Background
Scientific inventions and innovations have resulted in better transport and communication systems; the improved systems have called for a different approach in decision-making. Globalization is a process of integration of social, economic, and political ideologies into a global network; the term is used to refer to developments that facilitate cooperation among world nations in different spheres (Manfred, 2003).
Businesses are affected by economic, political and social trends in their country/countries of operation; business decisions are the drivers of an organization. This paper discusses how globalization has affected leadership decision making in modern contemporary business environments.
Modern contemporary business environment
With the economic integration, the flow of factors of production and businesses has been facilitated; improvement in information and communication technologies and transport networks has an impact on modern business environments.
Businesses can now venture in different parts or can transport their goods and services effectively; with globalization, the markets have been enlarged and at the same time, different players have entered into business in different countries (Harvey, Fisher, McPhail, and Moeller, 2009). Due to globalization, all the stages to decision making has been affected as follows:
Defining the problem
When making a business decision, the first step in making a good decision is defining the challenge, problems vary with different situations. With globalization, a problem should be looked from the global perspective; that is how it has affected the current business in the domestic country and how it is likely to affect the company in other parts of the world.
In modern contemporary business arena, well-defined problem must see the problem from the big picture perspective (global perspective); the management should not concentrate on understanding what is prevailing in their sector or country but should consider what other sectors or countries are going through (Williams, 2001).
Facts collection
The second stage in decision-making process is to seek information and data from relevant sources to assist in coming up with alternatives. Globalization has facilitated the flow of information from one country, sector or continent to another; this happens through communication networks supporting globalization. In this stage, the manager should gather all relevant data and facts; with globalization, mangers get access to variety of information, facts and data from other companies or countries that have faced a similar challenge.
It is from the facts and data that leaders develops various alternatives of choices that can be used to solve the problem at hand, alternatives can be derived after an analysis of the results of various alternatives as implemented in other companies who have accepted to share their information. (Wheelen and Hunger, 1999).
Traditionally there were various methods of collecting data; they included researching, brainstorming and experimentation, globalization has added other methods of collecting information, which include virtual teams and information databases. Virtual teams are a group of experts in a certain area that work together via the internet with the aim of offering solution to different business problems that fall in their profession.
When managers are deriving solutions, they are consulting these groups; since these groups work over space and time, they offer timely and updated information that can offer effective solutions to business problems. It is the manager’s duty to choose the right method to adopt because different problems call for different methods.
Globalization has opened a business opportunity where there are international organizations working across time and space, they are offering “readymade” solutions to business problems so when a certain business is faced with a challenge then it only need to consult the businesses, an example is the information and technology online firms that are offering customized software to business enterprise.
Depending on the problem, the people to be consulted differ, globalization has opened the floor of consolation to involve international firms and experts. However, an effective manager should ensure that he/she consults those who matter and those who know.
Consultation assists in making a more informed decision and assists in generating more alternatives of choice. Their opinions and viewpoints should be considered in the final decision-making, but the manager should always keep in mind that it is his/her responsibility to come up with the right decision (Williams, 2001).
Choosing the best alternative
With the collected wide range of views and information supported by inputs from the global environment, management should take time and ponder over the issues; time taken depends on the urgency of the decision, using the information, then the best strategy is established.
After the strategy has been implemented, lots of support of the decision is required to ensure that the whole organization or the departments concerned have adopted it effectively. It is not always that a decision made bring the expected results; thus, feedback from the people on the ground and the general performance of the business should be sorted, so as areas that need improvement are recognized.
When improving strategies, it is important to consider the global environments and take their views and the effects that will occur with different improvement strategies (Bridge and Dodds, 1975).
Discussion
As economies expand and trade with each other with assistance of improved transport and communication technology, the world is becoming a global village. Economies are joining efforts to develop an economic, political or/and social block as they prepare to play a role in the global environment, this has in turn affected managerial decision-making process.
The main role of managers is to make timely, responsive and acceptable decisions; globalization has created a different business environment than the traditional frameworks of business. When managers are making decisions, they are forced by the business environment to make decisions that can facilitate competitiveness internationally.
Globalization has come with solutions to business problems; in contemporary decision making, manager are considering the available solution in the markets since they have come to facilitate smooth running of business. For example, globalization has resulted to a number of outsourcing services businesses like international businesses.
When managers want to make an international transaction that involve the transportation of goods from one country to another, among their alternatives will be the logistics companies operation in the economy.
Globalization has brought issues of political and social dimensions in decision-making; when managers are making decisions, they have been forced to consider the effects that the decision will have on the social, political and environmental dimensions of the global population. For example, when selling in international market, managers should have culture intelligence tools and use it when making decisions.
When the world has joined efforts, then there are changes in the business world. The business environment created by globalization call for managers to have a wide knowledge of current business trends; they should consider things from a global perspective when making business decisions (Bolfikova, Hrehova and Frenova, 2010).
Conclusion
Decisions are the driving force in an organization; with globalizations, managers should interpolate the prevailing conditions effectively to come up with timely and effective decisions. The quality of decision that managers direct and focus their organizations; the growth and competitiveness of an organization is influenced by the quality as well as acceptability of decisions made by managers at all levels.
To come up with a good decision there are three main stages that a manager should follow they are, defining the problem, data collection, and choosing the best alternative.
References
Bolfikova, E., Hrehova, D. and Frenova, J., 2010. Manager’s Decision-Making in Organizations–Empirical Analysis of Bureaucratic vs. Learning Approach. Journal of Economics and Business, 28, 1, pp. 135-163.
Bridge, J. and Dodds., J.,1975. Managerial decision making. London: Taylor & Francis.
Harvey, M., Fisher, R., McPhail, R. and Moeller, M., 2009. Globalization and its impact on global managers’ decision processes. Human Resource Development International, 12(4), pp. 353-370.
Manfred, B. ,2003.Globalization: a very short introduction. Oxford: Oxford University Press.
Wheelen, L. and Hunger, J.,1999. Strategic Management and Business Policy: Entering 21st Century Global Society. Massachusetts: Addison Wesley
Williams, S., 2001. Making better business decisions: understanding and improving critical thinking and problem-solving skills. London: Sage