Impact of Globalisation on the Cultural Environment of Business - Essay Example

?Impact of Globalisation on the Cultural Environment of Business Table of Contents Introduction 3 Findings 4 Theoretical Framework of the Analysis 4 Analysis of the Evidences Related to Globalisation 6 Microsoft 9 Globalisation at Microsoft 11 Impact of Globalisation in Microsoft 12 Conclusion 13 13 References 15 Introduction Globalisation refers to the process of building global relationship among people, economy, and culture of different countries. It involves distribution of the services and the goods in the global marketplace. Globalisation also reduces the trade barriers such as, import quotas, tariffs and export fees among others. Globalisation includes the transfer of required skills, knowledge, methodology and labour. Globalisation creates a significant impact on the business environment of every economy. The impact of globalisation can be either positive or negative. Globalisation specially puts its impact on the culture of an organisation. The positive impacts can be termed as increased employment while the negative impact of globalisation on businesses can be identified as fierce monopolistic competition. It also helps to share the ‘technical know-how’, the spread of culture and education and the ethical-legal effects. Globalisation also raises various challenges for an organisation such as increased rate of operational costs, the increased rate of slavery and child labour, increased rate of terrorism all over the world. Globalisation has significantly influenced the famous multinational company of US, Microsoft. A publication report of Oxford University Press has stated that, “the events in one corner of the globe can have a major impact on others, sometimes good, sometimes bad” (Oxford University Press, 2011). Microsoft, the famous multinational company of United States of America is engaged with providing Information Technology based services to global consumers. It also possesses patent rights for manufacturing various kinds of computing products with the help of multiple divisions of production scatted all around the world. Microsoft deals in the division of the online search engines services such as Bing, Skype and also in the interactive entertainment business segment. Microsoft also serves their customers with ‘Microsoft business solutions’, ‘Windows phone division’, Windows & Windows live division’ and ‘Microsoft office division’ among others (Oxford University Press, 2011). The major objective of the study is to highlight the impact of globalisation on the cultural environment of the business in the USA. The paper would involve the renowned multinational company, Microsoft to analyse and to evaluate the various theories and factors of the impact of globalisation on the business culture. The study would also involve a conclusion for the overall discussion. Findings Theoretical Framework of the Analysis Globalisation is one of the most important and popular trends in business at present times. Globalisation involves the process of sharing of knowledge, skills, education, labour, economy and social-political environment. There are certain positive and negative effects of globalisation in every organisation which are globally connected. The culture of a business considers the personal traits, different languages, races, religions among others in their approach to globalised business. The various positive effects of globalisation consist of factors like increased competition. These factors influence the companies to perform better and to produce quality goods due to the competition among them. These factors also focus on the satisfaction of the customers and to produce improved services and goods quality. The other positive effect of globalisation is in relation to employment. Due to the globalisation the companies are trying to be more efficient and goal oriented with effective skills, labour, and improved potential. According to Wright, “more demanding skills are needed, especially with the growth in the need for so-called knowledge workers” (Wright, 2006). Globalisation has also enhanced the economic condition of various nations fostering the virtues of foreign trade. The business entities that are engaged with businesses in other countries through export and import operations are observed to have a substantial effect on the economies linked through the business. Due to globalisation economically linked countries such as the China and the US among others are also sharing ‘technical know-how’, which augments the transfer of different methodology, technology and innovation and knowledge from one nation to the other. Globalisation has spread cultural values as well. Due to globalisation various countries can share their cultural values, which include different languages, music, movies and cultural environment among others. There are also certain negative impacts of globalisation on the various countries. For instance, globalisation is often observed to increase the overall cost of a business in terms of taxation and currency exchange rate among others due to the global transactions. In addition, it is also observed that the cost of labour and transportation within the local territory is lesser than the cost of transportation and labour from international markets in many instances (Pearce, n.d.). Globalisation has also raised the challenges of child labour and slavery mostly in developing countries which act as social barrier to the businesses operating in those regions. It has also increased the unethical activities. As globalisation has made the transfer and the transaction of goods and services free through borders, it has resulted in high possibilities of terrorism and criminal activities. Globalisation is also observed to increase income inequality in the society of various nations. According to Pearce, “One distributional outcome of this would be worsened international inequality, in that enhanced benefits would normally accrue to interests in more developed countries at the expense of reduced benefits in host developing countries” (Pearce, n.d.). The environment and the natural resources are getting degraded due to the immense use of the resources from the natural sources. These resources are needed for the large number of industries to support the industrial growth and gain sustainability against the competitive environment presented by globalisation. The excessive uses of energy, high emissions rate of gases and pollution all these factors are disrupting the ecological balance. According to Roy, “All these changes impacts business environment” (Roy, 2005). These are the various issues and impacts of globalisation which affects the business and the culture of a business in countries which are economically linked. These factors influence the learning of cultures from each other and also include the domination of a particular culture. According to Chhabra & Kumar, “the socio-economic aspects of digital economy have been explored comprehensively to visualize their impacts on