TRAVEL EXECUTIVES’ PERCEPTIONS ON THE IMPACT OF

GLOBALIZATION ON CONTEMPORARY BUSINESS

Dr. J. Mark Munoz

Asst. Professor, International Business, Millikin University
1184 West Main St., Decatur, IL 62522 USA
Tel No : (217) – 420-6762
E-mail : jmunoz@mail.millikin.edu

Dr. Marios Katsioloudes

Professor of Management, St. Joseph’s University
Philadelphia, PA 19131
Tel No : (610) –660-1117
E-mail : katsiolo@sju.edu

Mr. Rory Barr

Student Researcher, Millikin University
1184 West Main St., Decatur, IL 62522 USA
Tel No : (217) – 420-6762
E-mail : rbarr@mail.millikin.edu

ABSTRACT

Business today is no longer as restrictive and as compartmentalized as it was in

the past years. Where the consumer of the past used to associate product quality with the
country in which it was manufactured, this “quality stereotype” is no longer used.
National boundaries no longer curtail the efficiency and speed of business transactions.
The world has become a global marketplace.

With globalization, business between nations of the world has grown and
increased, such that money flows rapidly in and out of nations, creating a situation in
which the countries of the world are highly interdependent on each other economically
and politically (Greenberg and Baron, 1997). A number of factors account for this event.
First, technology has drastically lowered the cost of transportation and communication,
thereby enhancing opportunities for international commerce. Second, laws regulating
trade has generally become less restrictive throughout the world. Third, developing
nations have sought to expand their economies by promoting exports and opening their
doors to foreign companies seeking investments. This trend has expanded opportunities
for economic growth and competition throughout the world (Greenberg and Baron,
1997).

In the light of the changes taking place in business and industry, the researchers
explored potential influences brought about by globalization.

Specifically, the study sought to determine the impact of globalization on

contemporary business as perceived by the travel executives and members of the Pacific
Asia Travel Association in the context of the following theories advanced by Thomas L.
Friedman: (1) That in our present era, the way we do business is far different compared
to the period prior to the Cold War era; (2) That there has been a marked change in the
way one communicates with others; (3) That there has been a dramatic change in the
investment approaches of individuals; (4) That technology has paved the way for
changes in the business environment; and (5) That countries need to implement strategic
measures when coping in a global environment.

The travel executives were singled out in the study for reasons of linguistic
congruency, since the travel executives were proficient in English. Perspective was a
factor because the travel executives had very likely traveled to many parts of the world.
Multicultural exposure was another factor because the travel executives had likely been
in contact with several races and cultures. Cross-involvement was taken into account
because the travel executives had been involved in multifarious activities and transactions
with diverse people from numerous sectors. Lastly, technological aptitude was
considered because due to the nature of the work they performed, the travel executives
were familiar and updated with advances in technology.

INTRODUCTION

Business today is no longer as restrictive and as compartmentalized as it was in the past

years. Where the consumer of the past used to associate product quality with the country in
which it was manufactured, this “quality stereotype” is no longer used. It is no longer meaningful
to refer to an “American product,” a “German product” or a “Japanese product” (Hill, 1994:6).
National boundaries no longer curtail the efficiency and speed of business transactions. The
world has become a global marketplace. In the global business environment, diversity
predominates.
Consequently, the recruitment of employees is no longer confined to national borders.
The concept of diversity of the workforce is now emerging. Rice (1994:78) declares that the
management of diversity has been linked to such benefits as improved productivity and lower
employee turnover and other costs related to human resources. On the part of management,
international human resource management practices and activities have become important. A
strategic approach requires understanding and working with differences to gain from each
employee (Wright and Noe, 1996:245).
The concept of global competitiveness becomes more understandable and more
meaningful in today’s business transactions and production of goods and services. No longer is
there an exclusive claim to quality because in a global environment, no country has a monopoly
of excellence in production. Likewise, a single norm is applied for judging the quality of
consumer products. The globalization of markets is taking place; along the same line, the
phenomenon of globalization of production is the by-word of manufacturing. Regarding the
globalization of markets and production, Hill (1994:5-6) observes:
“With regard to the globalization of markets, it has been agreed that we are moving
away from an economic system in which national markets are distinct entities, isolated from each
other by trade barriers and barriers of distance, time and culture, and toward a system in
which national markets are moving into one huge global marketplace. According to this view,
the tastes and preferences of consumers indifferent nations are beginning to converge on some
global norm.”
Hill (1994:6) adds that in connection with the globalization of production, it has been
observed that increasingly, individual firms are dispersing parts of their production process to
various locations around the globe to take advantage of national differences in the cost and
quality of such production factors as labor, energy, land, and capital. As a result, the demand for
highly-skilled workers has accelerated.
Concomitant to the globalization of markets and of production is the increasingly global
competitiveness that has brought about changes in the management of quality. Increasing global
competition and the uniformity of quality of specifications even with the diversity of production
sites have given rise to emphasis on quality and continuous improvement (Bartol and Martin,
1998:30). This program is known as total quality management (TQM), a management
philosophy that is driven by the constant attainment of customer satisfaction through the
continuous improvement of all organizational process (Robbins, 1998:15).
With globalization, business between nations of the world has grown and increased, such
that money flows rapidly in and out of nations, creating a situation in which the countries of the
world are highly interdependent on each other economically and politically (Greenberg and
Baron, 1997:37
Globalization definitely has an impact on people with different types of business pursuits.
It is a challenge to the resourcefulness, initiative and creativity of the contemporary business
person. In the organizational aspect, globalization has caused many business and industrial firms
to be competitive in global markets. At the same time many organizations have been termed
“hollow corporations” or firms that contract out most of its manufacturing (Stahl, 1995:74).
It is clear that today’s organization has discarded bureaucracy in favor of networking. In
the light of changes taking place in business and industry, the researchers sought to find answers
to many basic questions on how much globalization has changed the economic situation of the
world and what impact it has on contemporary business as perceived by a number of travel
executives throughout the world. For this purpose, this study is conducted.

