Posted by Thomas Crampton

My experiences in changing cities five times and continents three times in the last 18 months have given me an insight into the shallowness of certain aspects of globalization from a consumer perspective.

(My experiences are used merely as example I know well, not because I think they are of world significance. )

I first had an American Express card in Hong Kong, then in the US and now in France. When I applied for the new Amex card in the US and in France, I was assured that my membership date would go back to when I first joined.

Each time I got the card, however, (my French card just arrived) they considered me a new member. A longer term of membership can confer benefits.

When I complained to the French Amex yesterday, the customer service person explained that American Express in Hong Kong is not the same as American Express in France. Funny, because that is not what their advertising seems to imply.

I had a similar experience with HSBC. Their Hong Kong service has been excellent (great website), so I checked out the bank in the US and then here in France. Each time I was informed that although they market the bank as HSBC in these different places, each bank is fairly independent country-by-country. They said this is partly due to banking legislation that varies in each jurisdiction.

What generalizations can be drawn? Products (McDonalds burgers, Coke, etc) globalize more quickly than services?

22 Comments

Globalization is inversely related to the extent of non-functional regulation. Functional regulations, like food safety, pose few barriers because the efforts needed to comply are very similar around the world. Procedural regulations, like banking, have little commonality and often are designed as de facto trade barriers.

Oh definitely there is a problem with services. I have basically the same problem as you: a bank that exists in multiple countries, and insists on acting like separate banks for each country.

I have an account in Nordea in Norway, and even though I have a local Nordea office here in Lund, Sweden, they can't help me with my account. To sign up for e-banking I have to call Norway, send and recieve forms by mail etc etc. And then I can't transfer money from two accounts in the same bank without fees being applied.

Someone told me that governments are the ones lagging behind. After all, if every cross-border move has to be checked by officials, no wonder the bank has to apply fees on internal transactions. It has to change; I though EU was doing this for me, but in reality it never changes until enough people try to live globally.

Yes, my brother had the same problem, I think you get uniformity of brand but not access to common resources. So for food, each unit draws from a local source. But for banking there is a common source where I think a combination of regulatory and internal barriers exist.

Note this is also true in the U.S. I take advantage of branch banking when I moved from one state to another, and the new branch was not happy with me not moving my account. The reason was that even though I used the services of my new local branch, my deposits are credited to my old branch. So even though it's the same "bank" the management of each branch as a P&L means they are penalized for servicing the common brand and I'm just a cost, not a customer.

This is kind of lightweight compared to the above examples, but after being used to decent food at Kentucky Fried Chicken in Japan, you can imagine my disappointment coming back to my own country and getting the greasiest excuse for poultry I've ever seen...

In general, Japanese versions of North American chains are better, though... Seven Elevens in Japan are miles above the ones here in Canada (although some of them in this city have sushi now!), and Mr. Donuts in Japan did so well they actually had to bail out the American arm of the company when it was having trouble.

It's hard to talk about globalization until people can agree on what the term means. Does it refer to the growing number of international accords and bodies like the Geneva Convention, Kyoto, and the U.N.? Does it refer to a reduction in cultural diversity around the world? Does it refer to the freer movement of goods and services among countries? Is it a code word for the domination of poor countries by rich countries, or an attempt to level the playing field so that poor countries have a chance to get into the rich club? Or does it simply refer to standardization of goods and services (as in this posting)?

Go ask the 12 year old girls that spend half their lives in a factory in Vietnam or Malaysia sewing shoes under 19th century working conditions for pennies a day for Wal-Mart if globalization really exists.

Um, brand.
The #1 product in the world today is brand. Everything else is secondary. Waaaay down the list.
It's all about franchising and expanding the brand. What stands behind the facade is a local businessperson in shack hawking garbage. You're better off next door where there is no pretense of "brand authenticity".

hi joi.

i used to work for american express some years ago here in germany. during my time at amex, international cardmembers could transfer their cardaccounts and their membership since date to any country they had a bank account and being registered in. this was not a standard procedure that could be handled by a telephone represantative. i would give amex a call and ask to be connected with a supervisor or write a letter to the so called ask the president department.
nevertheless american express underwent the globalization in restructuring their service. at my time the service was done by amex employees. nowadays the service is outsourced to an external company. globalization means in your case with amex, that you think you have dealed with genuine and received only a carbon copy.

Heck, I had a similar experience with Bank of America just moving from California to Nevada in the mid-90's. I had to close my account in CA and open a new one in NV and couldn't just move my existing account to a local branch.

The reason cited: "We're not the same corporation".

Regulations aside, if the banks want to make it work, they can... it's not in the interests of the regional banks to make the transition seamless (they'd want to keep a client as long as possible) - I, for one, have kept my hsbc and amex accounts in HK after I moved back to the States... because I don't want to deal with the long distance phone calls, wiring and so on. Globalization only works if it's in the interest of the corporates!

Changing five countries that often and being a snob about your membership year is such a rare event that it would be criminally irresponsible of AmEx to spend time, money and energy to support it.

I remember hearing it explained as follows about Lucent Technologies: it's not so much a 'global company' as a 'multi-location company'. The reality is that each country still has a different way of doing business and a different offering is required in each case.

