Impact of globalization on high street banks: The case of HSBC
The impact of globalization on hsbc bank will increases, and be more likely to reform the bank in order to gain credibility with international investors, conservative parties will not reform the bank because doing so will help other institution. Globalization as defined by Giddens (1990) as ‘intensification of worldwide social relations which link distant localities in way that local happenings are shaped by events occurring miles away and vice versa’, embodies some interrelated ideas, of “accelerating interdependence (Held, McGraw, Goldbat and Perraton, 1999). Globalization is leading to homogenization and convergence in hsbc strategies, structures and processes and in consumer choice, along with a new global division of labor that widens the income gap between the ‘haves’ and ‘have nots’ both within and between societies.
Today’s financial world is organized by accelerating globalization, ‘which is strengthening the dominance of a world capitalist economic system supplanting the primacy of the nation state with bank corporations and organization through global culture base. There has been emergence on global bank economy and culture can be described as a ‘network society’ which is grounded in new communications and information technology (Castell, 1998). Some view globalization as the continuation of modernization and a force of progress, wealth, freedom, democracy and happiness. Others view it as another form of imposition. Its critiques view globalization as harmful and perceive it as effective force that bring about increased domination and control by wealthier and overdeveloped nations over the poor and underdeveloped countries. They feel that it widens the gap between the ‘haves’ and ‘have nots’ (Castell, 1996). From the social theory perspective, globalization involves the flows of commodities, capital, technology, ideas, forms of culture and people across national boundaries via a global networked society (Castells, 1997, 1998). The transmutations of technology and capital, work together to create a new globalized and interconnected world. (Castell, 1998) A technological revolution involving the creation of computerized network of communication, transportation and exchange is the presupposition of a globalized economy, along with the extension of a world capitalist market system that is absorbing evermore areas of the world and spheres of production , exchange and consumption. The technological revolution presupposes global computerized networks and the free movement of goods, information and people across national boundaries. Hence the internet and global computer networks make globalization possible, by producing a technological infrastructure for the global economy. Globalization has an effect on employment patterns worldwide. It has contributed to a great deal of outsourcing which is one of the greatest organizational and industry structure shifts that changes the way business operates (Drucker, 1998). Globalization is also seen as changing organizational structures where expenses can move up or down as the business climate dictates (Garr, 2001). For employees the trend toward outsourcing has been thought to result in a loss of fixed employment opportunities as a consequence of firms seeking to use cheap labor from countries like China, Mexico and even Africa. The globalized economies have also had their effect on reward systems, migration, and on job security. Recent years have seen drastic reduction in global barriers to competition in the financial services industry. Deregulation around the world has permitted consolidation across more distant and different types of financial institutions. Improvements in information processing, telecommunications, and financial technologies have facilitated greater geographic reach by allowing institutions to manage larger information flows from locations and to evaluate and manage risks at lower cost without being geographically close to the customer. The banking industry may never become fully globalized, adjusting to the full effects of deregulation, technological progress, increased cross border nonfinancial activity. Some banking services like relationship lending to informationally dense hsbc ways as provided primarily by financial institutions in which banking services are being demanded.
References
Castells, Manuel. (1996). “The Information Age”: Economy, Society, and Culture. Vol. 1, The Rise of the Network Society, Oxford, England: Blackwell.
Castells, M. (1997). The Information age: Economy, Society, and Culture Vol. 2, The Power of Identity, Oxford, England: Blackwell.
Castells, M. (1998), the Information Age: Economy, Society, and Culture. Vol. 3, End of Millenium. Oxford, England: Blackwell.
Drucker, P. (1998). Peter Drucker on the Profession of Management. Cambridge, MA: Harvard Business School Press.
Garr, D. (2001). Inside Outsourcing. Fortune Technology Review, Summer 2001: 85-52.
Giddens, A. (1990). The Consequences of Modernity, Cambridge and Oxford: Polity and Blackwell.
Held, D., McGraw, A., Goldbat, D. and Perraton, J. (1999). Global Transformations. Cambridge: Polity.
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