Work Stress and Coping in the Era of Globalization

Rabi S. Bhagat, James Segovis, Terry Nelson

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781136584343
• Edition: 1
• Topic: Psicologia
• Subtopic: Psicologia in industrie e organizzazioni

This book examines the phenomena of how individuals experience work stress andcoping in both developed and developing countries in the world. Rabi Bhagat, known for his cross-cultural scholarship in this area, and his co authors, help us recognize the causes and consequences of work stress. They present a systematic, comprehensive review of this topic with plenty of practical insights and case studies examining work stress and coping in the era of globalization. Researchers, practitioners and students in the field of industrial organizational psychology, organizational behavior, and human resources management will find this book of interest.

Chapter 1

An Introduction to Globalization: Organizational and Human Consequences

Merriam-Webster’s new international dictionary included the term globalization in 1961. According to the dictionary, globalization as a term was being used from 1951. Its earliest meaning and the most widely understood connotation was on the spread of the global economy to regional economics around the world. It involves deepening of relationships and broadening interdependence among people of dissimilar nations and cultures. The term can mean many different things to different people, but in its essence it focuses on the integration of various countries to international trade and free flow of capital, information, and people across countries and political boundaries. Making efficient use of cheaper foreign labor markets is also a major objective in the process of the economic facet of globalization.

The process of growing relationships and economic interdependence among people across dissimilar nations and cultures is much older than 1951, having occurred throughout recorded human history and before. The term globalization not only is being used by university professors, professional managers of multinational and global corporations (i.e., MNCs), and government officials but also is in daily use throughout the world. It has been referred to as mondialisation in French, globalisierung in German, or Quan qui hua in Chinese. Various news articles, television programs, and best-selling books such as The Lexus and the Olive Tree (Friedman, 1999), The World Is Flat (Friedman, 2005), and The World is Curved (Smick, 2008) use the term globalization on a regular basis to refer to the growing interconnectedness of the various economies of the world. Ohmae (1995) refers to globalization as the absence of national borders and barriers to trade among nations. It has also been described as a shift in traditional patterns of international production, investment, and flow of capital, goods, information, and people among dissimilar nations. Scholars of international management and global strategy propose that the process of globalization is a set of practices that facilitate economic transactions among various countries. Based on their ideas, we define globalization as follows:

Globalization is a process whereby worldwide interconnections in virtually every sphere of activity are growing. Some of these interconnections lead to integration/unit worldwide; others do not. Together global interconnections and the relationships they forge represent a historically unprecedented process that is rapidly reshaping the context for many activities. The result is blurred boundaries within and between organizations, nations, and global interests. (Parker, 2005, p. 5)

This book is about globalization and how it affects work organizations that are either actively participating or are seeking to actively participate in the global marketplace. Multinational and global organizations employ workers in their worldwide subsidiaries and export their products and services to consumers in both developed and developing countries. From the perspective of economic trade, when global corporations invest in developing countries it creates jobs and improves income levels. Scholars are in general agreement that globalization is essential for economic development and uplifting the standards of living in developing and emergent economies such as the BRIC countries (Brazil, Russia, India, and China).

In the process of developing worldwide connections, multinational and global companies develop various kinds of links and relationships on a regular basis— involving people who work in them, governmental and nongovernmental agencies and organizations, and social and political institutions. Over 180 countries are members of the World Trade Organization (WTO), and the increasing levels of economic interdependence among a large number of them (including multinational corporations) is a major aspect of globalization. Multiple relations interconnect different types of economic, political, social, and cultural environments of different societies that affect people and social institutions in myriad ways. Examples of globalization are the evolution of similar types of preferences for music, cell phone designs, and video games. Emergence of identical or nearly identical tastes in music preferences among young adults is a good example of how globalization affects people and societies uniformly in various dissimilar geographical and cultural locales.

Worldwide spread of common economic interests is growing on a continuous basis. This happens because we live in a world where the infrastructure of global communication connects our lives regardless of the physical distance involved. Globalization refers to a state of the world that involves networks of interdependence among organizations of different types and from industry sectors and located at various geographical regions. The linkages occur because of flows and influences of capital and goods, information and ideas, people, and forces as well as environmentally and biologically relevant substances (e.g., pollutants or pathogens) that are relevant for the physical climate of the globe. Processes of globalization and deglobalization refer to the increase or decline of the worldwide spread of mainly economic activities. However, other aspects of globalization are critical for the study of work and organizational stress and coping.

Interdependence and globalization are both multidimensional phenomena that should be studied from economic as well as other aspects. Important facets need to be considered for a complete discussion of the nature of globalization and its affect on multinational and global companies.

Facets of Globalization

■ Economic globalization involves exchange of capital, goods, and services over networks involving long distance relationships among various organizations located in different parts of the globe. It also involves the movement of information and data to facilitate market exchanges. Worldwide coordination of the processes that are linked to these flows such as developing organizational and institutional linkages among various low-wage production facilities in, for example, Asia or Latin America for generating goods and services for the more developed markets in the United States, Japan, and Western Europe is also considered an important facet of the economic globalization. The globalization of production, which has been promoted by MNCs though assisted by financial institutions and governments in developed countries, is a good example of this facet of globalization. The invention and diffusion of new technologies not only for advancing agricultural production but also for high-tech electronic and biochemical products and services is another good example that has major consequences for the second facet of globalization dealing with social and cultural consequences.