You can see over time though that things are getting a bit more global. In the mobile phone sphere for instance, it is becoming more and more difficult for players without a global footprint. Equally, in the area of credit card brands, you have to be a global player of some sort to have a hope.

When I moved to the US from Germany -- having been an AMEX card holder in Germany for some years -- I had to practically threaten them to give me a (US) AMEX card. Excuse: "no credit history". After a few months back and forth, they relented.

I agree ...

I have the same amexco card since 1968 :-( moving from Switzerland to Germany to Italy to Germany to Italy, but maybe that's not global enough.

Ulrik wrote @2:
I have an account in Nordea in Norway, and even though I have a local Nordea office here in Lund, Sweden, they can't help me with my account. To sign up for e-banking I have to call Norway, send and recieve forms by mail etc etc. And then I can't transfer money from two accounts in the same bank without fees being applied.

I though EU was doing this for me, but in reality it never changes until enough people try to live globally.


• Norway is not part of the European Union • Sweden, though a member of the EU, still use their own currency — the Swedish Kroner, — and thus are not part of the European Monetary Union — the so-called “Euro”-zone. • A transfer between Nordea accounts held in Norway (in Norwegian Kroner ?) and Sweden (in Swedish Kroner ?) is thus as cross-border as they come, and there's little the EU or the EMU can do about it.

The Norwegians should be asked to join the EU, so that they can contribute some of their significant North Sea oil earnings towards the EU enlargement and stabilization budgets, and both Norway and Sweden should abandon their quaint national currencies and switch over to the Euro ;-) The EU directive prohibiting the levying of fees for electronic transfers between Euro-zone accounts would then be applicable.

The norwegian are free to do whatever they want, and if I were them I'd rather stay the hell out of the EU. These years show that strong, independent countries like the UK can cope well with the US/EU/China "giants" by providing a safe harbour for financial players. What are they going to earn from joining? Immigration problems? :)

Anyway, I agreee with the pwb flamebait that Joi is being a bit snobbish and cheap. "A longer term of membership can confer benefits", come on :P and anyway this can be easily explained by some committee law; at the end of the day, "services" are just produced, regulated and consumed by committees.

I think that products globalize more quickly than certain types or services. Services that are unregulated globalize easily. Technical support services are a good example of this.

True globalization is still far, far away...

The only globalization that can occur with services are between boundaries that are adherently similar in structure and regulatory governance.

As much as Amex (or any company for that matter) wants to pretend like they are creating a "global community", the fact of the matter is that thier brand name is the only global aspect of thier business.

Service, support and policies all must conform to other standards, usually not in corporate control.

The most interesting thing about this post is that everyone is mistaking Thomas Crampton's writing for Joi's.

And yes - I've done some professional work on banking regulations and each countries' operation has to be a freestanding operation complying with local laws. That usually means it's really hard to have a single central database (since e.g. making sure you don't give out information you're not allowed to vs. giving out information you *must* give out would be very difficult to do between jurisdictions etc.)

Of course, if that kind of information *did* follow you around, some people might feel concerned that your financial information was available in jurisdictions with differing privacy laws...

Giacomo wrote: ...These years show that strong, independent countries like the UK can cope well with the US/EU/China "giants" by providing a safe harbour for financial players. What are they going to earn from joining? Immigration problems?...

Are you implying that the UK is not a member of the EU??

The EU has more advantages then just freedom of movement. It is easier to do business both between EU countries and with foreign companies, since the EU provides more uniform regulations for trade.

Globalization today is hindered mostly by corporate lack of trying. Corporations and franchises give us a false sense of security by having "brances" in different countries, but the service is usually very different. It is rare that different branches even know of the existence of eachother, let alone are able to effectively communicate with eachother.

I believe that if corporations were to create central agencies for international affairs, they would easilly overcome differing laws and regulations. However that costs money, and it benefits only the customer.

Dimo:

Yes, I agree that corporate laziness could be at the heart of this issue.

They can overcome problems they want to overcome.

Perhaps there is simply not enough demand to motivate overcoming that laziness.

I'm a Canadian in the US and have been totally surprised by the lack of transference between the two countries with the longest shared border (and, arguably, the most shared cultural experience).

I have to take a new road test here to get a driver's licence (I've been driving for 16 years without a blip). I have to open new bank accounts without ANY credit history (going back to zero, which makes getting credit for leasing a car very difficult). Not to mention the vaccinations!

Crazy. I can't imagine 3 continents in 18 months. It's going to take me a year to get through the paperwork involved with one continental move!

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Does globalization exist? from Venture Chronicles by Jeff Nolan
September 30, 2005 5:04 AM

yes, but in ways not easily witnessed by consumers, and never as efficiently as proponents suggest, as Joi's experience would suggest. Link: Joi Ito's Web: Does globalization exist?. When I complained to the French Amex yesterday, the customer service ... Read More

According to Joi Ito, globalism as we perceive it does not exist in its paranoid monolithic brand perception.... Read More

I have just finished reading Friedman’s “The World Is Flat”. It is one of the best and most sapid business books I have read in a long time… I actually recommend it to all my non-business friends as well since it does a great ... Read More

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