Introduction
The goal of this literature review is to analyze the trend of global optimization. As the topics covered, the historical aspects of its formation are considered, the key features and manifestations in various areas are identified, and recommendations are given regarding future research and ways to prevent associated risks. Relevant academic sources are involved as a credible justification background. Based on the findings, global optimization is assessed as an ambiguous phenomenon, which has both advantages, such as strengthening supply chains and increased communication between international market participants, and disadvantages, such as politicization and increased opportunities for individual states. Economic pressure, underdeveloped financial models, and other risks are identified. The Genesis model is used as a framework for comparing global optimization with God’s purposes for business on earth.
Global Optimization: Literature Review
In modern economic processes and market relations, great importance is given to such a concept as optimization, and its manifestations, whether in the operating environment or in management activities, are clearly observed. Optimization is a process of minimizing or maximizing the values of certain parameters that, from a specific perspective, characterize economics, its results, additional instruments involved, profit indicators, and many other aspects. The direction of optimization development, particularly finding the maximum and minimum values, is determined by the essence of market relations, within which it is essential to determine the desired values and adapt relevant criteria to the desired results. For instance, in a business environment, stakeholders seek, on the one hand, to maximize profits, and on the other hand, to minimize costs arising in the production process. This formulation is general, but it reflects the essence of the optimization tasks that have to be solved in the context of global market processes. In reality, specific objectives break down into many smaller decisions that, nevertheless, address important changes, such as minimizing the time spent on transporting products, maximizing the number of customers and sales volumes, and other crucial tasks.
This work is a literature review aimed at identifying the prerequisites for global optimization through historical analysis, assessing the main optimization trends and standards used in modern market relations, and suggesting appropriate recommendations for further study of this topic. As a justification, credible and relevant academic resources are involved to synthesize corresponding findings. In addition, through the analysis of Keller and Alsdorf’s (2012) reasoning, the evaluation of business optimization is performed from a Christian perspective, and the analysis is carried out of how the Genesis model, offered as an evaluation framework, can describe the principles of building God’s purposes for business on earth. In general, global optimization is a complex and dynamic process that transforms traditional ideas about market relations and serves as a driver of continuous changes both in the system of the formation of economic relations between individual subjects and from the perspective of social implications manifested as a consequence of specific changes.
Basic Classification of Optimization Methods
When solving optimization issues, a large number of different methods are actively used. In general, they can be divided into two large groups – local and global methods (Mathesen et al., 2021). For each of the categories, individual approaches to resource allocation and control are applied. To analyze globalization as a trend in trade and economic relations, it is essential to compare it with the locality of optimization as a process that has distinctive development tools and technologies.
Local Optimization Methods
A group of local optimization methods is used in the process of searching for narrower market development algorithms necessary for solving problems in a particular environment. This may include the formation of commodity-money relations between partners in the same region, the establishment of a sales system with one supplier, and other processes that do not require adhering to global ties (Krivorotko et al., 2020). This method remains relevant, but in connection with the rooting of globalization as a socio-economic trend, more attention should be paid to global methods.
Global Optimization Methods
These methods are designed to identify trends in the global behavior of market participants to build and strengthen development strategies that allow doing business on a large scale. Such mechanisms take a broader development perspective than local ones and facilitate business through more sophisticated and advanced growth strategies (Fonseca-Pérez et al., 2021). These methods, in turn, can also be classified by resorting to the evaluation of common practices and approaches.
Global Optimization Methods Based on Stochastic and Thermodynamic Approaches
These methods of global optimization are usually considered from a theoretical perspective. One of such approaches is the rough random search (Mathesen et al., 2021). This is the simplest and, at the same time, widespread random search algorithm, consisting of a uniform random determination of points in the search space (Mathesen et al., 2021). Its main advantage is simplicity, and in the theory of global optimization, this algorithm is mainly used as a benchmark for theoretical or numerical comparison. The simulated annealing algorithm is another approach in this category. It was developed by Kirkpatrick in 1982 and is based on the theory of the thermodynamic process of heating and slowly cooling a substance to obtain a crystalline structure (Fonseca-Pérez et al., 2021). When starting from a randomly selected point in the search space, a step is taken in a random direction. These methods are complex theoretical approaches that require appropriate training to be applied in practice.
