”
process. 2. Their efforts to construct an abstract model of a perfectly
2. Hirst, Thompson, and Bromley globalized economy unnecessarily polarize the topic by
(2009) asserted that the world pressuring the readers to either completely embrace or
economy is not truly a global entirely reject the concept of globalization.
economic phenomenon, but one 3. The most serious shortcoming of the Hirst-Thompson
centered on Europe, Easter Asia, Thesis lies in an attempt to counteract neo-liberal
and North America. Majority of economic determinism with a good with a good dose of
economic activity around the Marxist economic determinism.
world remains primarily national
in origin and scope.
3. Hirst and Thompson added that
without a truly global economic
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GE-CW: THE CONTEMPORARY WORLD
system, there can be no
globalization [Hirst-Thompson
Thesis].
4. Hirst-Thompson Thesis
emphasizes the “iron logic of
economic globalization.”
According to this, the iron logic
of economic globalization tends
to produce disempowering
political effects.
1. This group disputes the novelty 1.
of the process, implying that the
label ‘globalization’ has often
been applied in a historically 2.
imprecise manner.
A world system approach to globalization suffers from
2. Robert Gilpin (2000) confirms
the same weakness as the Marxist economic determinist
the existence of globalizing
view.
tendencies, but he also insists
Wallerstein (1990) leaves little doubt that he considers
that many important aspects of
global integration to be a process driven largely by
Modifiers globalization are not novel
economic forces whose essence can be captured by
developments.
economistic analytical models. Accordingly, he assigns
3. Moreover, neo-Marxist scholars
to culture and ideology merely subordinate role as ‘idea
and world system theorists such
systems” on the ‘real’ movements of the capitalist world
as Immanuel Wallerstein (1979)
economy.
and Andre Gunder Frank (1998)
argue that the modern capitalist
economy in which we live today
has been global since its
inception five centuries ago

Globalization as Economic Process

The scholars under this perspective explore in much detail how the evolution of international markets and corporation
led to an intensified form of global interdependence. Economic accounts of globalization convey the notion that the essence of
the phenomenon involves the “increasing linkage of national economies through trade, financial flows, and foreign direct
investment ... by multinational firms” (Gilpin, 2000 as cited by Steger, 2014). Moreover, according to this view, globalization is
a real phenomenon that signals an epochal transformation in world affairs and that, a quantum change in human affairs has
taken place as the flow of large quantities of trade, investment, and technologies across national borders has expanded from a
trickle to a flood (Gilpin, 2000 as cited by Steger, 2014).

The historical narratives that trace the gradual emergence of the new post-war world economy to the 1944 Bretton
Woods system and its post-war evolution are usually the core of studies of economic globalization (Schaeffer, 2005 as cited by
Steger, 2014).

Added also to this model are the following: (a) the role of multinational corporations; (b) the changing nature of the
production process and the liberalization and internationalization of financial transactions; (c) advances in data processing and
information technology that contributed to the explosive growth of tradable financial value (international capital flow); and (d)
the formation of global labor market (highlighting the role of Transnational Corporations (TNCs).

Globalization as Political Process

Most of the debates about political globalization includes the weighing of conflicting evidence regarding the fate of the
modern state. In particular, two questions have become the top agenda of the proponents of this perspective: (1) What are the
political causes for the massive flows of capital, money and technology across territorial boundaries? and (2) Do these flows
constitute a serious challenge to the power of the nation- state?

An influential group of scholars considers political globalization as a process intrinsically connected to the expansion
of markets. “Globalization has happened because technological advances have broken down many physical barriers to
worldwide communication which used to limit how much connected or cooperative activity of any kind could happen over long
distances.” As asserted by an even more extreme technological- determinist explanation, politics is rendered powerless in the
face of an unstoppable and irreversible technoeconomic juggernaut that will crush all governmental attempts to reintroduce
restrictive policies and regulations. The role of government will be ultimately reduced to serving as ‘superconductor for global
capitalism’ (Bryan & Farrell, 1996 as cited by Steger, 2014).

