1.      The statue is not John Harvard.

2.      John Harvard is not the founder of Harvard University.

3.      Harvard University was not founded in 1638

The reason why all students coming to Harvard for the first time visit this statue is very simple and meaningful, which is: students are expected to understand that they should not believe immediately in everything they see or listen. They must have their own judgment, evaluation and their own point of view. The statue is to remind students to think critically.

Huffy Bicycles

The term “Globalization” was first used by Theodore Levitt, a Professor at Harvard University of Business. He saw a huge process happening, which is the formation of the global market for consumer goods with reasonable price and mass production. He believed that consumers from different countries would gradually have the same taste and sooner or later goods would be simplified and standardized based on common global criteria.

However, the products with deep sense of individual such as a bottle of Coca-Cola can be standardized so that it could become one part of the world community. In contrast, the products with deep sense of community such as Nestle coffee, cocoa, spices…will depend much on local culture, which should be adjusted more or less to satisfy consumers in each country.

Huffy Bicycles’ products are bikes with deep sense of individual. They become popular and are easily standardized based on common global criteria. In 2000, Huffy Bicycles decided to directly buy products from China where the labor cost was just 0.5 $/h. in Wal-Mart, products from Huffy Bicycles decreased from 80$ to 40$ in 2000. At the same time, in order to get things done smoothly, CEO at Huffy gave out bonus and total compensation was 1.2 million dollars. This can be considered success to Huffy as it helped to decrease the price, attract customers, bring profit for the company and gain competitive advantage for its products in the market.

Let’s have a look at Huffy’s production process which began in 1996 when the company decided to cut down the labor cost from 12$/h to 10.5$/h so as to increase its competitive advantage. After that, Huffy got into trouble when the company had to close and move the production plants to Missouri in 1998, which resulted in the unemployment of 1000 workers and the payment of 8$/h for those who stayed. One year later, facing the competition with Chinese products, Huffy had to move its production to Mexico, in the hope that the company could have advantage of NAFTA and workers there would get paid of 4$/h. it was clear that Huffy’s leaders wanted to make use of cheap labor cost to reduce the product price and production cost so that their products would gain competitive advantage. However, all these things didn’t work as they expected because of fierce competition with Chinese products. China is a typical developing country where there is dense population with cheap labor cost. Obviously, when the production of a bicycle has been simplified and standardized and its quality is easily accepted all over the world, the only way for companies to gain competitive advantage is to cut down production cost and reduce prduct price. Hiffy did all. They even moved their production plants to Mexico but the labor cost there was still 8 times higher than that in China. Therefore, directly buying the products from China was considered a right decision if they want to remain their business, protect their profit and keep their market share. Although leaders in Huffy spent more than 1 million dollars to ensure everything to be smooth, they definitely gained their competitive advantage because of their cutting cost and price decrease. This would bring profit to investors as well as attract consumers, which can be considered a successful example of Globalization.

However, we still can see the dark side of globalization. That is thousands of workers have been out of work. Huffy is not the only company to face with this problem. When companies decide to directly buy products from developing countries where there is cheap labor cost or when they decide to move the production there, an obvious consequence will be the unemployment of thousand of workers. Also, employees in developed countries cannot accept cheap payment as their expense is much higher than that in developing countries. If this situation remains unsolved, a large number of workers will be long time unemployed, which leads to political and social instability. While consumers and investors benefit from globalization, a large number of employees will get into trouble.

Another consequence is environmental effects. When most of the production is set in developing countries, jobs are created and economic development is speed up but the environment there will be destroyed. We all know that nowadays, most of heavy industries such as car production, ship building, metallurgy, mining, shoes making or clothes making…are moved to developing countries to take full advantages of human resources, natural resources and the generosity of investment incentives policies.

Here we are not talking about environment destruction in China or its uncontrolled economic development. We are talking about he unemployment of 1000 workers in Huffy in 1998 and a lot more in 1999 when the production was moved to Mexico and finally when they are closed.

Clearly, this is not a complete success of Huffy. Globalization has bought competitive advantage to Huffy, a lot of benefit to investors and consumers but at the same time it caused thousands of works to be out of work. These are 2 different sides of globalization, which is not the concern of any individual enterprise or any individual country but the whole world today.