Globalization is a contemporary term that refers to the processes and procedures employed in an effort to integrate all nations across the globe through the exchange of ideas, culture and various products. Evidently, there has been increased globalization across nations in the contemporary era in a bid to derive associated significances or benefits.
The final result of the entire process of globalization is the worldwide exchange of both natural and cultural resources among nations. Globalization is achieved through the development and advancement in the key sectors of the world economy, such as technology, culture and the political systems.
On the other hand, international strategy is one of the most vital plans employed by many companies and firms conducting international business. The strategy entails the development of alliances among the business firms as inter-firm collaboration operating within a particular economic space in specific period of time.
This greatly boosts and facilitates the achievement of the alliance’s goals and ambitions. Full realization or the attainment of international strategy involves three major approaches. These include global, transnational and the multi-domestic approaches. The three approaches have own differences in the manner of operations.
Global approaches to strategic management involve the eradication of many barriers that existed between many nations thus offering hindrances to international business activities majorly during the latest half of the 20th century. Through the removal of such barriers, many nations acquired and benefited form a competitive advantage.
There has been great success in nations where global strategies are fully understood and applied besides the operations and dynamics of global industries and competition respectively. Therefore, it is important for managers to have a deeper comprehension of the global strategies and their applicability within nations and industries.
Global strategy is advantageous to the nations since they benefit from economies of scale owing to the access to more market opportunities. In addition to market opportunities, the nations are able to exploit another nation’s resources, such as labor and raw materials for industrial development.
There exists an extension in the product life cycle as well as operational flexibility, which involves a shift in the cost of production for various commodities across the globe. On the other hand, global strategy faces the risk from the diversification of macroeconomics since some business cycles lack a perfect correlation in some countries. Due to the diversity in the environmental operations, operational risks also put a major challenge to the success of the strategy.
Transnational approach to international strategy in globalization involves the process of transcending the boundaries of a nation. As opposed to the past business periods when globalization has been majorly dominated by the large enterprises, technologic affordability has greatly empowered the smaller enterprises to take an active part in the exploration of the global markets.
Organizations that have adopted the use of transnational approach to globalization have enjoyed competitive advantage as opposed to the other organizations waging their competitions over the domestic markets. The advantages associated with transnational strategy include wider access to the global markets as well as flexibility. However, language barrier still remains one of the greatest challenge across the globe.
Multi domestic strategies entail a set of business plans that are in use by organizations, which run their business activities in a number of countries at a time. The approaches usually differ in every country of operation. A multi domestic company must carefully choose its markets in every country with reference to the available market gaps thus enjoying a competitive advantage. However, one of the greatest challenges of this strategy is the language barrier, which hinders effective communication in the host countries.
The three levels of IT use in organizations occur as operational, decision making and strategic management. Operational levels of IT use may be employed in the day to day running of basic operations within the organization, such as accounts and finance management record keeping.
The use of IT in the process of decision making may be employed in the human resource management through development and research. IT use in the strategic management is important in the design or development of records regarding changes in the product design procedures.
Tacit knowledge refers to the information that people carry in their minds and that may not be easily accessible in a moment of need. This type of knowledge should be rarely shared with others due to inability to fully share the information contained in mind. On the other hand, explicit knowledge refers to the documented or coded information. Such knowledge can be easily shared with the others due to its full accessibility.
Flexible manufacturing is beneficial to the organizations since it maximizes profits. The approach ensures that manufacturing industries diversify in their production in order to trap full market demand. Similarly, mass customization also plays a major role in profit maximization due to the fact that the entire production process aims at responding primarily to the needs of the market.
Ethics and the four forces of ethical decision making, such as the personal ethics and the organizational ethics, are important in the maintenance of mutual responsibility and order within the premises of the organization and in discharge of duties or services. The maintenance of proper ethical standards within the organization ensures professionalism due to which the duties are carried out hence promoting the cordial relationship inside and outside of the organization.