Globalization influences values, traditions and culture of organizations and poses new demands on global and domestic corporations. The article by Nadkarni and Perez (2007) unveil that globalization demands new ways of business and management, significant resources and knowledge. If local and domestic companies are able to transform and apply new patterns of behavior they will disappear. “Early international commitment reflects the degree to which domestic firms start with irreversible investments in foreign markets” (p. 160). The authors underline that companies have to accept the view that a neoliberal understanding of globalization is sustained and reconfirmed by powerful political institutions and economic corporations.
Organization behavior should change towards diverse cultural values and traditions, international communication and interaction. International companies ought to be sceptical of one-sided accounts that identify expanding economic activity as both the primary aspect of globalization and the engine behind its rapid development. The multidimensional nature of globalization demands that organizations flesh out in more detail the interaction between its political and economic aspects. Second, it emphasizes the importance of dialogue and interactions among different segments and levels of society. Governance is not a one-way street from the government to the governed, but a continuous process of mutual adjustments. Third, it underscores the importance, and by implication, the need to build institutional capacities and human competencies for good governance. Fourth, it does not limit its scope to only economics or politics but includes socio-cultural development similar to the capital resources.
Leadership in HR, R&D and IT is crucial for modern companies because only market leaders can succeed during the period of globalization. The most important is that organizations should emphasize the significance of shared values, mature understanding, and agreement for societal good governance. Shared values and strong sense of vision and community help to bind together the different segments and levels of society. This, in turn, helps to develop the foundation and enabling environment for good governance. Globalization needs good governance. Therefore, globalization, good governance, and the state are inextricably connected. It has been said that globalization undermines the role of the state and advances that of the private sector. In this case, strong ethical principles and rules should guide global corporations.
Nadkarni and Perez (2007) portray that ethics is extremely important because domestic companies expend their activities overseas and deal with diverse cultural groups and nations. It poses responsibilities and duties on these companies to prove fair policies toward mass consumers and business partners. It also has been suggested that deregulation’s logical conclusion is the privatization of public administration, or at best the preservation of a minimal state. In fact, corporations remain the single most important institution for shaping the future direction of globalization.
It is also the case that nationalism, tribalism, or ethnicity is not governed by rationality. Borders and nation–states are more than a matter of administrative logic, and while nation–states still retain the sole right to use force—even against their own citizens—the reasons often have more to do with ideology than rationality. In addition to forcing societies to reexamine and reconfirm their core values and collective vision, globalization can help eliminate or reduce dysfunctional narrow nationalism, tribalism, isolationism, racism, religious fanaticism, extremism, sexism and ageism. Every company should first develop or reaffirm its fundamental values—a shared vision and collective sense of purpose. Globalization involves fundamental societal changes and calls on governments, groups, and individuals to reexamine their priorities and trade-offs. Governments, communities, and organizations risk invoking resistance to globalization if they do not provide the necessary leadership and involve the citizens or employees in developing a shared understanding and commitment to a global open society.
References
Nadkarni, S. Perez, P.D. (2007). Prior Conditions and Early International Commitment: The Mediating Role of Domestic Mindset. Journal of International Business Studies, 38 (1), pp. 160-165.