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The second group of scholars highlight the central role of politics in unleashing the forces of globalization. They
argued for the continued relevance of conventional political units, operating either in the form of modern nation-states or global
cities (Steger, 2014). Also, most of the proponents of this view understand that the development of the last few decades has
significantly constrained the set of political options open to states, particularly in developing countries. Jan Art Scholte (2005)
as mentioned by Steger (2014) points out that globalization refers to the gradual processes of ‘relative deterritorialization’ that
facilitate the growth of ‘supra-territorial’ relations between people. However, he emphasized that this deterritorialization does
not mean the extinction of state as the main organizing force in the world. The core message of this group is loud and clear:
politics is a crucial category upon which rests a proper understanding of globalization (Steger, 2014).

The third group of scholars suggests that globalization is motivated by a mixture of political and technological factors.
John Gray (1998) cited by Steger (2014) mentioned that ‘globalization is a long-term technology- driven process whose
contemporary shape has been politically determined by the world most powerful nations.’

The fourth group of scholars perceives political globalization primarily from the notion of global governance. Scholars
in this group analyze the role of various national and multilateral responses to the fragmentation of economic and political
systems and the transnational flows permeating through national borders (Steger, 2014). There are scholars who believe that
political globalization might facilitate the emergence of democratic transnational social forces emerging from a thriving global
civil society.

Martin Shaw (2000) as mentioned by Steger (2014) emphasized ‘the role of global political struggles in forming a
‘global revolution’ that would lead to an internationalized, rights-based Western state conglomerate symbolically linked to
global institutions.’

This is furthered by the democratic theorist John Keane who coined the term ‘cosmocracy’ which means a messy and
complex type of polity understood as ‘a conglomeration of interlocking and overlapping sub- state, state and suprastate
institutions and multidimensional processes that interact, and have political and social effects on a global scale (Steger, 2014).

Globalization as Cultural Process

Any analytical account of globalization would be woefully inadequate without an examination of its cultural
dimensions (Steger, 2014). John Tomlinson (1999) a sociologist, emphasized the centrality of culture to contemporary debates
on globalization. He states that ‘Globalization lies at the heart of modern culture; cultural practices lie at the heart of
globalization.’ This perspective answers the following questions: (1) Does globalization increase cultural homogeneity, or does
it lead to greater diversity and heterogeneity? (2) Does globalization make people alike or more different? (3) How does
dominant culture of consumerism impact the natural environment?

Tomlinson (1999) defines cultural globalization as a ‘densely growing network of complex cultural interconnections
and interdependencies that characterize modern social life.’ He argued that global cultural flows are directed by powerful
international media corporations that utilize new communication technologies to shape societies and identities. Culture no
longer remains tied to fixed localities such as town and nation but acquires new meanings that reflect dominant themes
emerging in global context (Steger, 2014).

Additionally, various scholars argued that these processes led to the rise of an increasingly homogenized global culture
underwritten by Anglo-American value system which is also known as “cultural imperialism.” The American sociologist
George Ritzer coined the term “McDonaldization” to describe the wide-ranging process by which the principles of fast-food
restaurant are coming to dominate more and more sectors of American society, as well as the rest of the world (Steger, 2014).

Cultural theorist Arjun Appadurai (1996) identifies five conceptual dimensions or ‘landscapes that are constituted by
global cultural flows: (1) Ethnoscapes, (2) Finanscapes, (3) mediascapes, (4) technoscapes, and (5) ideoscapes. Each of these
‘scapes’ contain the building blocks of new ‘imagined worlds’ that are assembled by historically situated imaginations of
persons and groups spread around the globe (Sterger, 2014).