Global Optimization Methods Based on Deterministic Approaches
This category includes the branch-and-bound method, as well as the taboo search method. In the first case, the set of potential solutions is divided into a number of subsets to calculate the lower bounds of the corresponding parameters and draw conclusions regarding ways to optimize the target tasks (Sergeyev & Kvasov, 2017). The taboo search method does not include such branching as in the previous approach. This practice is based on a comparison with human behavior, that is, on the presence of random elements in the behavioral pattern of a person, which means that in the same situation, a person can behave distinctively (Sergeyev & Kvasov, 2017). The algorithm consists in choosing a random point in the search space, considering points from the neighborhood of this point, and, upon reaching a certain criterion, choosing a new point in another search region that has not yet been considered (Sergeyev & Kvasov, 2017). These deterministic techniques also require appropriate training to be successfully applied to business purposes.
Global Optimization Methods Based on Heuristic and Metaheuristic Approaches
These methods include such approaches as evolutionary programming, evolutionary strategies, and genetic algorithms. Evolutionary programming is an approach containing many heuristic dependencies, which is relevant to machine learning tasks (Kvasov & Mukhametzhanov, 2018). The evolutionary approach makes it possible to adapt to any changing business model, which also allows it to be used in systems with artificial intelligence, and genetic algorithms combine the nuances of stochastic and deterministic approaches, which helps perform not only random search but also relatively accurate analytics (Kvasov & Mukhametzhanov, 2018). All of the above methods can be a theoretical background for the development of appropriate global optimization models.
Global optimization is a process that is accompanied not only by internal changes in the development of individual companies and their growth strategies but also by external manifestations. Different market participants seek to occupy their respective market niches and develop the desired trade and economic capacities, which leads to high competition and shifts in the balance of power in the international arena. Accordingly, the aspect of competition should be considered one of the main outcomes of global optimization and a factor that affects not only commodity-money relations but also geopolitical nuances.
Economic Competition as a Result of Global Optimization: Potential Risks
The influence of competition on the development of the world economy, the fundamental instrument of the market mechanism, often identified with the market mechanism itself, is constantly increasing. According to Aiginger and Rodrik (2020), the costs of using competition as one of the incentives for development are rising in the form of excess advertising budgets, attempts to restructure businesses, and other tools of the struggle for market share. At the same time, the financing of the innovation race is not always compensated by technological and managerial innovations. With a high degree of probability, the participation of two or more firms in the innovation race in the same market leads them to the market failure zone (Raven & Walrave, 2020). Free competition, which is often mentioned in the context of global optimization, does not always lead to competitive equilibrium but rather promotes the consolidation of firms and the capture of the market by a small number of large monopoly companies (Yıldırım-Karaman, 2018). Under the influence of the institutional influence of the state, firms tend not to enter into direct competition. Thus, the rivalry of modern firms is of a strategic nature.
Cardinal technological changes are transforming the nature of competitive interactions in the global market space, where, by now, a new type of relationship has been formed. This is evidenced by the transition of competition to the interstate level, which creates a framework and restrictions for business competition (Aiginger & Rodrik, 2020). The goal of this type of rivalry is to achieve world leadership, which translates competitive relations into a phase of dangerous global confrontation. The instruments of competition are harsh economic sanctions, trade blackmail, or geopolitical threats aimed at concluding unilaterally profitable deals on an international scale (McDowell, 2021). These tools were used before, but at present, they are distinguished by a systemic nature, as well as escalation to various sectors of the economy. One of the key differences between modern global optimization and traditional market growth schemes is that access to the state level turns economic rivalry into competition for systemic control of the world, which, in turn, creates the risk of social and economic instability.
