Introduction
Globalization can be defined as a force or a process that connects more and more people across heretofore-impermeable economic and social boundaries. This means that people become connected across large distances with the assistance of information technology and human transport. This process can also be seen as the advancement of human co-operation across national boundaries, therefore making the world ”a global village”.
”Globalization” is a term that is often used to explain today’s world. Its terminology has gradually been accepted by the greater public and various scholarly personalities have integrated it as a vocabulary it into their field of research. Globalization has also increased the inclusiveness and the unification of economic systematization, global relations, and has led to a trend of doing business in different organizations (Suder, 2007).
Proponents of big businesses look at globalization as a blueprint of a straightforward policy agenda that promotes economic growth, increased trade, and integration into the global economy. Therefore, from this perspective, globalization is viewed as unequivocally benevolent and corporations are seen to be leading the way towards spreading the benefits of globalization around the world.
Globalization as a trend of doing business
The American way of doing business has co-opted globalization into commercial Americanization of and by non-American firms. Post World War 2 saw many American companies expanding into foreign markets while also seeking some mystical formula for success in Japanese management techniques.
Asian, European, African, and Latin American firms quietly and gradually learned, refined, and adopted the U.S. business models and practices the American way, while consumerism was still capturing Americans’ hearts and minds (Mott, 2004). American businesses have successfully penetrated world markets by largely relying on adding local flavor to a product that has proven successful in-home markets such as the McDonald’s model of globalization.
To expand market penetration into commercial success, U.S. firms have uniformly presented instrumental reason and standardization to integrate those markets into a global economy.
Those firms that have succeeded at going global have recognized that the American model is as deep as it is broad and as local as it is global. The successful firms have learned to adapt to local tastes, identify what appeals to or offends the local customers, and change cultural and political climates even while standardizing.
The managers of these organizations are, therefore, periodically required to maintain a delicate balance between acting locally and thinking globally. This line of thought has led to companies in smaller countries such as Nestle in Switzerland and Heineken in the Netherlands, recognize that their domestic markets were too small to sustain much growth and therefore moved into the international arena, with controlling market costs and reducing labor costs being on their main agenda.
The European Union (EU) has also played a significant role in the international business environment by signing trade agreements with different strategic partners, and this has led to the globalization of many of its corporations. The EU has intensive trade agreements with the U.S on integration, business dialogue, and dialogue between consumers, trade unionists and environmentalists, which talks about competition law and recognition of technical standards.
The agreement further implies on scientific and technological co-operation, on extradition, on mutual legal assistance, and the cooperation on satellite navigation systems (Suder, 2007). The managers of these corporations will, therefore, be forced to redesign their organizations to act according to these agreements.
The trading power of the member states is embodied by its role as the world’s leading exporter of goods. Member states also enjoy comparatively sound GDP on a country-to-country basis. Such an agreement has assisted the EU member states to penetrate the U.S market through their various corporations, and as compared to other trade powers globally, Europe benefits from an exceptional business environment. This can be seen through the following table;
Table 1.0 Worldwide exports of the EU
Country Percentage of total Percentage of total
(Suder, 2007)
Implications of globalization towards organizational behavior
The environment of business has changed at an unprecedented rate, and the understanding and addressing of this environment has been left to top managers of these businesses. The most significant source of change today that is impacting many organizations is the increasing globalization of organizations and management. The primary concerns are the employee and managerial behavior in an organizational setting.
a) Human (employee) behavior towards organizational globalization
Most organizations do tend to take an international outlook with the globalization of its companies. Firstly, cultural and national boundaries do not necessarily coincide. Some areas of Switzerland are very much like Italy, other parts like France, and still other parts like Germany. Similarly, within the U.S there are large cultural differences across the West Coast and the East Coast. This, therefore, sets the stage for behavioral variance across cultures on the international management of these organizations.
Employees in companies based in Japan, the U.S, and Germany are likely to have different attitudes and patterns of behavior; therefore behavioral patterns are likely to be widespread and pervasive within an organization. Secondly, with culture being a major cause of this variation, the shared values are often taken for granted, that help people in a group or organization may conflict with the organization’s policies (Mott, 2004).