THEORETICAL FRAMEWORK
In order to acquire a definite sense of direction in conducting this study, the researchers
review the literature on globalization and discuss the implications in the section entitled the
Changing Global Landscape.
The framework of this study is based on the theory of Pulitzer Prize winner Thomas L.
Friedman. Friedman (2000:31-33) uses the analogy of the Lexus and the olive tree. The Lexus
represents a fundamental, age-old human drive - - the drive for sustenance, improvement,
prosperity and modernization - - as it is played out in today’s global system. The Lexus
represents all the burgeoning global markets, financial institutions, and computer technologies
with which we pursue higher living standards today. The olive tree represents everything that
roots us, anchors us, identifies us, and locates us in this world - - whether it be belonging to a
family, a community, a tribe, a nation, a religion, or most of all, a place called home. It makes
one a complete person because it identifies a person linguistically, geographically and historically.
Friedman’s main theme is the triumph of the Lexus over the olive tree. This victory is known as
globalization.
Friedman (2000:9) defines globalization as the inexorable integration of markets, nation-
states and technologies to a degree never witnessed before - - in a way that is enabling individuals
to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is
enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper,
cheaper than ever before.
Friedman further explains that the driving idea behind globalization is free-market
capitalism - - the more one lets the market forces rule, and the more one opens the economy to
free trade and competition, the more efficient and flourishing one’s company will be.
Globalization means the spread of free market capitalism to virtually every country in the world.
Therefore, globalization also has its own set of economic rules - - rules that revolve around
opening, deregulating and privatizing one’s company in order to make it more competitive and
attractive to foreign investment.