Role of Digital Transformation in Global Optimization
The digital revolution, observed as a result of the modern global optimization trend, is changing the production function and structure of the market. It increases the efficiency of business models by reducing transaction and optimizing costs and uses Big data to make effective decisions on managing limited resources. According to Sima et al. (2020), the diverse shifts under the influence of the spread of the digital world mean a new stage in the development of not only individual sectors but also the economy as a whole. At the same time, the digital economy both opens up opportunities for expanding the range and scale of economic activity and creates a technological basis for development and increased competition. The manifestation of this effect can be attributed, for instance, to the future of the banking sector (Shaikh et al., 2017). For it, the blockchain technology intensifies competition with traditional sources of income and creates conditions for entering a qualitatively new functionality, moreover, on a global scale.
By acquiring a global scale, digital platforms not only reduce the costs of international communications and transactions but also increase the opportunities for interaction between counterparties in all regions of the world. These platforms reduce the level of the minimum scale of the company and open up opportunities for participation in the process of globalization of small and medium-sized businesses, which takes global processes beyond the scope of large transnational companies (Hervé et al., 2020). As a result, new types of subjects of competitive relations arise, and they can arise in any territorial space, thereby changing the structure of industry markets. Under the influence of these global transformations, the threat increases, related to banking structures monopolizing not only the banking sector but also the entire system of production and distribution of products based on control through digital platforms of the supply of raw materials and the sale of final products.
The end result of the global digital transformation may be an inefficient financial model that stimulates not the distribution but the concentration of resources in the financial system, which increases its vulnerability. This factor may manifest itself in the form of an increase in the volatility of stock indices, a deepening imbalance between the capitalization of information sector companies and real production companies, and other signs of financial instability in the long term (Perkin & Abraham, 2021). Therefore, along with development prospects, global optimization also carries corresponding risks.
Politicization of Global Economic Relations
Politicization demonstrates a close relationship with a shift in the center of economic influence, which means a change in the composition of key players in the world market that challenge the global balance of power. The priority of politics over the economy is a consequence, on the one hand, of the collapse of the military-political, economic, and ideological dominance of a contemporary globalization model, and on the other hand, the result of the preservation of countries’ high interdependence, when ups and downs, recessions, and crises become global (Faruk, 2021). The manifestation of the impact of politics on the economy is the key role of political relations in the transfer of technologies and the exchange of other relevant information, as well as in determining the geography of the location of production structures and the implementation of trade and financial policies.
The politicization of the world economy is a potentially dangerous phenomenon that can become a trigger for unleashing a world war, and economic sanctions become the main instrument of influence to change the political power in the country. Currently, a third of humanity lives in states against which unilateral coercive measures are applied – unilateral sanctions (Jazairy, 2019). The preservation of the monopoly position of a number of superpowers in the geopolitical and geo-economic contours of the world space is a pretext for eliminating external competitors in the most important markets. As a result, as Jazairy (2019) notes, the targets of the imposition of sanctions by the United States of America, the countries of the European Union, and several other states are the Russian Federation, Iran, North Korea, or Venezuela. Such a distribution of roles on the geopolitical map inevitably leads to conflicts, and the current situation against the backdrop of Russia’s invasion of Ukraine has proved that one of the most effective tools to influence the economy is the imposition of sanctions restrictions on the aggressor country.
As part of global optimization processes aimed at strengthening national economies, adopting some measures may contribute to reducing the negative consequences of sanctions aggression. Firstly, respect for the strict sovereignty of the country against which sanctions are applied is an integral component of maintaining stability (Jazairy, 2019). Secondly, the consolidation of trade and economic partners within the framework of integration projects, as a condition for reducing the risk of losses in mutual investments and, consequently, reducing the threat of global instability, can also be a potentially effective measure (Dylus, 2017). As a result, based on the assessment of existing trends, one can note that global optimization is accompanied by serious and even dangerous trends that entail not only economic but also socio-political risks. At the same time, while evaluating this phenomenon from a positive perspective, the analysis of the strengthening of supply chains in the context of the issue under consideration allows for speaking of some advantages of global optimization.