Political scientists such as David Held, and Anthony McGrew articulate in their writings the need for effective global gover
structures as a consequence of various forces of globalization. A number of critics to this perspective boils down to the claim
Held and McGrew indulged in an abstract idealism that fails to engage with current political developments on the level of p
Some critics assert that the emergence of private authority has increasingly become a factor in post-Cold War world; glo
collective actors like religious terrorists and organized criminals are not merely symptoms of the weakening state, but their a
also dim the prospects for the rise of cosmopolitan democracy. Moreover, the cultural lens of the possibility of cosmopol
democracy is left unexplored (Steger, 2014).
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 The Global Interstate System

Weber (1997) describes the state as a compulsory political organization with a centralized government
that maintains the legitimate use of force within a certain territory. On the other hand, the concept of nation
emphasizes the organic ties that hold groups of people together and inspire a sense of loyalty and belonging-Le,
ethnicity, language, religion, and others (Schattle, 2014). Combining these two, a nation-state can then be
defined as a political community that emanates from civic society to legitimately execute peace. Thus, the civic
society is the basis of the people's oneness.

Though some scholars like Appadurai and Ohmae claim that globalization has superseded the individual
function and jurisdiction of nation-states, this is still arguable. In fact, they still play vital roles in the way
globalization establishes a borderless world. Nation-states can manipulate competitive advantages with
international and political issues transnational civil society organizations, and multinational companies. On the
other hand, they are also accountable for a host of international norms and standards, find themselves in
subordinate positions to protect their economy, and face new kinds of pressures of supranational integration and
focus of local fragmentation (Schattle, 2014). However, if nation- states no longer have power in today's
globalized world, then why does the United Nations (UN), with its increasing number of states, remain relevant
in global decision making? The 194 member states of UN prove that globalization has affected the dynamics of
nation-states in the context of their agency as legitimate holders of force in their jurisdiction. Globalization has,
in a way, reshaped the role and functions of nation- states as governing bodies in their particular territories.

First, globalization is seen to impose a forced choice upon nation- states. Either they conform to the
neo-liberal ideas and free-market principles of deregulation, privatization, and free trade or run the risk of being
left behind in terms of development. Of course, the nation-states, in this contemporary age, are forced to submit
themselves to the demands of globally accepted free-market principles. Friedman in Steger (2005) claims that
nation-states are in danger of losing important elements of economic sovereignty because of the notion that neo-
liberalism is beyond contestation as an aspect of globalization. In other words, nation- states still exist but lose a
part integral to their economic development and let global corporations control their economic movement.
Though government policies can be put in place, nation-states are forced to realign their policies to be
congruent with the principles of free trade because of the pressures from global corporations. To illustrate, the
member states of the Association of Southeast Asian Nations (ASEAN), including the Philippines, established
the ASEAN Free Trade Area (AFTA) in 1999. Its goal is to encourage the member-states to deepen their
commitments in investment, trade, and industrial collaboration to brace them for the increase in the region's
economic activity.

The second effect of globalization on nation-states is the establishment of economic and political
integrations. One good example is the European Union (EU) and the North America Free Trade Agreement
(NAFTA). EU has become a supranational body with 28 members. It has a single currency and monetary
system among 17 states, parliament with legislative powers, with common citizens' rights to live, work, vote,
and run for office, with developed collective mechanism to resolve crises and assist those in need, and with
intercontinental jurisprudence in the case of the European Court of Justice and the European Court of Human
Rights. The statehood of the members is not dissolved, what has changed is only how the nation-states function,
in terms of economy and politics, as part of a whole (Schattle, 2014).

The third effect of globalization is the establishment of international laws and principles. This is
observable in the establishment of the UN that operates as a forum for nation-states to air their differences and
try to resolve them. The UN Security Council has powers that include the creation of peacekeeping operations
and international sanctions and the authorization of military action. Also, UN's International Criminal Court
(ICC) prosecutes individuals accused of crimes against humanity such as genocide. The founding of ICC is
based on the adoption of the Rome Statute of International Criminal Court in 1998, with the vote of 120 to 7,
with 21 abstentions. It began functioning in 2002 when the statute officially came into force. However, the
United States, China, and India are not signatories. Thus, the treaty is not binding to these economic powers.
Moreover, there are also universal principles that are adopted by nation-states in relation to the dynamism of
globalization. Two of them are the Universal Declaration of Human Rights that affirms an individual's rights
and the other is the United Nations Convention of the Law of the Sea that defines the rights of nation-states on
the use of the world's oceans.