CHANGING GLOBAL LANDSCAPE

Friedman (2000) advances that globalization has five features: (1) In our present era, the
way we do business is far different compared to the period prior to the Cold War era; (2) There
has been a marked change in the way one communicates with others; (3) There has been a
dramatic change in the investment approaches of individuals; (4) Technology has paved the way
for changes in the business environment; and (5) Countries need to implement strategic measures
when coping with a globalizing world.
Global Business
Globalization is characterized by a kind of business in which changing competitive
structures are paralleled by shifts in demand characteristics in markets throughout the world.
Cateora and Graham (1999:2) declare that with the increasing globalization of markets,
companies find that they are unavoidably enmeshed with foreign customers, competitors and
suppliers, even within their own borders.
Furthermore, many companies are now seeking foreign markets. Companies with
existing foreign operations realize that they must be more competitive to succeed against foreign
multinationals. They have found it necessary to spend more money and time improving their
marketing positions because competition for these growing markets is intensifying.
Cateora and Graham theorize that an outstanding feature of global business is the global
marketing aspect. In global marketing, companies treat the world, including their home market,
as one market. In contrast to the multinational or international market that views the world as a
series of country markets (including their home market) with unique set of market characteristics
for which marketing strategies must be developed, a global economy develops a global strategy to
reflect the existing commonalities of market needs among many countries to maximize returns
through global standardization of its business activities - - whenever it is cost effective and
culturally possible.
Furthermore, as Cateora and Graham (1999:22) expound it, the global marketing concept
views an entire set of country markets (whether the home market and only one other, or the home
market and 100 other countries) as a unit, identifying groups of prospective buyers with similar
needs as a global segment and developing a marketing plan that strives for standardization
wherever it is cost and culturally effective. This might mean a company’s global marketing plan
has a standardized product but country-specific advertising agenda.
Changes in Communication
Consciousness of cultural diversity and the language of international business have made
changes in the way in which people communicate with one another. A common global strategy
entails the adaptation of advertising messages to suit local markets. This strategy is described as
communication adaptation (Kotler and Armstrong, 1999:596).
Communication adaptation has gained adherence in spite of the international scope of the
English language because not in all countries can English be used. Kotler and Armstrong
(1999:596) observe that may United States multinationals have had difficulty in crossing the
language barrier, with results ranging from mild embarrassment to outright failure. The
multinational enterprise must carefully screen its brand names and advertising messages to guard
against those that might damage sales or offend consumers in specific international markets
(Kotler and Armstrong, 1999:596).
In the sphere of advertising, media need to be adapted internationally because media
availability varies from country to country. In addition, the global business person should be
aware that cultural differences can cause barriers to communication. Communication can make
or unmake the global marketer.
Changes in Investment Approaches
There was a time when planning was very much emphasized in business. There was little
flexibility in the programs and plans for entry into any kind of business. Today, investment
programs can be tentative in nature and scope. Cateora and Graham note that many companies
begin tentatively in international marketing, growing as they gain experience and gradually
changing strategy and tactics as they become more committed (Cateora and Graham, 1999:17).
Malone and Laubacher (1998) predict that in the future, as communications technologies
advance and networks become more efficient, “electronically connected freelancers” (e-lancers)
or investors who are not affiliated with specific business organizations may proliferate. Should
that indeed take place, the dominant business organization of the future may not be a stable,
permanent corporation but rather an elastic network that may sometimes exist for no more than a
day or two. Investments can be temporary and investors can change loyalties and commitments.
 Small, independent companies may form coalitions. These design coalitions take many
forms. Some are organized as joint ventures; some share equity among their members; some are
built around electronic markets that set prices and wages.
Malone and Laubacher (1998) further predict that a shift to an e-lance economy would
bring about fundamental changes in virtually every business function, not just in product design.
Technology and Change
Globalization has accelerated with advances in technology. Hill (1994:9) believes that
the lowering of trade barriers made globalization of markets and production a theoretical reality.
Beamish and others (2000:134) observe that managing a far-flung international business requires
extensive communication in order to maintain organizational control. Advances in computer and
fax technology have made such communication easier and less costly.
Comparing the technological advancement of the twentieth century with that of the
twenty-first century, Malone and Laubacher (1998) observe that the coordination technologies of
the industrial era - - the train and the telegraph, the automobile and the telephone, the mainframe
computer - - made internal transactions not only possible but also advantageous. The
management of large corporations was centralized and were therefore provided with economics
of scale in manufacturing, marketing and distribution. It was economically viable to directly
control many different functions and businesses and to hire a large number of administrators and
supervisors needed to manage them. In contrast, the communications technology of the present
has shrunk the world.
Malone and Laubacher (1998) note that with the introduction of powerful personal
computers and broad electrical networks - - the coordination technologies of the twenty-first
century, the economic equation changes. Since information can be shared instantly and
inexpensively among many people in many locations, the value of centralized decision-making
and expensive bureaucracies decreases. Individuals can manage themselves, coordinating their
efforts through electronic links with other independent parties.
Strategic Measures for Coping in a Globalized Environment
Firms use a number of strategies in order to maintain their competitiveness. Those that
are not able to improve the quality of their products and services have gone out of business.
One strategy used by industrial firms is the making of the “hollow corporation” or a firm
that contracts out most of its manufacturing. Most consumer electronic products bought in one
country were produced in foreign countries (Stahl, 1995:77). Many U.S. managers move in the
direction of offshore manufacturing and become hollow corporations because of some factors.
The important forces influencing a firm’s decision to pursue global manufacturing operations - -
cost competitiveness, competitive markets, -government policy, and manufacturing processes.
Factors in cost competitiveness include the relative cost of labor, materials, transportation
and exchange rates. Competitive markets become a reason to pursue global manufacturing
operations as foreign competitors enter U.S. markets and as international markets grow.
Government policy that lowers trade barriers encourages global manufacturing
operations. Sometimes fear of import restrictions from a host government causes a firm to decide
to locate manufacturing facilities in the host country so that the manufactured items escape the
import restrictions. Improved manufacturing technologies and processes have been associated
with the decision to pursue global manufacturing operations. Automation, the extensive use of
information technology, and high quality manufacturing systems permit many firms to pursue
worldwide operations with efficiency (Stahl, 1995:77-78).
Rue and Byars (1992:129) define global strategies as the alternatives chosen by a
particular organization in order to compete in global industries on a worldwide, coordinated basis.
Five global strategy options are available to business firms. These options include product
standardization, broad-line global strategy, global focus strategy, national focus strategy, and
protected niche strategy. Product standardization involves producing and selling a product that
has passed quality specifications throughout the world. Broad-line global strategy involves
engaging in worldwide competition in the full product line of the industry. This strategy involves
product standardization. A global focus strategy involves selecting a particular segment of the
industry in which a business competes on a worldwide basis. For this purpose, a business
organization standardizes its products in order to attain global competitiveness. A national focus
strategy involves focusing on particular national markets to take advantage of national market
differences. Products are suited to the needs of specific countries with their distinct culture and
national character. The business firm might also become the overall low-cost producer in serving
the unique needs of a particular national market. A protected niche strategy involves a business
firm’s forging agreements with countries where government policies limit the number of global
competitors entering the country (Goshal, 1987:425).

RESEARCH METHODOLOGY
The researcher collected data regarding the respondents’ perceptions on business in
general, on communication and information, on finance and investment, on technology, on
government and economy, the psychological impact of globalization, an on international
education.
Each of the statement in the opinionaire corresponds to a five-point Likert-type scale.
The respondents were advised to indicate, as they chose, the scale representing their response to
each statement. The quantitative and qualitative scales were 5 for Strongly Agree (SA), 4 for
Agree (A), 3 for Undecided (U), 2 for Disagree (D), and 1 for Strongly Disagree (SD).
Since the purpose of the study was to determine the central tendency of the responses to
each statement, the researcher determined the weighted mean of each statement.
In order to arrive at a definite interpretation of the respondents’ central tendency, the
researcher assigned the following hypothetical mean range to the scales in each item:
Range Scale
4.21-5.00 Strongly Agree (SA)
3.41-4.20 Agree (A)
2.61-3.40 Undecided (U)
1.81-2.60 Disagree (D)
1.00-1.80 Strongly Disagree (SD)

The data were recorded on tables showing the frequencies and percentages of responses
under each item in The various dimensions of the opinionaire. The weighted mean, as well as its
qualitative equivalent was also recorded, presented, analyzed and interpreted.