Global Optimization of Supply Chains
The optimization of supply chain resources can be carried out at different levels of the hierarchy, for instance, within a functional area, a subsystem, a separate logistics function, and other planes. At the same time, the principle of global optimization must be observed, which lies in the fact that local optimization criteria and decisions based on them should not contradict the global optimum of the logistics system as a whole (Chouhan et al., 2020). Global supply chain optimization can be defined as the integration of key business processes and the coordination of chain counterparties. This practice allows for synchronizing all activities performed during production and distribution, which adds value to the end consumer and eliminates those activities that do not add value. Supply chain management is aimed at optimizing the entire system to achieve a higher quality of service at a lower total cost (Simchi-Levi et al., 2021). As a result, consumers do not feel significant changes, while sellers get an opportunity to spend available funds more rationally.
Ways to establish global optimization in supply chains can be different. Simchi-Levi et al. (2021) mention some common approaches that differ depending on development strategies and market coverage. This includes reducing all types of waste and non-value-adding activities, such as handling, storage, or excess inventory (Simchi-Levi et al., 2021). Optimization may also include improving customer service, for instance, by reducing lead times. Improved supply chain communications, especially those related to counterparty forecasting and integrated planning, directly correlate with better customer-supplier communication and, therefore, more productive partnerships. As an additional tool for global supply chain optimization, stakeholders can consider reducing the time to develop new products, for instance, through innovative technologies (Lanza et al., 2019). Finally, the complete coordination of efforts to connect all links in the chain is a potentially effective prerequisite for strengthening all processes within these chains.
Firms participating in a single supply chain cannot function in isolation from each other but, conversely, must work closely together within the framework of integration. As a result, the benefits of the supply chain integration process are significant. For instance, the exchange of information and resources is streamlined, and costs are lowered by balancing operations (Nandi et al., 2020). Improved performance due to more accurate forecasts, better planning, and more productive use of resources are the consequences of global supply chain optimization. Organizations become more agile through faster responses to dynamic market conditions. Profit growth is also a direct result because orders are completed in a shorter time, which correlates with customer loyalty and high demand (Agyabeng-Mensah et al., 2020). Thus, from the perspective of strengthening supply chains, global optimization can be a favorable market trend.
Global Optimization from a Christian Perspective: The Genesis Model
Assessing global optimization from a Christian perspective can help identify appropriate criteria that determine the correctness and effectiveness of modern measures taken by humanity to follow God’s commandments. The business industry, as the main sector in which the aforementioned changes are particularly evident, has the potential to integrate the relevant biblical directions into it. Keller and Alsdorf (2012) take a step-by-step study of how humanity has adapted to life in a global trade environment and evaluate how certain processes correspond to divine commandments and can be considered righteous. As a basis for analysis, the Genesis model is applied, which is a framework that includes the main biblical stages, namely creation, fall, redemption, and consummation. Traditional religious dogmas, formed over the centuries, are still relevant to the business environment, although today, flexibility is a critical factor to follow to build an organization that addresses the theses of Christianity and, at the same time, allows for making a profit, which is the ultimate goal of any business.
Starting from the presented framework, one can pay attention to the primary reasons that prompt global optimization. As Keller and Alsdorf (2012) state, work is inextricably linked to creation as the former structures and directs the latter. In an attempt to provide more flexible and sustainable interaction algorithms, humanity is constantly looking for ways to improve what exists today. This approach is consistent with the Christian ideas of continuous improvement and strengthening of faith, as well as the practice of constant search for knowledge of the truth. The more people are interested in enhancing certain processes, the more efforts they make. Attempts based on rational ideas and healthy thoughts cannot be considered unnatural and contrary to the Bible. The only thing that can be a deterrent is deliberate malicious intent, for instance, in an attempt to create difficulties for others for selfish reasons, as mentioned earlier in the context of sanctions pressure. Therefore, one can say that optimization is adjacent to creation as a form of building something new and important.
Failure to establish sustainable business processes can bring with it attendant difficulties that, from a Christian perspective, are justified and reprehensible. For instance, Keller and Alsdorf (2012) discuss the life of people in an enlightened world, where any undertaking is welcomed and created effectively, and compare such an environment with the one in which no divine commandments are observed. According to the authors, “in a fallen world, work is frustrating and exhausting” (Keller & Alsdorf, 2012, p. 33). In other words, any tasks that contradict biblical dogmas and do not address bright goals cannot be considered those that change the world for the better. The task of humanity is to build a society in which God’s purposes for business on earth are addressed disinterestedly and openly. The distortion of this idea is fraught with the so-called fall, or regression, which, in turn, entails the collapse of any undertakings. As a result, global optimization must follow bright goals to justify its mission.
