The Sociology of Globalization by Luke Martell

Author:Luke Martell
Language: eng
Format: epub
ISBN: 9780745689807
Publisher: John Wiley & Sons, Inc.
Published: 2016-12-22T00:00:00+00:00

National location and varieties of capitalism

We have seen that, while many MNCs are international, there is a substantial extent to which they are embedded in their domestic economies, even in the case of some of the most transnational of MNCs. But how significant is it to be nationally embedded? MNCs could be nationally located but converging to a common global type. National locatedness could be significant in terms of the proportion of activities located in home economies. But this may not be the most significant force in their global behaviour. They could remain uninfluenced by national location, footloose and converging in a competitive global economy, following the common norms of multinational companies. However, the evidence suggests this is not the case. National location is not just quantitatively significant. It shapes and affects how companies and economies develop, and leads to a world in which diversity and difference coexist with global convergence and commonality. Sociological insights about the social embeddedness of economics and capitalism are illuminating here, and lead to sceptical conclusions about economic globalization.

Literature on diversities of capitalist behaviour compares types of capitalism such as Japanese and/or East Asian, European and Anglo-American (Albert 1993; Hutton 1995; Hall and Soskice 2001). There is a literature on welfare regimes along similar lines, adding Scandinavian types (Esping-Andersen 1989). Within these regional types there is significant national diversity.

Differences in company organization are linked to the national environment within which companies operate. Japan is seen to be a more collectivist and less individualistic society than, say, the USA or the UK, emphasizing loyalty to nation, family or firm. This, it is argued, is reflected in company behaviour, where there are said to have been strong and longer-term relations within and between firms, and between business and the state. Japanese capitalism is said to have risen on the basis of state intervention and a collectivist culture. In countries in East Asia, such as South Korea, Taiwan and Singapore, the state has played an important role in promoting development, alongside stronger relations within and between firms and the state. Social market capitalism in Germany and Scandinavian countries has been based on collectivist norms and arrangements, for example corporatist decision-making between business, government and workers, longer-term relations, less of a primary focus on shareholders, and more extensive welfare.

In Anglo-American countries and some post-communist states, the emphasis is on competition, with aggressive behaviour between firms, combined with a belief that the state should keep out of the economy rather than try to guide it. Shareholders are regarded as more important and planning tends to be short-term. Competitive individualism and liberalization of the economy are considered key to the dynamism of Anglo-American capitalism.

As globalization increases, such comparative differences may decline, with firms from different parts of the world learning from each other. But MNCs may also adapt their operations to fit with national differences where workers or consumers are located – the localization of globalization. Work organization may be adjusted to local cultures and norms, and goods or services to

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