These three mentioned effects are vertical effects. Aside from this, globalization also has a horizontal
effect which can be observed in the formation of transgovernmental Networks (Slaughter, 2004). National
government offices connect with their counterparts in other nation-states in order to establish linkages that
would benefit all parties. These linkages are informal institutions that connect legislators, finance ministers, and
other valuable individuals who are significant in carrying out various country aspects of global governance. As
institutions, policies are agreed upon and individual state-participants are conscious that their home c policies
should not be violated.

The fourth effect of globalization is the rise of transnational activism (TNA). Such happens when
activist groups of nation-states connect with their counterparts in other states. For example, an advocacy-based
organization in the Philippines may connect itself with and get support from other human rights groups in
Europe to pressure the Philippine government to realign its stance and actions in upholding human rights. When
a nation-state recognizes international interventions and changes its behavior in response to international
pressure, it reconstitutes the relationship among the nation-state, its citizens, and international actors (Keck &
Sikkink, 1998).

The fifth and last effect of globalization is the creation of new communications network. Globalization
binds communities through digital media. With new technologies in communication, political interaction can
happen in a virtual sphere. People can exchange political perspectives through the internet, therefore stirring
political discourse on an online. platform. Because of the so-called network society (Castells, 2009), nation-
states must reshape themselves to become part of global networks in the arena of finance, education, science,
technology, arts, and sports. This can be seen in the proliferation of online education from universities outside
the Philippines. Conversely, Philippine universities offer online courses to non-Filipinos. Thus, digital media
has become the platform for strategic communications at home and abroad wherein the nation-states can utilize
the internet to gather feedback from the citizens. Social media gives people the power to air their sentiments,
and also, serves as an avenue to discuss issues. Government websites can also be avenues to formally forward
concerns to particular government offices. Many nation-states also establish their own state-funded television
networks for information dissemination as alternative to the well-established privately-funded news networks.
In the case of authoritarian and repressive states like China, Russia, and North Korea, the governments make
use of media technologies to filter content that can be viewed by their citizens. On the other hand, digital media
can also be used by governments to gain public support in their campaigns. Thus, social media, in particular,
can become an alternative to mainstream media that advances its biased perspective.

In order to facilitate connections among nation-states, intergovernmental organizations (IGOS) were

established. Their aim is to foster strong economic, political, cultural, educational, and technical
intergovernmental relationships. The Association of Southeast Asian Nations (ASEAN), European Union (EU),
and World Trade Organization (WTO) are examples.

Established in 1967, the Association of Southeast Asian Nations (ASEAN) now has 10 member states.
Its aims are 1) to accelerate economic growth, social progress, and cultural development in the region; 2)
promote regional progression; 3) advance peace and sustainability; 4) promote active and beneficial cooperation
and mutual assistance on matters of common interest in the economic, technical, cultural, administrative, and
scientific fields; 5) provide assistance to each other in the framework of training and research installations in the
educational, professional, technical, and administrative spheres; 6) work hand in hand for more effective and
greater use of agriculture and industries; 7) advance Southeast Asian research; and 8) preserve close and
beneficial collaboration with current international and regional institutions with similar aims and purposes
(asean.org). Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar, and Cambodia
are the members of ASEAN.

The European Union (EU), an IGO with 28-state members, was established in November 1993. Its
goals are 1) to promote peace, its values, and the well-being of its citizens; 2) offer freedom, security, and
justice without internal borders; 3) uphold sustainable development based on balanced economic growth and
price stability; 4) combat social exclusion and discrimination; 5) promote scientific and technological progress;
6) enhance economic, social, and territorial cohesion and solidarity among member countries; 7) respect cultural
and linguistic diversity; and establish an economic and monetary union (europa.eu).