STUDY RESULTS AND DISCUSSION

The tables referred to in this section are presented at the end of the paper.
Table 1 - Perceptions on business in general
As a whole, the respondents strongly agreed to the statements pertaining to business, as
indicated by the factor average of 4.27. Specifically, the travel executives strongly agreed that
“in our present time and era, the way we do business is far different as compared to the time
prior to or during the Cold War.” They affirmed that the issue of balance of power between the
United States and the USSR has already been resolved. At present, the world is united and
business revolves around free trade, thus encouraging every country to come up with the best
products, manufactured toward withstanding global competitiveness.
Agreement was indicated by the respondents to the statement that “it is easier to start
and operate a business today than it was thirty years ago.”
Globalization has minimized if not obliterated the restrictions on foreign trade. Beamish
and others (2000:135) observe that for the past fifty years, declining tariffs and the emergence of
regional trading blocs have had an enormous impact on world trade and investment. Commercial
liberalization policies have been adopted by numerous governments since their participation in
the General Agreement on Tariffs and Trade (GATT). The promotion of multilateral cooperation
has been nurtured by the World Trade Organization.
The travel executives agreed that “the appropriate organizational structure in a
globalized system is anchored on decentralization.” The respondents were referring to a pre-
globalization trend in which multidomestic affiliates to a parent company were formed in
different countries. The multidomestic affiliates were headed by local nationals as country
managers whose performance was evaluated by criteria associated with key result areas directed
toward making a profit center out of each affiliate.
This concept had remained with the respondents because this practice predominated for a
number of years. However, in reality, the global company is anchored, not on decentralization
but on integration. Companies form a global product division structure in which affiliates around
the world are not autonomous. Instead, they become an integrated part of a global organization
and often do not perform an independent role (Beamish and Others, 2000).
The travel executives strongly agreed that “the business cycle is faster as a result of
globalization.” The acceleration of the product cycle is possible with the cooperation of
participating government. If in accordance with the theory of Porter (1990), the governments of
the various countries increase their investments in education, infrastructure, and basic research,
and adopt policies that promote competition within domestic markets, the quality of national
products would be suited for international markets. Consequently, the product sells faster.
Furthermore, the business cycle is faster in countries with first-mover advantages, such as when
they are credited as the pioneer in the manufacture of a fast-selling commodity in the world
market.
Strong agreement was shown by the travel executives to the statement that “in a
globalized system, it is easier to formulate and market brands that have cross-cultural appeal.”
For this reason, it is necessary to take note of the principle advanced by Cateora and Graham
(1999:85), that the successful marketer needs to be a student of culture.
Table 2 - Perceptions on communication
The travel executives agreed that “our present world has resulted to changes in the way
we communicate with others.” Today, communication is accelerated by various mediums.
Friedman (2000) believes that in the early part of the twentieth century, everyone will have access
to high-speed, broadband Internet communications right in their home or office or handheld
notepad or beeper. Friedman (2000:67) calls this evolution the “democratization of
information.”
The respondents agreed that “globalization has resulted to our ability to reach out to
people in other countries in a faster, deeper, cheaper manner.” The low cost of communicating
by telephone, by fax, the Internet, radio and television - - and selling products through these
media - - characterizes the twenty-first century.
Agreement to both statements was demonstrated by a factor average of 3.78.
Table 3 - Perceptions on finance and investment
The factor average of 3.63 generally denotes the respondents’ agreement to most of the
statements pertaining to finance and investment.
The travel executives agreed that “the globalized system had changed the way one
invests.” Investments today are rendered convenient and expedited through online brokers.
Friedman (2000) notes that the whole world operates like Wall Street because global
investing has become easier and more accessible. The ability of online investors to move
resources globally has an economic impact on a country was a principle to which the respondents
agreed.
Disagreement was expressed by the travel executives to the statement that “globalization
has encouraged companies to invest in and explore opportunities worldwide.” In the context of
the unrest that takes place in some parts of the world today, one can see the reasons why the
respondents disagreed to the statement. Needless to say, investors observe the political and legal
climate of different countries before they decide to make investments in specific countries. Other
investors may consider violations of human rights, curtailment of civil rights, and military rule as
a basis for refusal to invest in other countries.
The travel executives agreed that “there is a need for the standardization of accounting
and financial systems worldwide.” They favored a uniform accounting system in which instead
of keeping accounting records and preparing financial statements in varying currencies and
systems a common methodology could expedite transactions and contribute to accuracy.
Table 4 - Perceptions on technology
The travel executives agreed that “companies that do not modernize or have top-notch
technologies would likely fail.” Their agreement is predicated on the idea the use of best
technologies is imperative in a highly competitive business environment.
The respondents agreed that “globalization requires companies to restructure to take
advantage of new technologies.” This finding implied that the respondents were aware of the
need to adopt a new structure especially in the creation of global product divisions. Beamish and
Others (2000) elaborate that when global product divisions take over, they tend to achieve direct
lines of communication into key markets and can therefore get their product and market know-
how to the field unimpeded. Organizational adaptation needs to accompany innovation.
The respondents agreed that “the greater a country’s bandwidth, the greater the
likelihood of its prosperity.” The respondents were therefore aware of the importance of
communication technology in a country’s involvement in the global marketplace. High-speed
broadband Internet communications facilitate instant access to communicators all over the world.
If a country has greater bandwidth, its business deals will be facilitated.
Agreement was signified by the respondents to the statement that “countries exporting IT
and services would likely become more prosperous than those who export basic raw materials.”
The respondents showed awareness of the important role performed by information technology in
a country’s future. Because of the need for high-speed cost-efficient communication brought
about by the urgency of global business, information technology would have a strong demand.
The factor average of 4.02 denotes that the travel executives generally agreed to the
statements in this category.
Table 5 – Perceptions on government and economy
The respondents agreed on the role of the government in globalization, as indicated by
the factor average of 3.95.
The respondents strongly agreed that “the best system in our globalized world is free
market capitalism.” This response validates the principle advanced by Friedman (2000) that the
driving idea behind globalization is free-market capitalism - - the more a country allows market