Redemption, as one of the elements of the Genesis model, is an incentive for humanity to continue building and reforming. All the processes of the global market, including supply chains, financial transactions, trade partnerships, and other aspects, are easier to strengthen in an environment that is not associated with anxiety and frustration. Keller and Alsdorf (2012) emphasize the importance of redemption as a consolation that helps a person to work in the modern world without being discouraged by the consequences of their work and not ashamed of the path taken. This explanation is consistent with the Christian idea that anyone who demonstrates good intentions will surely be rewarded in the future. When transforming different processes within the framework of global optimization, humans can only succeed if they understand and appreciate the opportunities to develop and self-develop and not to destroy and act only from selfish motives. Thus, the current innovation processes do not contradict the idea of religious redemption if sincerity guides people.
Finally, it is crucial to note that progress is an essential attribute of human life. Any attempt to achieve perfection is likely to be an integral part of the development of civilization. Nonetheless, it is essential to pay attention not only to the final result but also to intermediate success. As Keller and Alsdorf (2012) note, many innovators regret unconsummated deeds and cannot accept the fact that their ultimate goals have not yet been realized. At the same time, while evaluating the work done, these people should understand that their path is no longer in vain. Perfection is often subjective and ambiguous, which is expressed in the inability to achieve specific results, even following a well-defined plan. The reason for this is that any undertakings and aspirations are controlled, first of all, by God, and only with God’s grace a person succeeds. Therefore, when speaking about global optimization as a process that may not be implemented efficiently and accurately, it is critical to remember that efforts are often more important than outcomes.
Questions for Further Research
Based on the conducted literature review and evaluation of the topic of global optimization in the context of the Genesis model, relevant questions for future research can be proposed. As practice shows, introducing innovative solutions into the system of interaction between participants in the global market is accompanied not only by positive aspects but also by risks that entail socio-political threats. In this regard, it is crucial to pay attention to the nuances of mitigating these risks and assessing the prospects for reducing the negative impacts of optimization on the relationships between market entities. The following list of questions can be utilized as a guideline for future research:
- What steps do countries need to take to resolve conflicts in advancing global solution optimization?
- How sustainable can supply chains in an innovative management environment be compared to traditional control mechanisms?
- Is it possible to avoid the politicization of global economic relations?
- To what extent does digital transformation determine the success of global optimization compared to traditional business development models?
- Is it possible to make the economic competition a phenomenon that favorably affects all participants in the global market without exception?
Conclusions and Recommendations
Based on the literature review, global optimization can be called a phenomenon that affects many areas of social, economic, and political life and transforms the traditional standards of interaction between the actors involved. While taking into account the findings from credible sources, one can conclude that, despite positive developments, for instance, the simplification of communication and the strengthening of supply chain management algorithms, global optimization comes with some risks that concern not only financial but also geopolitical aspects. The factors of competition and politicization are serious nuances to consider to coordinate the activities of all members of the global market rationally and avoid conflicts related to pressure on specific entities or limiting their market opportunities. From a Christian perspective, global optimization may be a means of fulfilling God’s purposes of Business on earth, but disinterestedness and sincerity are prerequisites to observe.
In addition to the questions presented for future research, some recommendations regarding the implementation of the principles of global optimization may concern the strengthening of interstate partnerships. Giving large development opportunities to small companies can ensure healthy competition without the monopolization of significant market shares by individual corporations. The role of governments in these processes should be intermediary and not deterrent; otherwise, one cannot speak of the freedom of market growth and open forms of interaction between different subjects. Finally, any attempts at economic pressure should be carried out not by a limited number of states but through international agencies to reduce the likelihood of geopolitical conflicts and bias on socio-cultural or other characteristics.
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