The World Trade Organization (WTO) has 164 member-states. It is the sole IGO that caters to rules of
trade on a global scale. Its objective is to ensure that trade runs as smoothly, predictably, and freely as possible.
It also encourages trade by lowering trade barriers that may hinder how products and services flow from nation
to nation.

Some other examples of IGOS are the International Criminal Court (ICC), North Atlantic Treaty
Organization (NATO), and Organization of Petroleum Exporting Countries (OPEC). All IGOS serve purposes
based on the common interest of their member-states that is deemed beneficial to all parties involved.

The intensification of relations among nation-states gave birth to the idea of internationalism and
globalism. The former is the theory and practice of interdependent collaboration while the latter is an attitude.
Internationalism is basically anchored on the opinion that nationalism should be outrun because links that bind
people of different countries are more powerful than those that disconnect them (Anora, 2014). Moreover, in
order to avert wars, Immanuel Kant (1795) stated that agreements among nations must be reached. He
conceptualized the idea of liberal internationalism which proposes that nations must give up their freedom and
submit to a larger system of laws that is embodied by common international principles. He believed that a form
of global government is needed to create and enforce these laws. On the other hand, Giuseppe Mazzini (1805-
1872) assumed that nationalism and international cooperation complemented each other. He believed that
cooperation among nation-states is essential. Equally, US President Woodrow Wilson (1856-1924) thought that
nations were subject to the universal laws of God that could be discovered through reason. He adopted the
principles of self-determination, democratic government, collective security, international law, and a league of
nations in his concept of internationalism. Socialist internationalism, on the other hand, contradicts liberal
internationalism. This form of internationalism is based on the view that capitalism is a global system and that
the working class must unite as a global class to forward the struggle against capitalism. The notion of socialist
internationalism is linked to the goal of a world revolution-to end class struggle globally. The Second
International (1889-1916), the original socialist international, was an organization of labor and social parties
established in Paris in 1889. It is best known for declaring the International Worker's Day (May 1) and
International Women's Day (March 8) and for initiating the campaign for the eight-hour work day.

On the other hand, globalism emerged as an attitude that seeks to understand all the interconnections of
the modern world and to highlight patterns that underlie them. It pursues to describe and explain a world that is
characterized by a network of connections that span multi- continental distances.

Overall, the global interstate system is a facet of contemporary political globalization that seeks to
form collaboration among nation- states through the establishment of intergovernmental organizations. It is
rooted on the idea of internationalism. Experts on interstate relations cannot discount the numerous effects of
neoliberalism on the rise of new communication networks utilized by governments.
 Market Integration

After the Second World War, almost all countries around the world faced the great challenge of bringing
their feet back on the ground. As a substitute to the unsuccessful League of Nations, the United Nations (UN)
was established on October 24, 1945. Primarily, it was tasked to promote international cooperation and to
restore international order. Earlier in 1944 at the Monetary and Financial Conference in Bretton Woods, New
Hamsphire (US), the first government-sponsored international financial institutions were established-the World
Bank (WB) and the International Monetary Fund (IMF). There are two types of international financial
institutions: intergovernmental and private. The WB is an intergovernmental institution. Its aim is to end
extreme poverty and promote shared prosperity in a sustainable way (worldbank.org). There are five
organizations that belong to the WB Group, namely, the International Bank for Reconstruction and
Development, International Development Association, International Financial Corporation, Multilateral
Investment Guarantee Agency, and International Center for Settlement and Investment Disputes. These
organizations facilitate the granting of loans and financial assistance to developing countries. The IMF, also an
intergovernmental institution, works to foster global monetary cooperation, secure financial stability, facilitate
international trade, and more (imf.org/en/About). Like the WB, it also grants financial assistance and loans to
developing countries.

