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The world of business and management has witnessed radical changes in the last couple of decades that are primarily as a result of globalisation. The information has been reported in various websites such as the one on BBC website by Banerjee and Subhabrata presented in this case. Rapid advancements in technology have been the primary boosters of globalisation. People can now trade faster and at a higher scale than before, movements have been facilitated as well as communication enhanced across the globe. Globalisation has been used for the longest time to mean the process of integration and interaction among governments, people, companies, as well as nations which is facilitated by technology. Globalization is not a new term in the business and management arena but it has taken place over the years and will continue as it is a continuous process. Globalization has a profound influence on the decisions made by managers (Lerbinger 4). It is important that today’s managers revisit this contemporary issue in management and ask themselves how it impacts on their world of management. Solutions to curb the unprecedented consequences must also be figured out. The following discussion dwells on globalization as a contemporary issue in management and one that needs clear focus going into the future.
Globalisation is a continuous process whose impact can only be felt with time. The improvement in transport and communication has been a major factor of consideration. It has helped to greatly reduce the cost of production, movement of services and goods across national borders as well as boosting of communication among managers across the globe. It has also facilitated the acquisition of goods and services that are needed for various reasons in business and management. The process has helped other managers to learn from other managers through efficient communication networks and adopt policies that are essential to management. The variances in individual and societal tastes have also helped in encouraging globalisation (Lerbinger 3). It is said to increase the levels of economic integration and promote interaction across the globe. Other factors include the formation of trade blocks, the deregulation of capital markets and immigration.
The main achievement of globalisation has been in the trade liberalisation. It involves the removal of trade restrictions, import quotas as well as the reduction in the cost of doing business. The concept has achieved a great deal of merit with the common one being in the exposure of domestic economies to the global ones where there is a rich network for growth and access to key resources favouring the growth of businesses (Harvey, et al. 354).
In addition, globalisation has increased economic prosperity and increased opportunities in the world of management. It also facilitates a more efficient way of allocating resources according to economic theories. This is particularly based on the fact that many people engage in the businesses pulling resources together which benefit all. All in all, globalisation has helped a lot in the creation of employment and stabilization of prices for goods and services and the improvement of standards of living in both developed and developing countries (Harvey, et al. 357).
Consequences of globalisation
Consequences of globalization take various dimensions based on the people involved. It has both the positive and negative impacts. The demerits arise from the fact that it damages the biosphere threatening human existence by increased pollution, the erosion of traditional culture as well as increased levels of poverty. However, globalisation has brought along some good impact, the most notable one being the increase in global output. The Heckscher-Ohlin theory of comparative advantage looks at the concept of globalisation as having different factor abundance in different countries. The best technology has been facilitated by globalisation and hence the improvement in trade output. In addition, it has helped in availing products in areas where they would not be available and increasing the value of the world’s output (Banerjee, et al. 2009).
Moreover, globalisation has facilitated the distribution of income among the countries doing business as well as the sharing of ideas to facilitate their economic growth. On this view, the standard theory explains how income is expected to benefit the different countries through trade but in reality, this is not achievable. Most of the globalisation activities are aimed at benefiting the investor as well as the recipient with the highest flow of capital being among the two parties.
On the other hand, globalisation has led to undesirable impacts one being the making of poor countries poorer while the rich countries continue to become richer. However, according to standard theory, there is no basis for claiming that free trade benefits one party at the expense of the other. Therefore, the imposing of barriers does not in any way make the producers gain more than the receivers and vice versa. The theory also suggests that the trade favours the poorer countries in terms of unskilled labour as opposed to unskilled labour in developed countries. It claims that demand for goods produced by the unskilled personnel in the poor countries is higher in developed countries than the demand for goods produced by unskilled labourers in developed countries (Banerjee, et al. 2009). Moreover, globalisation is said to weaken labour unions in developed countries. The argument raised to support this idea is the fact that the availability of cheap labour in the global market has helped in decreasing membership to the unions thus weakening them. Many companies in transition prefer to have the cheaper labour to do the same tasks that would be done at a higher cost by local unionised members. In other words, as predicted by the news article on the BBC website, the loss of jobs is a reality with globalisation (Banerjee, et al. 2009).On the other hand, cultural diversities are weakening owing to the fact that interactions, similarities in tastes and preferences can bring about cultural uniformity. Therefore, managers of today require a different reasoning perspective owing to the changes that have come along with globalisation.
Managerial implications of globalisation
Globalisation in the business and management world has been deemed to have a profound impact on the role played by managers in decision-making and other complex interrelated decisions as presented by the news article. The concept has brought about the idea of global decisions impacting heavily on management. In this regard, global managers need to be aware of the implications this might have on their institutions and the ways of dealing with it. The type of task performed by global managers highly influences the role played in the global aspect of making decisions or on their capacity to deal with a global orientation to the ideas. Globalisation is a significant force impacting the management practices that require special attention. Its impact differs by regions and sectors of the world (Banerjee, et al. 2009).