■ Social and cultural globalization involves the exchange of ideas and information and the people who carry ideas and information with them. Examples include transfer of scientific knowledge and technologies across national and cultural boundaries. Diffusion of practices, values, and institutional procedures of an advanced and globalized society to other nations is also considered social and cultural globalization. Imitation of Western societies’ (e.g., United States, United Kingdom, France) dominant values, practices, and institutions by other non-Western countries is referred to as the isomorphic tendency of this facet of globalization. Such isomorphic tendencies in shaping the future developments in societies that are dissimilar from the West are vigorously debated both in theory and practice (Sassen, 1998). At a most profound level, globalization involving social, political, and cultural processes not only has the potential to influence the beliefs, attitudes, and values of people in dissimilar national contexts who may favor different forms of social and political organizations but also often succeeds in transforming these societies. These societies were relatively resistant to such changes in the past; however, with the promise of benefits of globalization (e.g., of the positive economic consequences), they have begun to appreciate the value of globalization.

Especially with the development of the Internet and computer-mediated technologies, the flow of ideas that have the potential either to change or to succeed in changing the beliefs and values of dissimilar societies takes place independently of economic globalization. It is important to note that the distinction of the aforementioned two facets of globalization is somewhat arbitrary. Economic globalization carries with it the potential for social, political, and cultural globalization and vice versa. The eleven countries and regions that have enjoyed the highest rate of economic growth in the process of globalizing their economies between 1980 and 2010 are China, India, Brazil, Singapore, South Korea, Vietnam, Taiwan, Oman, Malaysia, Thailand, and Indonesia. Coupled with an average growth rate of 5% to 9%, they have also experienced both major and minor social and cultural changes and transformations. It is necessary to point out that this second facet of globalization also has implications for fostering or slowing down the process of economic globalization.

Globalization: A Brief History

Since 1945, the United States has been the world’s dominant economic power. Even during the cold war (1945–1991), its economy was far more advanced than and more than twice as large as that of the Soviet Union. In addition, the United States has been the prime mover and supporter in the creation of a large number of multinational and global institutions such as the United Nations (UN), International Monetary Fund (IMF), and World Bank. In terms of sponsoring and benefiting from the economic aspect of globalization, the United States has been the most important global power and authority. The collapse of the Soviet Union in 1991 largely enhanced America’s already established preeminent economic position. The demise of its main adversary—the USSR—also resulted in the spread of both economic and political forms of globalization to territories and countries of the former Soviet Union bloc. The opening of the markets of the previous Soviet bloc countries such as Poland, the Czech Republic, Slovakia, and Hungary resulted in the further spread of globalization. Patterns associated with the U.S. type of globalization became the norm and were widely shared by a vast majority of the countries in Western and Eastern Europe, Asia, Latin America, Africa, and Australia. Even in the heyday of the British Empire in the nineteenth century, the United States enjoyed a wide reach of its economic sphere of influence. The dollar became the world’s preferred currency, and most global trade for the past 60 years has been conducted in U.S. dollars. Most countries including the People’s Republic of China (PRC) and Russia hold their reserves in it. The global position of the United States in terms of its military remains unsurpassed in every part of the world. Its global position in economics remained mostly unparalleled until the rapid growth of China during the past two decades.

The preeminent role up until 1945 was held by the countries of Western Europe, especially Britain, France, and Germany, and previously to a much lesser extent by Spain, Portugal, and The Netherlands. From the beginning of the industrial revolution in the late eighteenth century until the mid-twentieth century, European countries were shaping the economic developments of much of the nations in Asia, Latin America, Africa, and other parts of the world. The engine of Europe’s dynamism was “industrialization,” and it expanded its economic influence to various globalizing countries by expanding its colonial reach. Even as Europe’s position began to decline after World War I and more definitely after 1945, the rise of the United States as a global economic power continued with the same momentum of globalization with one exception: It was not a colonial power and has not been one in its history. However, the culture of the U.S. society has been largely a product of various Western European cultures with some influences from various countries of Africa. For over two centuries (i.e., 1800s and 1900s), Western civilization and culture has dominated much of the world.

However, we are now witnessing a historic change that, though still in its relatively early stages, is bound to transform the world. The developed world, that for over a century largely meant the West (namely, the United States, Canada, Western Europe, Australia, and New Zealand) plus Japan, is now being challenged in terms of its economic size by the developing world (“Playing Leapfrog”, 2006). In 2001, the developed countries’ accounted for over 50% of the world’s gross domestic product (GDP) compared with 60% in 1973. In other words, in a span of slightly over 25 years, the developed countries’ share of the global GDP declined by 10%. Scholars of globalization note that it will take a long time for even the most advanced country among the developing countries to acquire the necessary economic and technological sophistication of the developed countries. However, because of the developing countries’ collective share of the world’s population, their economic growth has been higher than that of the developed world, and their rise is resulting in a significant shift in the nature of globalization—particularly of the economic and cultural facets. Figures 1.1 and 1.2 depict the projected size of the national economies of the world in 2025 and in 2050. These predictions were made by Goldman Sachs, a global investment bank located in New York City, and are largely regarded as fairly accurate estimates of the changing economic contexts of the world. According to these predictions, the three largest economies in the world by 2050 will be China followed by a closely matched United States and India; the next four in order of importance will be Brazil, Mexico, Russia, and Indonesia.

It is interesting to note that only two Western European countries (the United Kingdom and Germany) have been projected to be among the top 10 economically important countries in 2050, according to one Goldman Sachs study (2009). The rank of the United Kingdom will be ninth, and Germany will be the tenth. Of the present G-7 countries, only 4 will appear in the top 10. PricewaterhouseCoopers (PwC), a global accounting firm headquartered in New York, predicts that the Brazilian economy will be larger than Japan’s and that the Russian, Mexican, and Indonesian economies will each be...