In the 1960s, regional development banks were established: the Asian Development Bank (ADB) in
1960 and the African Development Bank (AfDB) in 1964. These two are intergovernmental financial
institutions that were created to spur social progress and economic growth in order to address and reduce
poverty. As financial institutions, ADB and AfDB are anchored on the goal of fostering sustainable
development in their respective member countries.

There are also private international financial institutions such as Citigroup and Merrill Lynch.
Citigroup is an American multinational investment banking and financial corporation. It is the fourth largest
bank in the US (citigroup.com). On the other hand, Merrill Lynch is the wealth management division of the
Bank of America. Both institutions provide investments around the world. Investments can be in the form of
foreign direct investments, stocks, or financial loans.

Both intergovernmental and private financial institutions help facilitate the functionality of a global
economy by lending money to their member states and global corporations. For example, the World Bank helps
in project lending, establishes structural reforms, provides support and technical assistance, and helps design
modern and durable social safety nets for the benefit of both developed and developing nations (Stiglitz 1998).
It also provides international capital like foreign direct investments, short-term capital, and long-term
investments. The International Monetary Fund, on the other hand, helps establish institutional bodies to address
and reduce poverty like the African Regional Technical Centers (AFRITACS) in 2001, and assists in creating
the conditions for mobilization of private domestic and foreign capital and job generation growth (Kohler,
2002). Moreover, the Asian Development Bank lends money for the building of infrastructures that leads to
growth in business (Oxfam.org.au, 2013). Clearly, these global institutions are active agents in fostering social
and economic development by providing various forms of help to improve the national and the global
economies.

Global market integration did not happen overnight. It was the result of the establishment of a global
economy that involved the homogenization of trade and commerce. Prior to the trends in globalization of the
20th century, international trade and exchange of goods and services were already practiced. Harvey (1990)
sees that cities and countries were able to extend their reach beyond borders and patterns of trade and
technology because of developments in shipping and navigation. This was observable in the development of
maritime transport throughout history. Colonialism and imperialism rose as the new ways of putting order to the
economic interrelationships among countries. Equity, corporate ownership, management subsidiaries, and
central headquarters which supply and distribute goods and services were established through colonialism. The
Spanish government in the 1600s, for instance, made use of its colonies like the Philippines and Mexico as
suppliers of its resources for trade.

The integration of the global market started when big American corporations began to emerge after the
Second World War with the rise of new conglomerates. International Telephone and Telegraph bought Avis
Rent-a-Car, Continental Banking, Sheraton Hotels, and Hartford Fire Insurance (American History, 2018).
Later, Japan and Europe followed suit. Japanese global automobile corporations like Toyota, Nissan, and Isuzu
took off after the giant American companies flourished. These companies prospered as the primary and global
makers of trucks for the Japanese military (Dower, 1992). Renault automobiles, a French multinational
automobile manufacturer, was also used to help in the military post- war operations. The rise of American,
Japanese, and European global corporations paved the way for the further development of international trade.
Iwan (2012) identifies the differences among international, multinational, transnational, and global companies:

 International companies are importers and exporters with no investments outside their home
countries.
 Multinational companies (MNCs) have investments in other countries, but do not have a coordinated
product offering in each country. They are more focused on adapting their products and services to
each individual local market.
 Global companies have investments and are present in many countries. They typically market their
products and services to each individual local market.
 Transnational companies (TNCs) are more complex organizations that have investments in foreign
operations, have a central corporate facility but give decision-making, research and development, and
marketing powers to each individual foreign market.

American corporations operating internationally were at a great advantage after the war for they had no
competition. They had the capacity to produce, organize, and distribute products because America was not
devastated by the war. Literatures officially traced the start of the contemporary market integration from the
return of the Japanese and European corporations to the global market. It was acknowledged in 1974 that the
major global economic actors were MNCs. Collectively, they were described to be a particular corporate form
to dominate global production and exchange (Neubauer, 2014). Caroll (2003) termed the emergence of
international, multinational, global, and transnational companies in the United States (US), the European Union
(EU), and Japan as the triad-the major economies of the world.

