Thursday, May 23, 2013

Globalization and its Importance to Organizations

Globalization and its Importance to Organizations Abstract Discussions on globalization remain one of the hotly debated and contested topics throughout the world. One major argument about globalization is whether it has brought about economic convergence and organizational patterns today in the world or not. Accordingly, this research proposal shall review what globalization is, its importance to organizations across the world as well as its implications to individuals and organizations alike across the world along with the method that will be used to analyze the issues surrounding globalization. However, it is quite clear that globalization is real and the business organizations have to take into account in their day to day operations. Introduction Globalization can be described as the international integration process that arises from the exchange of ideas, products world views, as well as other cultural aspects. It simply refers to the processes that enhance world-wide exchanges of the national and the cultural resources. Advances in telecommunications and transportation infrastructure, together with the increased use of the Internet are also key factors towards globalization, and these further generates interdependence of the economic as well as cultural activities. In other terms, is reflected through the increased flow of goods, services, people, labour, currency, information and culture across the national borders of different countries throughout the world. However, different scholars across the world have divergent view points on the precise importance of globalization particular for the business organizations. The rapid globalization that is experienced today is largely attributed to the global economy which is driven by increased technological advancements, finance, trade, organization’s links and the macro-economic policies (Marković. 2012, pp 32-35). The effects of the globalization process on the business organizations have today become the epicentre of virtually all globalization debates. Despite the fact that there is agreement among the scholars that advanced technological changes as well as globalization shall continue to have impact on the economic, social and organizational fabric of different nations, an obvious division exists on the precise significance of globalization on the organizations in various countries. Some individuals are of the view that globalization has a positive impact towards the organization while other hold an opposite view. Ideally, increased globalization affects the organization in several ways particularly with regard to trade, technology, human resources and business (Homann, 2007, pp 87-90). In addition, globalization has also changed ways in which organizations carry out their functions as well as business operations over the last decades. A good number of organizations have been forced to change their planning strategy and leadership structure. The major rationales for such changes include cross cultural differences which have been caused by globalization. Moreover, the employees’ diversity, emerging global managers, and the increased presence of a high level playing field have also played a key role in changes which have been adopted by the various organizations (Marković. 2012, pp 102-105). In accordance with Gore (2007), the increased globalization encourages effective corporate social responsibility in most of the organizations. The global markets reward the business practices because the companies can take the environmental as well as social responsibilities from governments. Gore holds the view that globalization is able to compel the companies via CSR policies. Companies that operate on the international stage through selling of its products and services or operate in several countries also need to be mindful of their CRS practices. Such important responsibilities should to be considered as corporate governance matters. Therefore, globalization is important since has brings about improvements in the organizations’ CRS issues and ethical corporate governance (Gore, 2007, pp78-81). Pro-globalists consider the management of cross-cultural knowledge a significant benefit of the globalization to the organizations. The international market is typified by massive competition and hence for any business organization to be competitive, efficient and effective knowledge management must be critically taken into account. Goodman (2010) believes that organizations which operate at the worldwide level are faced with the challenge of global market environment so as to implement effective knowledge management structures so as to maximize on their present knowledge. As such, it is imperative for business organizations to considerably leverage their corporate globalization attempts instead of spending money unnecessarily on development and training. Knowledge management also enables the organizations to identify, create, capture and distribute the organizational knowledge. Accordingly, globalization enables the organizations to safeguard, maintain, as well as empower its intellectual and social capital (Goodman, 2010). Additionally, globalization has too enabled the creation of numerous cultures as well as ethnicities that has led to diversity throughout the world. Today, workplace diversity in most of the organizations has been brought about by globalization (Kapoor, 2012, pp 104-109). Furthermore, workforce diversity also plays a key role in most organizations today, with many companies resorting to outsourcing thus altering the work operations in companies. This outsourcing by various companies has further brought about changes in how the organizations today operate their businesses. Gaikwad (2010) holds the view that globalization results in convergent of the varied languages, cultures, and colours within organizations. It also gives the organization’s employees insightful and different alternatives owing to different attitudes as well as multicultural skills. Further still, it improves the language skills in an organization along with bringing more new opportunities to the worldwide workforce. As such, this results in exponential increases in the organizational productivity and enables the business organization to come up with new processes which pose challenges for organizations (Gaikwad, 2010, pp 123-126). The SWOT analysis on globalization advanced by Kumar (2005) was able to prove that increased globalization offers more opportunities rather than threats to businesses across the world. This assertion is supported by Adekola and Sergi who point out that the globalization process offers comprehensive solutions which most of the organizations have attempted to explore for quite a long time. What is more, it is vital to acknowledge that the world biggest companies usually have global corporations. Smaller business organizations have also increasingly started to participate in the cross border trade activities with the purpose of enhancing their business portfolio. Therefore, it is feasible to draw a few points about the magnitude of globalization particularly on the organizations. In this context, globalization provides a channel for the organizations