Globalisation has impacted significantly on the environment shaping management practices and theories in the recent past. The spread of democracy and the fall in communism has intensified globalisation forces shaping behaviours and policies affecting corporate entities as well as nations and states of the world. The other significant thing ushered by globalisation is liberalization and increased privatization trends which leaves the corporate management with no option but to deal with a global context reality. The fact that globalisation process is taking place faster and at a higher level means that managers have to be adapted to cope with the realities unfolding from this concept. The unrestricted global mobility coupled with increasing information dissemination on factors of production and finances has led to the homogenization of norms and values. The process has, in turn, created new global markets but on the other hand leading to concomitant managerial challenges. In other words, looking at current facets of management such as sourcing, marketing, production and resource management, they are impacted by the trends in globalisation (Guedes and Faria 20).
Globalisation is a reflection of the huge challenge facing the international management. The bringing together of different economic states, religions of varying levels across the globe possess a huge challenge to the managers. The concept has brought about challenges in managing human resources, sales and marketing as well as public relations. The challenges have primarily been associated with multinational firms which are highly affected by globalisation (Harvey, et al. 369). Dealing with the issue is a huge challenge that will continue to characterise manager’s decision-making process even in the future.
In order for the managers to effectively deal with the eminent challenge posed by globalisation, it is fundamental that they possess focus on information, creativity, visionary thinking, and organizational change as well as make considerable investments. In the global market arena, consumer expectations, behaviours and consumption patterns have become increasingly harmonized which makes it difficult for managers to make decisions. In addition, certain cultural and infrastructure peculiarities continue to pose managerial problems that require managers to possess the above skills to be in a position to manage them effectively. The most significant challenge that the managers of today have to deal with is persistent diversity and increasing commonality in the global markets. In view of this, it is necessary that managers adopt localised way of dealing with issues and globalised strategies to deal with the challenges.
Managing responsibly and globalisation
Globalisation is not a factor to consider eliminating but the attention of managers should be geared towards dealing with the consequences of what it bring along. The management of issues in a more integrated world will go a long way in assisting managers cope with these challenges. Managers should embrace the attractive opportunities brought about by globalisation and develop skills on how to deal with the challenges.
One of the most important requirements for managers is the capacity to have a global perspective. This is driven by the fact that melting of national borders has made the geographical location of a manager irrelevant. Mangers with a global vision and perspective have a competitive advantage of embracing economic opportunities globally. Managers can exploit the opportunities that doing business globally can bring as opposed to regional or local trade (Banerjee, et al. 2009).
In addition, managers are required to exploit the opportunities brought about by human diversity and address the challenges associated with it. The adoption of a multicultural approach which is progressive in nature in regard to clients and products can help managers cope with the challenge. A contemporary manager must develop appreciation and knowledge in social, cultural and economic fields to make significant changes (Banerjee, et al. 2009).
The continuous sensitization on the attitudes, approaches and values to decision-making and problem solving are quite important for managers bearing in mind that globalisation is a continuous process. A proficiency in the management of diversity both locally and internationally are quite crucial in the harnessing of a multicultural approach in the workforce and ensuring that production is done at optimum levels. The workforce diversity is on its own an asset that managers are required to apply strategically to improve on their output and performance. Managers must understand the role of diversity in their engagements in the global market.
Moreover, a successful manager will be required to deliberately push frontiers of innovation with globalisation. Integrating innovation has become a crucial element that managers are required to have to propel economic efficiency. The modern manager must embrace innovation as a clear way or catalyst of change in regard to the continuous time frame. For managers to compete in a contemporary global market, their services and products must be sensitive to the changing consumer needs (Harvey, et al. 354). The diversity of the modern market requires that the manager embrace research, technological advancements and innovation to compete effectively in the modern world with drastic changes.
In summary, globalisation as driven by technology, innovation and new managerial and business strategies poses a great challenge to the managers. It has propelled the creation of new opportunities and an avenue for diversifying the global economy. The concept forms a crucial piece of consideration in the world of today. Managers are required to embrace it since they cannot stop it. Managers should have a full realization of the impact it brings since majority of the employees they are in charge of, are affected by the diversification and other impacts relating to globalization. The capacity of dealing with those challenges will form an important attribute of managers both today and in the future. One of the major fears brought about by globalisation is the thought that it will create unemployment and the consequences of unemployment. Therefore, managers can only find their worth in recognizing the opportunities that globalisation has and the capacity to deal with its implications.
Banerjee, Subhabrata B., et al. "Managing Globalization." Oxford Handbooks Online, 2009.
Bowler, Tim. "Will Globalisation Take Away Your Job?" BBC News, 1 Feb. 2017, www.bbc.com/news/business-38600270. Accessed 9 Feb. 2018.
Guedes, Ana L., and Alexandre Faria. "Globalization and international management: in search of an interdisciplinary approach." BAR - Brazilian Administration Review, vol. 4, no. 2, 2007, pp. 20-39.
Harvey, Michael, et al. "Globalization and its impact on global managers' decision processes." Human Resource Development International, vol. 12, no. 4, 2009, pp. 353-370.
Lerbinger, Otto. "Globalization Creates the Need for Global Managers." The Global Manager, 2014, pp. 3-22.
McGregor, Harriet. Globalisation. London : Wayland., 2014.
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