In class last we discussed the Dell Theory of Conflict Prevention also known as simply "Dell Theory" has been presented by Thomas Friedman in his book The World is Flat.
“The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain.
That is, as long as corporations have major supply chain operations in countries other than that corporation's home country, those countries will never engage in armed conflicts. This is due to the economic interdependence between nations that arises from a large corporation (such as Dell) having supply chain operations in multiple global locations and the reluctance of developing nations (in which supply chain operations commonly take place) to give up their new found wealth.
In his previous book The Lexus and the Olive Tree, Friedman argued that no two nations with a McDonald’s franchise had ever gone to war with one another: this was known as the Golden Arches Theory. Later, Friedman upgraded that theory into the "Dell Theory of Conflict Prevention" by saying that people or nations don't just want to have a better standard of living as symbolized by McDonald's franchise in their downtown, but want to have the lump of the labour sector that is created by globalization. That is, developing nations do not want to risk the trust of the multi-national companies who venture into their markets and include them in the global supply chain.
Thomas Friedman also warns in his book The World is Flat that the Dell Theory should not be interpreted as a guarantee that nations who are deeply involved in global supply chains will not go to war with each other. It rather means that the governments of these nations and their citizens will have very heavy economic costs to consider as they contemplate the possibility of war. These costs include the long-term loss of the country's profitable participation in the global supply chain.
This theory relates with how conflict prevention occurred between India and Pakistan Nuclear stand off in 2002, where India was at risk of losing its global partners. The relationship between China and Taiwan was also cited as an example of this theory - they both have strong supply relations with each other and a war between the two seems very unlikely today.
I think that it is so interesting that a relationship like the Dell Theory was found. And it is even more interesting that it is true. I would have never guessed that anything like that happened.
ReplyDeleteThis is one of globalization's more interesting impacts. The traditional governments and national boundaries are becoming less relevant, as many countries would rather expand economically then territorially. I think this is an amazing phenomenon as many regions have been looking into pooling their currencies together like Europe did to create the Euro. However, with the recent economic downturn and the recent troubles with the Euro, this option is receiving more criticism than before.
ReplyDeleteI thought this topic was very interesting just for the simple fact that I'm learning new information. After reading this I searched the internet for more information because I was dieing to know more, great topic.
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