to access international management as well as global entrepreneurship knowledge which is critical in the day to day operations of these organizations. Besides, globalization has also enabled the managers to get familiarized with the worldwide trade challenges for instance culture, food, technology, foreign exchange, and diversity that are vital factors for the organization that operate in the global market (Adekola, 2007, pp 66-69). Understanding an organization’s culture is essential for it to focus effectively on the worldwide market. Furthermore, the world today has kept on with the integration of not only economical but also social advancements in the communication as well as technology. The rapid pace of the world integration implies that the world is both integrating economically and also culturally. The managers of various companies have learned about the different international cultures along with their effects on their companies. As such, it is critical to take into consideration the cultural aspect and how the other worldwide organizations are able to address them especially in the designing of the company ethics which have to reflect the different cultures throughout the world (Adekola, 2007, pp 45-49). Corporate culture as well is a key factor of the globalization process in the organizations. In addition, globalization is imperative for the organizations to learn new and effective ways in their operations. Globalization has generated integrated markets and this is an economic environment which organizations should address. Therefore, this obliges organizations that operate in these markets to be able to learn new methods of breaking the domestic markets mentality and embrace survival skills which will enable them to effectively compete in global market. For example, organizations must learn new strategies of surviving in the economic recessionary times as well as open and free markets through formulating new rules along with standard ways to operate in the global market environment. Organizations at present discover growing talent and international capabilities (Bhagwati, 2008, pp 87-90). Lockwood (2006) holds the view that the workers for the different organizations have changed due to the demographic changes, labour mobility, aging population, and the global supply chain. Therefore, this requires modern organizations to continually invest in the human capital. Additionally, organizations have understood that for them to effectively compete in global markets, talent nurturing as well as management is a key driver for the success of their operations. The challenging worldwide business environment has also enabled organizations to formulate strategies that enhance workplace productivity which is intended to attract, develop, retain, and utilize individuals with the relevant skills as well as aptitude. Moreover, this is both necessary in the short run success of the organization and its future business requirements (Lockwood, 2006, pp112-114). It is also important for the organizations to anticipate future labour force changes since simultaneously, it brings about cost effective means for the organizations to recruit and retain top talent that they will need in future. Globalization offers an important avenue for exchange of ideas via technology and it has also played a key role in the introduction of policies which do away with barriers to free exercising of the economic activities among different nations. This has led to trade liberalization, mobility of labour, production deregulations, as well as the implementation of the international agreements (Kapoor, 2012, pp 56-60). This increasing opening up of the national borders for purposes of trade has also generates new and bigger markets for the different products and services in the world now. This is particularly of immense importance for the organizations because they are able to get new markets to sell their products, easily access cheap labour along with operating from a bit cheaper locations. Furthermore, companies have as well learned the different cultures of the world together with embracing them. Hence, in the long term the companies are able to benefit from advantages that amass due to the integration of different cultural aspects in the companies’ production, corporate, and marketing culture. What is more, organizations have also acquired knowledge which is very helpful in the interpretation of the different cultures. With this interpretation, companies are also able to develop social behavior which is only acquired by learning as well as experience. Social behavior as well is a key factor for the company’s success in the global arena (Marković. 2012, pp 89-91). Globalization has also brought with it changing leadership styles in most of the global organizations. The availability of the global managers who are able to understand and appropriately respond to global business has become a major asset for the modern organizations. For the survival and success in the global business environment requires managers who are able to effectively manage an organization’s operations particularly in the tumultuous economic times and the multicultural environment. Organizations which have operations in global market may access experimental knowledge as well as experience on the diverse cultures (Stonehouse, 2007, pp 110-115). They also attain capabilities which transform the global experience into effective management in the organization. Moreover, the international duties act as an avenue for the organizations to increasingly develop the global leadership proficiencies for their managers. International duties assigned to the organization managers usually act as a powerful tool in developing effective leadership skills. Such responsibilities offer opportunities for the managers to better their leadership skills and gain experience which shall positively benefit the company. Regardless of the benefits that come with globalization to the organizations, there is also a different line of thought on the globalization process. Individuals who are against globalization argue that it only boosts the profits for the big multinational companies to the detriment of the small organizations particularly in developing countries. The small organizations, found mostly in the developing countries, have difficulties in attempting to enter into the worldwide market (Cockfield, 2010, pp 66-69). Bibliography Marković. M. 2012. Impact of Globalization on Organizational Culture, Behaviour and Gender Role. New Jersey: IAP Adekola, A. et al. 2007. “The significance and paradox of globalisation in the 21st Century: The Role of Three Major Global Institutions in Selected Areas”, International Journal of Management and Enterprise Development, Vol. 4, No. 3, pp. 354-871. Homann, K. et al. 2007. Globalization and Business Ethics. Ashgate Publishing Ltd Gaikwad, M. 2010. Why Diversity. Retrieved on 2013/04/23 Bhagwati, J. 2008. In Defence of Globalization. Oxford, New York: Oxford University Press. Goodman, N. et al. 2010. “Using knowledge management to leverage training and Development initiatives”, Industrial and Commercial Training, Vol. 42, no. 2, pp. 112-115 Lockwood, R. 2006. 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