forces rule and it opens its economy to free trade and competition, the more efficient and
flourishing its economy.
Strong agreement was signified by the respondents to the statement that “the globalized
system has knocked off previous barriers between countries.” This response means that with the
encouragement of free trade and unrestricted travel, homogeneous groups of customers around
the globe have been created. Except for some preferences that have become multi-domestic, the
preferences of many consumers tend to become less localized or provincial and approach a global
standard (Johansson, 1997).
The respondents agreed that “globalization has forced governments to strengthen their
digital infrastructure to be globally competitive.” Termed by Friedman (2000) the
“democratization of information”, the deregulation of communication media has allowed many
countries to experience a breakthrough in the dissemination and acquisition of information.
Governments have to use the Internet as a framework to facilitate cross-border communication
flow and information access.
The travel executives agreed that “there is a need for an e-government.” This response
meant that the respondents were aware that in this a need to use technology to heighten
interaction between a government and its constituencies. Indecision was shown by the travel
executives regarding the statement that pertained to the “need for more strategic alliance and
regional integration among countries.” Their uncertainty was brought about by the fact that
while regional integration is desirable and definitely the ideal situation in any world order, it is
not possible to integrate all countries into a strategic sphere. With some countries, barriers
relating to culture, technology, law, unevenness of trade benefits could militate against massive
and absolute globalization.
The travel executives agreed that “countries need to brand, market, and sell themselves
as investment destinations.” A country that seeks to become an investment destination needs to
highlight positive influences, and downplay or eliminate what may be perceived as negative to
the global community.
The respondents agreed that “a country’s cultural and environmental foundation has an
impact on its attractiveness to global investors.” Part and parcel of the general appeal that a
country projects is its exotic flavor and protective attitude towards the environment.
That countries should “absorb cultural influences of other cultures to adapt and be
enriched in our globalizing world” obtained the strong agreement of travel executives. It is
necessary, therefore that intercultural differences be accepted and be taken as a part of the efforts
to thrive in a global society.
There was strong agreement to the statement that “globalization has created a more open
and unified global market for many goods and services.” The travel executives recognized the
role of globalization in the integration of business activities such as global marketing, global
finance, global production, and global branding. Theodore Levitt has made reference to world
markets that are driven “toward a converging commonalty” such that “the global corporation sells
the same thing in the same way everywhere (Levitt, 1983).
Table 6 - Perceptions regarding the psychological impact of globalization
The factor average of 3.85 revealed their agreement to the statements in this dimension.
Strong agreement was shown by the travel executives to the statement that “globalization
has set in at our world today, and most of what we do have international repercussions.” This
finding has a number of implications. First, globalization affects every individual’s way of
perceiving his or her qualifications to be fitted to the purposes of globalization.
Second, globalization affects the way in which people view technology. Where in the
past, technology was associated with the privileged few, most business people today view
technology as indispensable.
Third, anyone who has a tendency to resist change will, at last accept that lifestyle
modifications and alterations in ways of doing things have become necessary. This realization
tends to ingrain into people the spirit of creativity, alertness, innovation, and the acceptance of the
importance of interconnectivity.
The respondents agreed that “the globalized system has changed the way I perceive the
world to be.” The respondents realized that the world is no longer composed of isolated countries
and individuals working toward individual survival and sustenance. Instead, they perceived the
world to be highly interconnected in a way in where people and countries completely open
themselves to a global web of business activities and relationships. The world today integrates
people, systems and philosophies into a dynamic whole and opens itself to heightened forms of
interaction.
The respondents agreed that they “felt pressured and threatened as our world further
globalizes.” This threatening feeling is psychological in the sense that it assails those who think
that they may be unprepared for globalization. The pressures to excel, to engage in global
competition, and to meet current international standards are felt by many individuals. This
environment may lead to feelings of anxiety and insecurity in individuals and organizations.
Indecision was shown by the travel executives pertaining to the statements that “there is
a risk that those who are left behind in a globalizing world will create chaos and a backlash.”
With their anxiety and feelings of pressure regarding globalization, the travel executives were not
sure that a backlash against globalization could create a chaotic world. The respondents
recognized the need for acceleration of technology, improvement of systems, and management of
quality in order to survive in a globalizing world. However, they doubted that the reactions to
globalization would be violent, even if it means that those who are slow to change and to develop
would be left behind without economic advantages.
Table 7 - Perceptions on international education
The factor average of 3.84 denoted that the respondents generally agreed to the
statements under this factor.
They strongly agreed that “the academe has a major role to play in educating and
preparing the youth to cope with our globalizing world.” They acknowledged the important role
of the academic sector in revolutionizing technology, imparting radical theories of economics and
trade, and refining the students’ skills and competencies so that they could cope with the rapid
trend of globalization. The respondents showed confidence in the capabilities of academic
institutions to promote among people a better understanding of globalization and its features, to
encourage research on globalization, and to clarify the role of individualized in a globalized
world.
The travel executives strongly agreed that “studying in another country would heighten
an individual’s chance of succeeding in a globalized world.” The respondents affirmed the
importance and value of experiential learning in other countries. Studying in another country
provides the learner with opportunities to enhance networks, build relationships, understand other
cultures, learn new technologies and operational approaches. It allows the learner to appreciate
and work through a different environment. Moreover, it trains individuals to embrace diversity
and helps build confidence in cross-border business activities.
The travel executives agreed that “online education is an effective methodology in
providing educational access across borders.” They affirmed that unbounded knowledge could
be gained through on-line education. The Internet can be a tool to spread out knowledge and
information. Robey and Sales (1994) suggest that there is a need for executives of global
organizations to pursue higher education within the ethical context of global business.
However, the respondents were uncertain that “they would spend over $500 for a relevant
short term course offered by an academic institution in another country via the Internet.” The
respondents’ uncertainty may be attributable to costs, mistrust, and feared technological
incompatibilities.

