External Business Environment
Scramble for Africa
The Scramble for Africa was the proliferation of conflicting European claims to African territory during the New Imperialism period between the 1880s and the start of World War I (). The Scramble for Africa began in 1881, when France moved into Tunis with Bismarck's encouragement. After centuries of neglect, Europeans began to expand their influence into Africa. Soon, it took on a full-fledged land grab in Africa by European Powers. This came to be called the Scramble for Africa. There are many reasons why this occurred.
The Scramble for Africa was powered not so much by conditions in Africa, but by the economic, social and political conditions in Europe during the second half of the nineteenth century. In economic terms, it was "not so much as an overproduction of goods in Europe as an undersupply of raw materials".
The scramble was fierce by July 1884 as France, Britain, Germany and Portugal had all staked claims on African territory within the previous five years.
From November 15, 1884 to January 20th, 1885, The Berlin Conference, under the chairmanship of , was convened to set up the rules of the Scramble. On February 26, 1885, the decision had been made that first of all, any sovereign power which wanted to claim any territory should inform the other powers in order to make good any claim of their own. Secondly, any such annexation should be validated by effective occupation. Third is that treaties with African rulers were to be considered a valid title to sovereignty. In addition, the powers were free to navigate the Congo and Niger Rivers.
In the past, according to (2000), African states were robbed of their natural and human resources by the colonial powers. Belgium's built his fortune on the wholesale extraction and export of rubber, hardwoods, and metals from the Congo. Zambia, Zimbabwe, and South Africa, met a similar fate, as did the oil-rich states of West Africa. However, since the fall of the colonial powers, resource extraction has been largely the province of the post independence leaders in which many of whom followed the lead of their former colonial masters to create vast personal fortunes (, 2000).
For a fact, Africa is vastly rich in natural resources but the continent has paid a terrible price for this wealth. In the past decade horrendous wars in Angola, Sierra Leone, the Democratic Republic of Congo, Sudan and Liberia have been fuelled by fighting for control over diamonds, timber, gold, minerals and oil.
Private interests from warlords to unscrupulous corporations to arms dealers and organized crime have helped to fuel African conflicts over the past decade as they vie for control over valuable resources. According to (2001), globalization has added a key dimension to contemporary warfare and armed groups from some of the world's most remote places can be directly linked with commerce in the technological heartland of metropolitan society. He added that a complex international network of smugglers, brokers and traders means that everything from diamond rings and garden furniture to the components of mobile phones and Play stations may have originated as the booty of Africa's conflicts.
, Sierra Leone's UN ambassador, said in July 2000, “We have always maintained that the conflict is not about ideology, tribal or regional difference. The root of the conflict is and remains diamonds, diamonds and diamonds” (, 2000). According to (2002), in a quarter of the roughly 50 wars and armed conflicts active in 2001, resource exploitation has played a key role. (2000) concluded that a poor country with weak infrastructure, few options for making money and possessing significant lootable resources is four times more likely to experience war than a similar country without them.
Mcluhan’s Concept of Global Village
In Mcluhan concept of Global Village, he theorized that because of rapid electronic communication systems, the Earth has become a village in which we have all become neighbors ( 1999).
The concept of a global village by (1964) is interconnected by an electronic nervous system, part of our popular culture well before it actually happened. was the first person to popularize the concept of a global village and to consider its social effects. His insights were revolutionary at the time, and fundamentally changed how everyone has thought about media, technology, and communications ever since. In addition, the underlying concept of McLuhan's view of electronic technology is that it has become an extension of our senses, particularly those of sight and sound. The telephone and the radio become a long distance ear as the television and computer extend the eye by projecting further than our biological range of vision and hearing.
McLuhan argues that it is the speed of these electronic media that allow us to act and react to global issues at the same speed as normal face to face verbal communication. He concludes we are forced to become aware of responsibility on a global level rather than concerning ourselves solely with our own smaller communities because as he states, “we are electrically contracted; the globe is no more than a village. Electric speed at bringing all social and political functions together in a sudden implosion has heightened human awareness of responsibility to an intense degree” (, 1964).
In addition, (1967) states that time has ceased, space has vanished and we now living in a global village in a simultaneous happening. McLuhan suggests that through our extended senses we experience events, as far away as the other side of the world, as if we were there in the same physical space. McLuhan assumed that the entire population of the globe is plugged in to communications technology to the same extent.
