Global Convergence and Divergence Research Paper

Global Convergence and Divergence - Research Paper Example The phenomenon of globalization is the inter-connectedness among the various nations of the world on the basis of economic ties, and this has produced convergence or unity and integration of different world systems. According to Thomas Friedman, globalization is the â€Å"inexorable integration of markets, nation-states, and technologies†¦..the spread of free-market capitalism to virtually every country in the world.† McMichael sees the process of global integration taking place on the basis of â€Å"market rule on a global scale†. This process of integration may be producing a global convergence of different organizational systems. Ugeux defines convergence as the manner in which a series of actions are driven towards a central point of reference – a process resulting in a move towards a common set of principles and objectives. Uguex notes that there appears to be a conceptual convergence in the following aspects: (a) the use of a non-ruling approach, wherein recommendations have been made for Companies to follow, which have been mandatorily imposed, yet are in practice being followed by many countries (b) the majority of the Board of public companies must be independent and executives of the Company are not deemed to be independent (c) Members of the audit committee must be independent directors and must not receive fees or compensation from the Companies (d) the audit committee makes the decision on the hiring of external auditors and this is subject to the approval of the directors and shareholders.