IMPLICATIONS
From the results of the study, it is clear that globalization has an impact on contemporary
business in the sense that it affects the way in which business is transacted, the speed of
communication flow, finance and investment strategies, technological advancement, and
government principles and investment strategies.
In the light of the great influence of globalization on global stakeholders as a whole, it is
necessary for those concerned to plan ways by which business practitioners can cope with a
global environment. These strategies consist of making out of one’s firm a learning organization,
implementing total quality management, and cultural adaptation.
An executive seeking to engage in international business must develop a learning
organization. A learning organization is one whose competitive advantage is not only lodged in
existing assets and capabilities, but in the ability of the organization to innovate, to create new
products, to develop new markets, to adopt new distribution channels, to find new advertising
media, and to discard outdated products and tired sales routines (Johansson, 1997).
The executive needs to introduce innovations in order to cope with global
competitiveness. However, before any innovation can be introduced, the executive must study
the environmental, social, and psychological factors that influence the acceptance of any product.
No matter how “global” a product is, adjustments must be made to suit the taste and temper of the
market. Furthermore, the manager should note that an innovative product might change
consumer tastes and preferences and even relationships. For instance, in some countries, the
computer is perceived to be a promoter of personal isolation and alienation.
There are instances in which products are modified to fit the needs of a multicultural
market. Cateora and Graham (1999:345) emphasize that as companies gain more experience with
the idea of global markets, the approach is likely to standardize where possible and adapt where
necessary. There are global brands like Coca-Cola, Kodak, Sony, Marlboro and Kleenex that
have gained worldwide acceptance. Even then, they make country specific adaptations that
deviate from the original product in order to be acceptable in some countries.
The contemporary executive should explore new markets, especially emerging markets
that comprise the newly democratized countries and the developing countries. The exploration
process can begin with market research and environmental scanning, since the political climate of
developing countries may be characterized by uncertainty. Subsequently, the executive can
introduce new product, develop new niches, and adjust pricing schemes to satisfy different types
of customers.
The adoption of new distribution channels may require new techniques of selling,
depending on the culture and economic situation of the new channel. If the channel is a
developing country, the technique of selling may be adjusted to the buying patterns of consumers.
For instance, the fast food chain that offers a combination of food items and a drink to be
consumed in one meal can find a channel of distribution comprising workers living on modest
wages.
Various advertising media are open to global organizations. However, the type of
advertising media that are appropriate to specific countries should be used. In countries with a
high literacy rate and monopolistic management of television outfits, print media are effective
channels of advertising. In countries where the literacy rate ranges from average to low, radio
and television advertising are appropriate. In poor countries, radio advertising is effective
because every family has a radio set.
Products that can no longer be used - - because their use is time-consuming and incurs
other expenses - - should be rejected. For instance, flannel diapers for infants are going out of
use. Some products have to be phased out of the market to accommodate the demand for new
and cost-efficient products.
Executives who aim to compete in the global market have adopted a total quality
management philosophy. Four important techniques are adopted. They ensure customer
satisfaction, give attention to competitors, benchmark, and provide employee empowerment.
Meeting customer requirements is one level of customer commitment. This level may
imply a reactive system to provide to customers what they request of a firm. Such a reactive
mode is different from an expression of striving for “total customer satisfaction”, customer
delight, or “exceeding customer expectations” (Stahl, 1995).
Attention to competitors is another concern in marketing. Changes in competition such
as the entry of a new competitor can be a dramatic threat. In the global market, this threat can
come from strong and established companies all over the world. Stahl (1995) emphasizes that
extensive changes due to competitive threats underscore the importance of competitive strategy
and competitor analysis.
Benchmarking is another total quality management strategy that can be used in the global
market. Benchmarking is the process of comparing work and service methods against the best
practices and outcomes for the purpose of identifying changes that will result in higher quality
output (Luthans 1995).
Glanz and Dailey (1992) declare that benchmarking offers a number of benefits to
organizations. First, this technique helps organizations compare themselves against successful
companies for the purpose of identifying improvement strategies. Second, benchmarking enables
organizations to learn from others. Third, it helps create a need for change by showing the
organization how procedures and work assignments should be altered and resources reallocated
(Glanz and Dailey, 1992).
Another strategy for improving quality is employee empowerment. Empowerment is the
authority to make decisions within one’s area of operations without getting approval from anyone
else. Thus, the international executive must be given sufficient latitude in decision-making.
There are two characteristics that make empowerment unique. One is that the personnel are
encouraged to use their initiative and second is that employees are given not just authority, but
resources as well, so that they are able to make a decision and see that it is implemented (Luthans,
1995).
Ivancevich et al (1994) declare that firms that are aiming to improve quality believe in
continuous improvement, a process of constant, incremental improvements in a firm’s process.
An organization must create constancy of purpose toward improvement of product and service.
When international companies develop strategies for their global markets, they need to be
flexible and alert to local cultures (Cateora and Graham, 1999). Although there are several cases
of serious mistakes and blunders, there have been great successes as well. The success stories
have one thing in common: When the market demands it, successful marketing strategies reflect
local custom. Giving numerous examples of the cultural issues which multinational companies
must confront, Cateora and Graham (1999) emphasize that a marketer must be sensitive to
cultural dynamics.
A salient understanding of the culture of various countries is relevant to the global
executive. The design, style, and uses of a product must be adapted to the culture of the market.
The contemporary executive must realize that markets are not static; they are dynamic.
They change in consonance with global trends and influences. Product preference is altered
because of changing conditions. For instance, the sellers of beer in Philippine cities report that
where “coffee clubs” abound in malls and crowded localities, the sales of beer have diminished.
Formerly, business transactions used to be discussed over bottles of beer. Today, these
discussions are made over cups of coffee. Thus, a liquor-oriented society has transformed into
coffee lovers as a result of the proliferation of coffee joints in the malls.
Global executives should learn from the anthropologist, who divides culture into five
elements: material culture, social institutions, humans and the universe, aesthetics and language.
Understanding the dynamics and sensitivities of these elements in conducting cross-border
business can heighten the level of success of the interaction.
Material culture includes technology and economics. The global executive must analyze
the needs of the market according to its level of technology. This element affects the level of
demand for certain products as well as the quality and types of product demanded by the culture.
The higher the level of technology in the culture, the more demand there is for sophisticated
equipment.
The global executive should understand the importance attached by the market to its
social institutions. Marketing techniques that appeal to close family ties succeed more in the
Philippines, China, Italy, France, and Spain than in other countries.
The concept of the relationship between humans and the universe affects the buying
patterns of the market. Religion, morality and superstition can spell the difference between
success and failure in an enterprise. The marketer must take into consideration the religion of the
market before selling goods that might offend the adherents of a specific religion.
Morality can affect a market’s preferences. For instance, paperweights with the shape of
the human phallus, which sells fast in Denmark may not have a market in the Philippines and in
other parts of Asia. In the Philippines, an artistic presentation entitled “Vagina Monologues”
played to several empty seats in the theaters because of its title.
Superstition exerts an important influence on the buying patterns of many markets. Asian
markets are particularly sensitive about products that carry meanings usually associated with evil.
Beliefs in dryads, elves, nymphs and ogres, predispositions against the number 13, preference for
the number 8, belief in the good luck brought about by dragons, and repugnance for the color
black are examples of superstitious beliefs which global executives have to contend with.
Global executives have to recognize that the market’s concept and standards of beauty
can differ. The uniqueness of a culture can be identified according to its people’s interpretation of
symbols, which in turn reflects their mode of artistic expression. In this case, the principle
“Beauty lies in the eyes of the beholder” is true.
A deep understanding of the languages of various countries is equally important to the
global executive. The nuances of language can cause serious barriers to communication. For
instances, there are people who cannot pronounce the letter “L” and substitute them for “R” and
vice versa. The meanings of idioms and phrases may interfere with the executives’ effort to
communicate clearly.