Anti-globalization Movement
The anti-globalization movement is an effort to counter perceived negative aspects of the current process of globalization. Although adherents of the movement often work in concert, the movement itself is heterogeneous and includes diverse, sometimes opposing, understandings of this process, alternative visions, strategies and tactics.
According to (2001), the current anti-globalization movement has roots in the nonviolent direct action movement, with which it shares a structure based on small autonomous groups, a practice of decision-making by consensus, and a style of protest that revolves around mass civil disobedience. Each of the major organizations of the nonviolent direct action movement began with great promise but soon went into decline, in large part due to the structural and ideological rigidities associated with insistence on consensus decision-making and reluctance to acknowledge the existence of leadership within the movement.
Epstein argued that anti-globalization movement’s main focus is not on stopping globalization but transforming the terms on which it takes place, and it shades into the domestic anti-corporate movement. She added that the main target of the anti-globalization movement is corporate power, not capitalism, but these perspectives do not necessarily exclude one another. Moreover, the anti-globalization movement provides focus and momentum, and holds out more hope for a revival than any other movement.
Laissez-faire Economics
Laissez-faire Economics is defined as an approach to economics that asserts the importance of the free, competitive market of individual suppliers and individual purchasers to the efficient production, distribution, and allocation of goods and services as well as to the maximization of individual choice, and emphasizes the need to keep state regulation to a minimum ( 1998). In The Wealth of Nations, (1776) argued that though individuals in the market would pursue their own self-interest, the market's ‘invisible hand’ would lead to the realization of the common good.
However, this view is criticized because it takes no account of considerations such as environmental degradation except in so far as it might increase costs or social justice. Furthermore, the models of the workings of the free market, on which laissez-faire economics are based, bear very little relation to reality; in the real world, markets are distorted by monopolies, lack of choice through cultural constraints, and imperfect information (, 2004).
([1949] 1966) refers laissez-faire as an ideology of the old liberal economists. This ideology, in his view, helped to eliminate the restrictions of medieval times, facilitates the emergence of a private property system and free enterprise. He states that laissez faire philosophy had opened the way for capitalism by utterly destroying the fallacies of restrictionism. Similarly, he added that "the laissez faire ideology and its offshoot, the 'Industrial Revolution,' blasted the ideological and institutional barriers to progress and welfare" ([1949] 1966). notes that laissez faire is as an ideology and that he speaks of progress.
Ways in which the phenomenon of globalization has changed and evolved over the past 120 years
Globalization is an umbrella term for a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence, integration and interaction between people and companies in disparate locations. The phenomenon has been noted since the 1980s in the context of sociological study on a worldwide scale ()
Globalization could be defined simply as the decline in costs of doing business internationally. One of its key effects is to enhance the international integration of markets for goods, services, technology, ideas, financial and other capital, and labor. An indicator of its progress is reducing differences in prices for those products and factors across space ( 1995).
According to (1999), there have been three technological revolutions in transport and communication costs in modern times. The cost of transporting goods was lowered enormously in the nineteenth century with the advent of the steam engine, which created the railway and steamship. Steel hulls for ships and refrigeration further lowered the real cost of ocean transport late last century, particularly for perishable goods. The telegraph has also helped. Second, the technological revolution also hugely lowered the cost of moving people. The third and current revolution in transport and communications technology, beginning towards the end of the twentieth century, is digital. Aided by the deregulation of telecom markets in many countries, it is lowering enormously long-distance communication costs and especially the cost of rapidly accessing and processing knowledge, information, and ideas from anywhere in the world.
Market liberalization has also begun with the lowering of import tariffs on trade in manufactures between industrial economies. In the 1980s, trade reform was followed by extensive liberalization of foreign exchange markets and of restrictions on financial capital flows, leading to the development of new varieties of internationally tradable financial security instruments. The 1980s also saw the deregulation of domestic markets in a growing number of countries, which reinforced the effects of deregulating transactions at national borders.
Economic reforms have included the better assignment of property rights. These reforms benefit most the countries making them, but they also benefit virtually all of their trading partners (, 1992; , 1993). Hence the more countries open up and reform, the greater are the gains to other countries from doing likewise. In particular, they expand the opportunities for developing and transition economies to access goods and services markets, investment funds, and technologies, thereby raising the pay-off to those economies from joining the bandwagon of liberalization. According to (1991) and (1999), the reasons for faster growth of more open economies are related to the dynamics of trade liberalization, something which is not just an abstract idea from new trade and growth theory.
References
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