Running head: GLOBALIZATION AND REGIONALIZATION

Globalization and Regionalization

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Globalization and Regionalization

Regionalization is a term normally employed to describe the strategies focusing on a
regional or a local level of scale. Localization strategies focus on monetary, cultural and products
or services. An example is manufacturing and marketing of a specific product aiming at specific
market for instance an expensive private jet for a multimillionaire. Globalization is associated
with notion of strategies at global level. Examples for globalization strategies include free trade
zones, the use of a common currency, free trade zones and many more. Globalization entails
regional boundaries and their products are targeted for the entire world without focusing on
specific regions. An example of globalization for instance, Twitter and Facebook focus on the
entire world without any focus on any geographical region.
Globalization includes combined efforts to tackle the global scale problems such as
global warming. Globalization is a process of interaction among the people governments and
companies of different nations. The process is driven by the international trade and investment in
the world level which is aided by the advancement in information technology. The process has
major effects on the environment, political systems, cultures, prosperity and economic
development. Further, it has an effect towards human physical wellbeing in the societies around
the world. The phenomenon of globalization most of the time contested on empirical and
normative grounds. Regionalization entails dividing an area into smaller regional segments. For
instance regionalization is the division of nation to states and provinces. In business, the process
of regionalization is used as a business management tool as a way of making certain needs in a
particular area is met (Agenor and Pierre-Richard, 2004).

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Globalization is similar to regionalism in that they both are the product of the operation
of both national and international market under the influence of the theories of demand and
supply. Globalization and regionalization may be the center of attention in that they can be
pushed by the wealthier and more industrialized states of the northern countries. The concept of
globalization is mostly contested on empirical and normative grounds ((Agenor and PierreRichard, 2004).
"Globalization" is an extremely late term, just setting up its present importance in the
1970s, which "rose up out of the crossing point of four interrelated arrangements of 'groups of
practice': scholastics, writers, distributers/editors, and administrators". In 2000, the International
Monetary Fund (IMF) recognized four fundamental parts of globalization: exchange and
exchanges, capital and speculation developments, relocation and development of individuals, and
the spread of learning. Further, ecological difficulties, for example, a dangerous atmospheric
deviation, cross-limit water and air contamination, and over-angling of the sea are connected
with globalization. Globalizing forms influence and are influenced by business and work
association, financial matters, socio-social assets, and the regular habitat. Scholarly writing
ordinarily subdivides globalization into three noteworthy areas: financial globalization, social
globalization and political globalization.
Regionalization is the procedure of isolating a range into littler portions called locales.
One of the more evident case of regionalization is the division of a country into states or regions.
Organizations additionally utilize regionalization as an administration instrument and an
approach to verify that requirements novel to specific territories are met. In metropolitan

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territories a few issues can't be fathomed inside city limits, and choices made by one district can
impactsly affect different regions and the earth. While land has customarily been isolated by
political limits, to permit more productive procurement of taxpayer driven organizations and
popularity based representation, this has not loaned itself exceptionally well to compelling
administration of regular assets, urban framework, and other multi-jurisdictional frameworks.
Contamination and wasteful utilization of assets and foundation (land, water, air, living space,
fisheries, streets, utilities and so on.) are case of issues that overflow civil limits.
A notion in the world is that the world may break up to a regional trading blocs and
regionalism instead of globalization and may become a new phenomenon of the world. The
strategies for regionalization differ from globalization. Multinational Corporation develops a
global product for the entire world market and dominates local markets at every corner of the
world. Contrary, the notion fail to note various business activities of large companies takes place
in regional blocs opposed to single global market. Firms around the globe adopt a new slogan
with idea of think regional, and act local and forget global. Statistics after several researches
conducted around the globe shows the immense power for regional markets. All this is evident
where ninety percent of cars registered in Japanese nation are domestically manufactured. The
same is true for the cars sold in America, 85 percent are built in American factories. Strategies
for regionalization differs from globalization in the sense that various companies source
technology, goods, capital and information from around the world but business activities are
centered at specific cities.
Business thrives well when the market for the goods are localized. Localized markets
provide convenience as compared to tough conditions for marketing products on a global

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platform. It is evident that regionalism can take place at the same time as globalization evident in
certain amount of regionalization is likely to be given lower communications and transportation
cost associated with proximity due to geography. The field of political science has a greatest
stress in observing the effort that is extended on the regional economic integration effort as
opposed to global multilateral economic regimes.
Strategies for globalization and regionalization
Primary economic goal of globalization and regionalization aims at reducing available
barriers of trade for the purpose of enrichment of all societies. The two occur as important fields
that impede regulatory barriers between the sovereign entities. They lead to betterment of the
societies through free trade for each and every person provided that one has a freedom to
produce with comparative advantage and the processes of engaging in exchange with others.
Home based strategy Companies start their international expansion first by serving foreign
market from their home base. Companies that have moved to more complex regional strategies
rely on home base strategies. Home based strategies work well for instances where the
economies of concentration outweighs that of dispersion (Chortareas, Georgios, and Theodore
Pelagidis, 2004).
The portfolio strategy involves setting up operation that is out of home region but by the
end report directly to the home base. This is a good strategy for regionalized companies that seek
to establish presence outside the markets they can well serve from home. Portfolio strategy,
being a simple one takes a lot of time to implement especially when the company organically.
The Toyota Company took a lot of time trying to establish their operations in North America. A

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major blow to portfolio strategy for expansion is where the establishing company faces tough
rivals in the non-home country (Doyle, 2004).
Diffusion of technology: the advancement of technology in telecommunication
information technology and complexity in computing leads to diffusion of technology around the
globe. The increased diffusion in technology is an important strategy favoring both regionalism
and globalization. Technology serves the purpose of growing the trends of computer
developments in areas of artificial intelligence and high speed connections which include
wireless applications and integration with biotechnology. These strategies apply to the
globalization and the regionalization (Clott, 2004).
Globalization and regionalization entails threats and opportunities for the creation and
sustaining competitive strategies. Global managers have resolved many strategies to deal with
the globalization and regionalism. The centralization of core operations has been on the rise with
modifications for local adaptation. There is also advancement of transnational strategies for the
purpose of local and international orientation and integration. The managers for globalization and
regionalization needs to make decision which relate to internationalization processes. The
development of innovation in the home market, firms can take products which enter into the
plateau of a mature stage to new international market. These flows moves from developed to the
developing countries.

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References
Agenor, Pierre-Richard. "Does Globalization Hurt the Poor?" International Economics and
Economic Policy 1, no. 1 (2004): 2151.
Chortareas, Georgios E., and Theodore Pelagidis. "Trade Flows: A Facet of Regionalism or
Globalization?" Cambridge Journal of Economics 28, no. 2 (March 2004): 353271.
Clott, Christopher B. "Perspectives on Global Outsourcing and the Changing Nature of Work."
Business and Society Review 109, no. 2 (2004): 153170.
Doyle, Michael W. "The Challenge of Worldwide Migration." Journal of International Affairs
57, no. 2 (Spring 2004): 15.