FINDINGS AND RECOMMENDATIONS

Based on the findings of the study, the researcher inferred that where the travel
executives were concerned, globalization has an impact on contemporary business in the sense
that globalization has improved the ways of engaging in business, accelerated communication,
removed tariffs and levies that militate against free trade, stimulated technological advancement,
encouraged free market capitalism, caused changes in the self-perceptions of groups and
 individuals, and encouraged schools to be innovative. Executives worldwide are like-minded on
several issues relating to globalization. There has been a general agreement to the views offered
by author Thomas Friedman on globalization. In light of the potential impact of globalization on
business, it is necessary for executives to plan, develop and implement well-thought strategies in
which their organizations can best succeed in a globalized environment.

In the light of the results of the study the researcher recommends selected strategies to
individuals, organizations, government institutions, and academic institutions as they face the
challenges of a globalized environment.

1 Governments and corporations should work together to promote and facilitate e-commerce and
e-governance worldwide. The supporting technological systems and infrastructure need to be put
into place.
2. Governments and corporations should build organizational structures that are anchored on
decentralization and flexibility. Doing so allows them to respond effectively to the challenges and
opportunities brought about by globalization.
3. Governments and corporations need to assess and evaluate the potential psychological impact a
highly competitive society would have on employees. Training on Global Adaptation and Cross-
Cultural Success would help minimize misconceptions and fears on Globalization and could
provide guidance on winning global strategies.
4. Globalization Committees or Advisory Boards may be formed in organizations. These
organizational units can address the assessment of Global Preparedness of organizations, enhance
cross-cultural understanding through training and discussion forums, and develop strategies for
organizational success in a global environment.
5. Governments and corporations should develop a coherent plan to strategically compete and
adapt to a global environment. The insights offered in this study may be integrated in the planning
process.
6. Academic institutions should thoroughly explore the potential opportunities and threats that
exist in online education. International knowledge transfer among individuals, corporations, and
governments may become vehicles for global learning.

FEATURED TABLES

Table 1
Travel Executives’ Perceptions on Business in General (N = 118)

Strongly Strongly
Statement Agree Agree Undecided Disagree Disagree
F % F % F % F % F % u Scale

In our present
time and era, the
way we do
business is far
different as
compared to the
time prior to or
during the Cold
War. 62 52.54 45 38.13 5 4.24 5 4.24 1 0.85 4.37 SA

It is easier to start
and operate a
business today
than it was thirty
years ago.
26 22.03 36 30.51 23 19.49 27 22.88 6 5.08 3.41 A
The appropriate
organizational
structure in a
globalized system
is anchored on
decentralization
44 37.29 61 51.69 8 6.78 5 4.24 - - 4.22 SA

The business
cycle is faster as
a result of
globalization 79 66.95 37 31.35 1 0.85 - - 1 0.85 4.63 SA

In a globalized
system, it is
easier to
formulate and
market brands
that have cross
cultural appeal. 73 61.95 41 34.74 1 0.85 2 1.69 1 0.85 4.55 SA

Factor Average 4.24 SA

Table 2
Travel Executives’ Perceptions on Communication (N = 118)

Strongly Strongly
Statement Agree Agree Undecided Disagree Disagree
F % F % F % F % F % u Scale

Our present
world has
resulted to
changes in the
way we
communicate
with others 24 20.34 53 44.91 31 26.27 7 5.93 3 2.54 3.74 A

