The Triad Essay

Custom Student Mr. Teacher ENG 1001-04 20 March 2017

The Triad

        This paper seeks to analyze and discuss whether there is basis to agree to the proposition that the Triad is the fast track to company globalisation and standardisation. We will try to evaluate whether theory and evidence supports such proposition.

         First we should know what is the Triad is.  Moore and Rugman (2005) in discussing, ‘Globalization is about Regionalization’ said that the word “triad” was coined by Japanese consultant and author Kenichi Ohmae which refers to the economies of Western Europe, North America and a small number of East Asian nations, particularly Japan. Moore and Rugman (2005) quoted Ohmae to have argued that these economies are the critical ones from a viewpoint of innovation, trade and investment.

       The classification of the countries into triad is based on the viewpoint of innovation, trade and investment.  This means that these countries would take the lead in introducing new products ahead of other countries in the world and it also happened that these few countries in the triad are ones  with high GDP according to the last available data from World Bank (Wikipedia- GDP, 2006) (Paraphrasing made).

       Thus Moore and Rugman (2005) agreed with Wikipedia when they categorized a triad whereby MNEs around the world belongs.  They said: “The vast majority of Fortune 500 companies on which we could compile data (320 MNEs) are home-triad based, having only modest sales in the other two regions.  A set of 36 are “bi-regional,” with at least 20 percent of their sales in two parts of the triad.  Only 10 of the 500 are truly global, with at least 20 percent of their sales in all three parts of the triad.  Overall, this is a picture of regionalization, not globalization.”

     In proving the result of the study, Moore and Rugman (2005) they had examined the Fortune Global 500 which deals the largest firms by revenues in the world and found out that the intra-regional sales of 380 of the 500 firms were included in the list.  The author noted that these 380 firms account for 79.2% of the total revenues of all 500 firms.  Thus, researchers concluded that the average revenue for a firm in the top 500 was $28 billion, ranging from Wal-Mart at $220 billion to Takenaka at $10 billion and that the average sales revenue of a firm in the set of 380 firms was $29.2 billion.  Most notable too, is the authors’ finding that across these 380 firms, the average intra-regional sales represent 71.9% (Moore and Rugman, 2005) (Paraphrasing made).

          Knowing what the triad is, we should know what globalization is. Jessup, (n.d.) said:  “Strategically, globalization refers to actors’ attempts to promote the global coordination of activities on a continuing basis within (but not necessarily across) different institutional orders or functional systems. Such attempts can be pursued through different material and social technologies on the interpersonal, inter-organizational, inter-institutional, or inter-systemic levels.”  The author gave the following examples to illustrate globalization: interpersonal networking; strategic alliances orchestrated by transnational enterprises (alliances which may include more local or regionally-based firms as well as not-for-profit organizations); the institutional design of ‘international regimes’ to govern particular fields of action; and projects for world government or global governance.

Further, Jessup, (n.d.) noted that the forms of coordination proposed for globalization vary widely and none are guaranteed to succeed — witness the market-led globalization favoured by the World Bank, the horizontal ‘global governance’ favoured by proponents (especially NGOs) of international regimes, and plans for more top-down inter-state (or even world) government.  Hence, he inferred that what is generally labelled nowadays as ‘economic globalization’ rarely, if ever, involves full structural integration and strategic coordination across the globe (Paraphrasing made).

        The term globalization, however, has a very broad meaning for it could also mean cultural integration.  IEL (1999) thus stated that the degree of adaptation or resistance to foreign cultural schemata varies among societies, citing the Schumpeterian concept of creative destruction where there is there is a constant struggle between groups that wish to speed up the process of integrating new ideas, processes, and products and those who want to slow down the speed of losing existing norms (IEL, 1999) (Paraphrasing made).

       We are then directed to know what standardization is.  Wikipedia (2006) defined standardization, “in the context related to technologies and industries, is the process of establishing a technical standard among competing entities in a market, where this will bring benefits without hurting competition. It can also be viewed as a mechanism for optimizing economic use of scarce resources such as forests, which are threatened by paper manufacture.

As an example, all of Europe now uses 230 volt 50 Hz AC mains grids and GSM cell phones, and (at least officially) measures lengths in metres.”  It added that in the context of social criticism and social sciences, standardization often means the process of establishing standards of various kinds, and improving efficiency to handle people, their interactions, cases, and so forth (Paraphrasing made).

       After knowing the concepts, is there now basis to agree that the Triad is the fast track to company globalisation and standardisation?

      On the basis of the evidence presented that the countries belonging to the triad are the MNEs who have proven track records in their revenues as those belonging to top as per Fortune magazine, and relating now the same to concept of globalization which may be summarized as going to the global market through various means, we could say the triad is fast track to globalization.

      As far as path to standardization is concerned, which could mean mechanism for optimizing economic use of scarce resources or improving efficiency to handle people and their interactions, we could also say that the triad is the obvious path because it is there where competing companies for globalization are found. It is argued that globalization produces competition leading to standardization.

        Hence, we could say that triad could really be a fast track for an aspiring company wanting to have globalization and standardization since the triad provides the venue and the opportunities.

       To conclude, it could be said that will eventually trigger globalization while the latter will result in economic integration of the whole world. .  Globalization is seen to promote further interdependence among countries in East Asian economies as they pass through different stages of development.  MNE being classified as triad-based MNEs indicate that triad first conquers first their own region or triad to sell their products before actually becoming global, hence a company must first become a major player in a country within the triad, then it becomes regional until it becomes global.  However, being part of the triad based does not mean that they will eventually become global, because strategy is still a choice.

 Bibliography:

  1. Jessop, B. (n.d.) Reflections on Globalization and Its (Il)logic(s), Lancaster University, Department of Sociology{www document} URL  http://www.lancs.ac.uk/fss/sociology/papers/jessop-reflections-on-globalization.pdf, Accessed October 28,2006
  2. International Economic Letter, Number 52 (1999), Globalism
    {www document} URL http://www.sba.oakland.edu/econpage/newsletters/NewsLetter52.htm ,  Accessed October 28,2006
  3. Moore and Rugman (2005), Globalization is about Regionalization, Mcgill International Review, {www document}  URL  http://www.irsam.ca/mir/Moore%5B27-30%5D.pdf, Accessed October 28,2006
  4.  Wikipedia, 2006, Standardization {www document} URL  http://en.wikipedia.org/wiki/Standardization, Accessed December 8, 2006.
  5. Wikipedia, 2006, List of Countries by GDP, {www document} URL  http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29, Accessed October 28,2006

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