Although the causes and consequences of behavior within organizational settings remains quite diver across cultures, organizational structures still appear to be increasingly similar. The managerial practices at a general level may be more and more alike, but the people who work within organizations still differ noticeably and this may affect organizational effectiveness.
b) Managerial role towards Organizational Globalization
Individual variations in people from different cultures shape the behavior of managers and their ability to manage, just as with employee variations. In general, these differences relate to managerial beliefs about the role of authority and power in the organization. For instance, due to some culture variations, some managers may tend to believe that the purpose of an organization structure is to let everyone know who his or her boss is, in relation to medium to high power structures.
Also to some financial managers language barrier may hinder them from doing international business, for their lack of understanding what other foreign competitors are doing, and so they may need a guide to capital markets or a translator (Mott, 2004). These barriers may hinder managers from taking the right approach in important decisions within an organization.
Implications of globalization towards world economy
Globalization is good for market exchange, for businesses, and also to those who have a propertied stake in the economy and also good for consumers. The rise in efficiency that globalization engenders does increase consumers’ options and reduces the price of some goods and services, and this therefore, means that the average consumer has more spending power and access to better variety of products.
Foods such as corn, mango, tomatoes, strawberries and avocado, do not have to be eaten seasonally due to its availability or not, as today, grocery stores are ripe with all varieties of fruits and vegetables year-round. All this has been made possible due to the trend of organizational partnerships, and globalization has therefore given consumers access to perpetual growing seasons.
Apart from making this positive step towards strengthening world economies, globalization has been seen to favor wealthy nations, especially the economic elites in those countries, as well as the well-to-do in less well-off nations. The poor have been exploited across the board and they do not share in the wealth generated by globalization from above.
In reference to international management, most organizations tend to be bias when it comes to employing and do give high positions to ”one of their own”, and the local communities where such organizations are situated, tend to go at a loss. Similarly, power is linked to globalization from above while a relative lack of power is linked to globalization from below.
Executive Summary
Through fortunate or unfortunate historical events, we have seen here how globalization progressed and rose amid these occasions, such as the World War 2 period. Also, through innovations in the information technology sector, globalization has been driven across the international waters and territories, therefore bringing a climate of business and investment.
It has also led to the signing of major international trade agreements such as the one between the U.S and EU, which has not only impacted the economies of the two regions, but the world at large. Although globalization has taken a master concept in the world today, it has also attracted critics with powerful attacks against it with concerns of national interests being a major issue. Despite all these concerns, globalization is not an accident and will not be easily stopped.
It is the result of long-standing policies between different nations and organizations, and this has seen the United States and other countries create a strong integrative force in the global economy. Many countries and communities have utilized and embarked on the opportunities created by globalization, and this has led to the increase and rise in their economies. Although in some areas it has led to insecurity and lack of control to their economies, which they once had.
The model of globalization has also risen on issues concerning cost manipulation on certain products from these companies due to the control which they have on the markets. However, globalization has the potential of raising collateral profits which may help sustain economic growth in the long run.
Due to the rapid growth of globalization, some corporations may imply some indirect methods of channeling their businesses, which may have a negative impact on various economies. Major differences are also observed in international management and relations within organizations and culture variations do tend to leave a dent towards globalization.
Manager- employee relationship leaves a lot to be desired with concerns of employment biasness being rampant. Managers have a hard time accessing the organization’s new global perspective and therefore have to address the local concerns which may take them precious time, this will make their decisions and assertion of power quite cumbersome. Despite these challenges, globalization has opened up doors for international interaction with new and innovative ideas being shared.
Conclusion
A massive cloud and attitude of openness are required in matters dealing with financial globalization. The effective gains made by globalization can only be sustained and progressed if lawmakers in different countries come up with laws that will expose and cub any malicious acts that various organizations may convey when conducting their businesses.
These laws can be better achieved if different trade organizations and partners have a mutual understanding on the same. These agreements and laws should not be seen to favor a particular country or trading bloc, and the minority countries or people should not be exploited in the process.
In relation to international management, various organizations should also come up with an induction course for managers so that they may adapt and learn the local cultures and environment for better relations with employees and locals. The attitude of globalization as a trend of doing business has created an open market and new opportunities that if well managed, can have a positive economic and social impact to the greater society.
References
Mott, W. H. (2004). Globalization: People, Perspectives, and Progress. Westport: Greenwood Publishing Group. ISBN-0275979172, 9780275979171.
Suder, G. (2007). Doing Business in Europe. London: SAGE Publications. ISBN-1412918464, 9781412918466.