Globalization has
resulted to our
ability to reach
out to people in
other countries in
a faster, deeper,
and cheaper
manner
22 18.64 70 59.32 14 11.86 8 6.78 4 3.39 3.83 A

Factor Average 3.78 A

 Table 3
Travel Executives’ Perceptions on Finance and Investment (N = 118)

Strongly Strongly
Statement Agree Agree Undecided Disagree Disagree
F % F % F % F % F % u Scale

The globalized
system has
changed the way
one invests 35 29.66 70 59.32 9 7.63 2 1.69 2 1.69 4.13
A

The ability of
online investors
to move
resources
globally has an
economic impact
on a country
33 27.97 53 44.91 13 11.02 18 15.25 1 0.85 3.84
A

Globalization has
encouraged
companies to
invest in and
explore oppor-
tunities world-
wide 8 6.78 21 17.80 20 16.95 49 41.52 20 16.95 2.56
D

There is a need
for the
standardization of
accounting and
financial systems
worldwide
33 27.97 64 54.24 10 8.47 8 6.78 3 2.54 3.98
A

Factor Average 3.63 A

Table 4
Travel Executives Perceptions on Technology (N = 118)

Strongly Strongly
Statement Agree Agree Undecided Disagree Disagree
F % F % F % F % F % u Scale

Companies that
don’t modernize
or have top-notch
technologies
would likely fail
19 16.10 46 38.98 43 36.44 8 6.78 2 1.69 3.61 A
Globalization
requires
companies to
restructure to
take advantage of
new technologies
41 34.74 57 48.30 13 11.02 6 5.08 1 0.85 4.11 A

The greater a
country’s band-
Width, the
greater the like-
lihood of its
prosperity 40 33.90 63 53.39 10 8.47 5 4.24 - 4.17 A

Countries
exporting IT and
services would
likely become
more prosperous
than those who
export basic raw
materials
45 38.13 56 47.46 11 9.32 5 4.24 1 0.85 4.18 A

Factor Average 4.02 A

Table 5
Travel Executives’ Perceptions on Government and Economy (N = 18)

Strongly Strongly
Statement Agree Agree Undecided Disagree Disagree
F % F % F % F % F % u Scale

The best system

in our globalized
world is free
market capitalism
46 38.98 60 50.85 7 5.93 4 3.39 1 0.85 4.24 SA

The globalized
system has
knocked off
previous barriers
between
countries.
52 44.07 61 51.69 4 3.39 1 0.85 0 0 4.39 SA

Globalization has
forced
government to
strengthen their
digital infra-
Structure to be
globally compe-
titive 38 32.20 51 43.22 19 16.10 8 6.78 2 1.69 3.97 A
Globalization has
resulted to
changes in the
political and
economic
strategies of
countries 25 21.19 49 41.52 17 14.41 20 7 5.93 3.55 A

There is a need
for an e-
government 27 22.88 76 64.41 13 11.02 1 0.85 1 0.85 4.08 A

There is a need
for more strategic
alliance and
regional
integration
among countries

17 14.41 34 28.81 42 35.59 17 14.41 8 6.78 3.30 U

Countries need to
brand, market,
and sell
themselves as
investment
destinations 12 10.17 51 43.22 34 28.81 20 16.95 1 0.85 3.45 A

A country’s
cultural and
environmental
foundation has an
impact on its
attractiveness to
global investors
13 11.02 40 33.90 32 27.12 28 23.73 5 4.24 4.08 A

Countries should
absorb cultural
influences of
other cultures to
adapt and be
enriched in our
globalizing world

46 38.98 65 55.08 5 4.24 2 1.69 0 0 4.24 SA

Globalization has
created a more
open and unified
global market for
many goods and
services
50 42.37 54 45.76 8 6.78 5 4.24 1 0.85 4.24 SA

Factor Average 3.95 A

 Table 6
Travel Executives’ Perceptions on the Psychological Impact of Globalization
(N=118)

Strongly Strongly
Statement Agree Agree Undecided Disagree Disagree
F % F % F % F % F % u Scale

Globalization has
set in at our
world today, and
most of what we
do have
international
repercussions.
49 41.52 55 46.61 6 5.08 8 6.78 0 O 4.23 SA

The globalized
system has
changed the way
I perceive the
world to be 30 25.42 44 37.29 20 16.95 20 16.95 4 3.39 3.64 A

I feel pressured
and threatened as
our world further
globalizes
39 33.05 66 55.93 9 7.63 4 3.39 0 O 4.19 A

There is a risk
that those who
are left behind in
a globalizing
world will create
chaos and a
backlash 17 14.41 36 30.51 38 32.20 26 22.03 1 0.85 3.35 U

Factor Average 3.85 A

Table 7
Travel Executives’ Perceptions on International Education (N = 118)

Strongly Strongly
Statement Agree Agree Undecided Disagree Disagree
F % F % F % F % F % u Scale

The academe has

a major role to
play in educating
and preparing the
youth to cope
with our
globalizing world

51 43.22 56 47.46 10 8.47 1 0.85 0 O 4.33 SA

Studying in
another country
would heighten
an individual’s
chance of
succeeding in a
globalized world 52 44.07 50 42.37 8 6.78 8 6.78 0 O 4.24 SA

On-line education
is an effective
methodology in
providing
educational
access across
borders
12 10.17 65 55.08 29 24.58 9 7.63 3 2.54 3.63 A

I would spend
over $500 for a
relevant short-
term course
offered by an
academic
institution in
another country,
via the Internet
11 9.32 32 27.12 45 38.13 24 20.34 6 5.08 3.15 U

Factor Average 3.84 A

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