THE LEXUS AND THE OLIVE TREE

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THE LEXUS AND THE OLIVE TREE

• By Thomas Friedman (2000)

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GLOBALIZATION

• Globalization consists of the flow of goods and
  services, capital, and people across national
  borders.
• Forces of Globalization consist of world-wide
  markets, financial institutions, computer
  technologies, instant communication, convenient
  travel, etc. Friedman calls this the Lexus.
• This force began in the 1980s and has been
  picking up speed ever since.

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• The Olive Tree refers to the customs,
  religions,
• ways of life that keep a particular culture
  alive.
• Balancing the Lexus and the Olive Tree is
• difficult but essential.
• Examples GPS and Islam Kayapo Indians
• Globalization is sometimes seems as
• Americanization. (Islam vs. McWorld)

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1989 Berlin Wall Falls Cold War Ends
A New Economic Era Begins

• Globalization encourages the growth of free
  trade. This comes about with the following
• A strong private sector economy
• stable prices low inflation
• Balanced budget low or no tariffs
• Eliminate government corruption
• Open to foreign investment
• Promote competition at home
• Privatize state-owned industries

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New Rules

• Countries which follow the previous guidelines
  grow fastest.
• International Accounting Standards have to be
  used for business to trust countries with their
  investments.
• The Golden Arches Theory of Conflict Prevention