Prior to discussing the effectiveness or ineffectiveness of the needs model under the conditions of globalization; it is of the crucial importance for us to define it and identify the major principles of this approach. In addition to that, the process of globalization also has certain effects on the functioning of the needs model. It should be pointed out that such policy was developed in the eighties McNamara, who was the first to prove that modern companies should adopt certain amendments to the polices in order to survive in the ever-changing economic conditions (Keith A. Neuber, 1980). Although this economic doctrine has often been questioned, its basic tenets may ensure successful functioning of global organizations.
The essence of this theory lies in the following: any company, who claims be cost-effective should primarily take into consideration the need or demands of its stakeholders. Probably, it would be better for us to give a clear interpretation of such notion as stakeholder. In this case, this term should not be understood only as someone who possesses certain percentage of share. This notion is much more complex, it can be defined as any parson, group of people, or organization, able to influence the development of the company in a positive and adverse way. We should first speak about employees, clients, investors, suppliers etc. The company may either accept the demands of stakeholder or reject them but under no circumstances, the management may overlook them (Richard Pettinger, 2002).
As regards, its efficacy of the needs model in the United States of America, we should mention that constant process of globalization offered new opportunities to American companies, in particular, it became quite possible for them to outsource domestic production to developing countries, which eventually resulted in unemployment among local workers and subsequently low demand for the companys products. The main problem, which the economy of the United States has recently encountered, is that American companies place special emphasis on the interests of their clients, investors, suppliers, but not on those of their employees. In fact, we may see some kind of chain reaction, American organization were trying to find the path of least resistance, which in fact them led them to a deadlock. Actually, one cannot say that the needs model is ineffective or it has detrimental effects on the development of the country, the only controversy is how to set priorities in the most accurate fashion.
In order to substantiate this statement we may draw parallels between the United States and Japan. Despite the fact that in this country, large corporations also had access to less expensive labor resources, they decided to focus on the interests and needs of their employees and clients. Robert Reich argues that in the overwhelming majority of cases, employees and stakeholders may be viewed as a single entity (Robert Reich, 2007). As a result, the world economic crisis does not affect Japanese economy as strongly as it does in the US. It is quite possible for us to say that the efficacy of needs model mostly depends on the policy, pursued by the government or by the company.
Thus, we can arrive at the conclusion that the needs model may still be applicable under the conditions of globalization if the companies understand the interests of all stakeholders should account. As regards the United States, we should say that large corporation failed to see that clients and employees represent the same group of people.
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