Gereffi (2001) identifies three structural periods in the existence of global corporations after the war.
They are investment-based period (1950-1970), trade-based period (1970-1995), and digital globalization
(1995 onwards). The development of global corporations can be examined from the sources and the levels of
foreign direct investments (FDIs). The United Nations Conference on Trade and Development (UNCTAD)
defines FDIS as funding made to acquire lasting interest in enterprises operating outside the economy of the
investor in which their purpose is to gain an effective voice in the management of the enterprise (UNCTAD,
2011). In 1960, UN cited FDIS as the major drivers of global corporate development and in 1990, FDIS tripled
(Hedley, 1999). With this, around 20,000 new corporate alliances were formed in a span of two years (Gilpin,
2000). During the trade-based period, global corporations were controlled by producer-driven commodities. As
a result, firms were characterized by large amounts of concentrated capital focused on large-scale or capital-
intensive manufacturing. More so, digital globalization affected the operation of global corporations since
technology became integrated in both production and consumption. Producer-driven value streams have
integrated their corporate structures to reduce the effects of time and distance in the production and
consumption of goods while buyer-driven value streams have changed the behavior of corporations in retailing
their goods and services via the internet (Neubauer, 2014). As Cammett (2006) observed, designing, ordering,
factory processing, inventory, delivery, branding, and advertising are driven by digital operations since the
1990s.

The ascent of global corporations is a reflection of a globalized market integration. TNCs and MNCs are
no longer limited to their home countries. They are able to expand their reach to other continents and countries.

These global corporations have common attributes. Neubauer (2014) identifies three of them-an agent of
desired economic development, an economic prominence, and a very powerful entity that can create a crisis.
These corporations may hit their target of economic development by making their consumer products available
in many parts of the globe. An example is Nestlé. Some TNCs and MNCs were only able to reach their global
annual growth target by exploiting the environment. In the Asian Financial Crisis of 1997, global corporations
brought chaos to the economy of the Asian region by controlling the foreign direct investments that resulted in
the increase of real estate values, aggressive government infrastructure projects, and huge corporate spending all
funded by bank borrowings.

On the whole, international financial institutions play an important role in the social and economic
development programs of developing and transitional nations. They are instrumental in the functionality of the
global economy which is reliant on global corporations.
 Contemporary Global Governance

Today, global governance makes world affairs systematic, secured, and formulaic. Weiss & Thakur
(2014) describe global governance as the totality of norms, laws, policies, and bodies that define, comprise, and
facilitate transnational relations between citizens, states, cultures, intergovernmental, and non-governmental
organizations. Rules and norms put everything in order. Though global governance is rule-based, it has no
central authority. However, there are systems for international relationships that bind the states, people, and
society together.

Since the United Nations (UN) has the most number of members among the established global systems,
this section discusses its organs, roles, and functions. UN is composed of six organs. The General Assembly is
the central deliberative and the only organ where all member-states have equal representation in discussion and
consideration, and policymaking, The Security Council is the organ which has the commitment to preserve
peace and security. The Economic and Social Council is the main organ for cooperation, policy review, policy
dialogue, and advice on social, economic, and environmental issues. The Trusteeship Council is the organ
tasked to administer international oversight for 11 trust territories and to make sure that adequate procedures are
taken for independence and self-government. The International Court of Justice is UN's prime judicial organ.
The Secretariat is the organ tasked to execute the daily activities as assigned by the five other organs.

The United Nations was established after the Second World War with one central mission-to maintain
international peace and security. Currently, with the world being faced with numerous issues that threaten peace,
UN serves as an actor in confronting these. In 1948, UN was responsible for bringing human rights into the
realm of international law through the Universal Declaration of Human Rights. UN is also a space for its
members to manifest their perspectives through its core organs and committees. The organization has become
an instrument for governments to identify spaces of agreement and resolve problems collectively by enabling
the exchange of opinions between and among its members and by hosting consultations.

Aside from maintaining international peace and security and protecting human rights, UN also carries
the functions of delivering humanitarian aid, promoting sustainable development, and upholding international
law.

The organization utilizes good offices, diplomacy, and mediation. It does peacekeeping processes in
countries with domestic conflicts and peace-building tasks in countries freed from conflict, lessening the risk of
reversing into conflict and setting the groundwork for sustainable peace and development. It agrees on the
global battle against terrorism and works for the removal of nuclear weapons and other instruments of mass
destruction. All of these are executed to maintain international peace and security.

In order to protect human rights, UN scrutinizes situations and issues reported to them and oversees the
exercise of international human rights agreements. It takes responsibility for reviewing, monitoring, reporting,
and commending human rights from a country-based perspective. It approaches human rights energy within the
UN development system and boosts awareness of the reasons and acts of genocides, warns relevant players
where there is a danger of genocide, promotes, and mobilizes for relevant action. Ultimately, it governs the
conceptual, institutional, political, and operational advancement of the Responsibility to Protect.

In delivering humanitarian aid, UN is responsible for coordinating responses to emergencies and

supports rapid humanitarian response for people affected by natural disasters and armed conflict.

The Millennium Development Goals was set to promote sustainable development. In 2015, this was
changed into the Sustainable Development Goals (SDGs). These goals are the blueprint to achieve a better and
more sustainable future for all. This collection of 17 global goals covers social and economic issues including
poverty, hunger, health, education, global warming, gender equality, water sanitation, energy urbanization,
environment, and social justice.

In order for international laws to be upheld, UN settles legal disputes referred to it by the member-states.
It also accords advisory opinions on questions that are of legal nature submitted by legitimate UN organs and
particular agencies.

The Security Council's veto power over resolutions is one of the challenges that UN has been facing
since the organization's foundation. For example, the UN resolution in December 2017 that required US
President Donald Trump to withdraw the recognition of Jerusalem as the capital city of Israel was vetoed by the
United States in the Security Council. In effect, the resolution was not passed. Some states refuse to adopt
resolutions and statements especially since the membership is on voluntary basis. The new government of
Lebanon openly defied the Security Council's many resolutions on the Israeli-Lebanon conflict. In 2017, the
Philippines voted against a United Nations General Assembly committee draft resolution on the human rights
crisis in Myanmar concerning the Rohingya people. These challenges seem to hinder some of the functions of
UN. Furthermore, Weiss and Thakur (2014), in their article titled. The United Nations Meets the Twenty-first
Century: Confronting the Challenges of Global Governance, identify challenges confronting UN based on
knowledge, norms, policy, institutions, and compliance:

1. In terms of knowledge, UN, is underappreciated regarding how its convening capacity and mobilizing
power are utilized to help funnel and consolidate knowledge from outside and ensure its discussion and
dissemination among governments.

2. The contrasting moral structures of social behavior in different member-states complicate the
formulation of a normative standard that can be applicable to all.

3. In formulating propositions, problems occur when only the member-states are heard. UN belittle the
helping hand of non-governmental organizations (NGOs) and the global public opinion. Sometimes,
recommendations are not executed.

4. Institutions can also be places where ideas are cornered and left behind. The modality and processes for
enforcing compliance with international norms and laws are not present. In fact, some UN staff
members violate, cheat, and challenge them.

Despite the establishment of global norms and international laws that nation-states should follow, the
nation-states are still relevant for there will be no intergovernmental organization without them. Also,
international and multinational agreements are designed by the states and propelled by the initiatives that they
undertake. As Bertucci & Alberto (2018) affirm, the sovereignty of nation-states in the midst of globalization
has not been diminished for the cooperation and converted action among nation- states represent the greater
exercise of their sovereignty. Furthermore, the nation-states remain to be active agents of local and transnational
realms of concern.

To conclude, contemporary global governance defines the political scope of globalization. Cooperation
among nation-states is the only way to reform and advance the roles and functions of interstate relationships
despite real challenges being faced by United Nations.