business transactions, technology, culture and education” (Chhabra & Kumar, 2009). Analysis of the Evidences Related to Globalisation The impact of globalisation in the USA can be explicitly observed in many ways. According to Ronnie Lipschutz, there is an effective relationship among global business culture, conflict and globalisation. He also stated that the blend generated by globalisation affects the base of the hierarchy and the social structures. The trend of globalisation has matched up with the various latest threats to the security of the United States of America. Due to the globalisation, the USA is facing a cultural distortion, loosing trust on the norms and the rules of the country and also facing problems regarding conventional religious practices. According various economists, the USA would be soon concurred by different threatening forces. As an effect of globalisation, the USA is losing the cultural and social values due to the increasing migration rate which has resulted in a mix of cultures and there is no particular US culture in the country. According to Bertho (2008), “American popular culture, especially from the late 1960 to the 1980s, has often reflected a sense of confidence and triumph, since the 1990s many television programmes have express red fears that sinister forces somewhere out there in the world are about to conquer America” (Bertho et al., 2008). Globalisation either forces the growth of the economy of a country, democratic freedom and the prosperity and restraints of the human rights. In the case of the USA, globalisation is known as also ‘Americanisation’, due to the rollover of the American culture. There are certain laws, rules and regulations on the transactions of the products of the USA. Most of the Americans and other citizens have felt the problem regarding the forceful implementations of the American culture on other regions by the companies, outside of the democratic control of these citizens. The activities of International Monitory Fund and the World Bank accumulated with the social trend were also believed to create a significant impact on the versatile American business environment. In this context, the effect of globalisation can be observed in relation to the social trend and global operations of regulatory bodies creating an impression on the varied socio-economic cultures persistent in the overall American milieu. According to Rothenberg (2003), “The impact of globalization on culture, for example, depends on whether one thinks that local cultures should be protected from outside influence, or whether one thinks that new cultural creativity results from interaction and mixing of ideas from different cultures” (Rothenberg, 2003). In recent times, the American economy has not been directly influenced due to changes in the global business environment, which is majorly because the percentages of American companies networking internationally are comparatively more than the number of international companies entering the American business environment. In most of the nations, the undersized foreign sectors would face proportionately little influence from the external sources. According to Whichard (2003), “A census of U.S. direct investment abroad for that year marked the first appearance on a U.S. Government survey of questions on the financing and operations of foreign affiliates of U.S. companies” (Whichard, 2003). The US government has taken two approaches where in one hand, the US government has opened the gateway of markets and trades on international context; on the other hand, the US government has approached towards the erection of certain barriers against the markets in case of comparative advantages such as international trade laws and employment rules and regulations among others. According to Elortondo et. al., “United States subsidies to domestic cotton growers alone will have been about $4 billion in fiscal year 2003, or around three times U.S. foreign aid to all of Africa. The subsidies hurt poor farmers in North and West Africa, for whom cotton is the main cash crop” (Elortondo et. al., 2005). The American government has taken certain approaches to enhance the quality of the education among the youth of the country which in turn is beneficial in useful to develop skilful labour force. Basically, the USA is not against globalisation but they are lagging behind far from the economic competition in the global market which reflects a conservative economic stance. This in turn tends to create an impact on the business culture of the region obstructing the business entities to explore their potential in the global market. According to Garelli, “USA and France are the two industrial nations that show the biggest difference between the performance of their governments and the performance of their economies” (Garelli, 2006). Microsoft There are various organisations in the USA which are into globalised markets among which Microsoft can be regarded as one of the leading IT based companies. Microsoft is a multinational company headquartered in America. Microsoft deals in various computing products such as, online services, various tools and servers, Microsoft business solutions, Microsoft Office, Windows phone division, Windows live division and Skype among others. Microsoft was founded in the year 1975 to explore the dimensions of IT sector and computing in the global market. The company was founded by two childhood friends Bill Gates and Paul Allen. Microsoft has been in the field of innovation for long. It focuses on the practices of procurement. Microsoft has made rules for their vendors to be certified under the procurement group of the Microsoft. It helps the company to calculate or to measure the value of the costs for the produced services and products. Under the procurement method of Microsoft, the suppliers also enjoy the positive experiences of business. Starting from the year of establishment till date, the company has been providing its customers with variety of products and services and also with the innovation of products (Microsoft, 2012). Globalisation at Microsoft With due effect of globalisation Microsoft has proved itself as one of the successful businesses in the current globalised market. The company is in a continuous process of innovation involving different markets and IT product ranges as well. For instance, the company focuses on involving foreign language editors to provide the customers with ‘single-binary’ applications which can resolve challenges in terms of cultural diversity, thus raise customer satisfaction in the global market. The internationalisation of Microsoft includes two major factors namely ‘World–Readiness’ and ‘Localisation’. Microsoft also focuses on the cultural issues under globalisation, with the help of which the company has been able to strengthen its foothold in the international market. According to Microsoft, “Once inside, you can explore the vision, products, culture, and history of Microsoft” (Microsoft, 2012). In the year 2005, Microsoft has announced investment worth US$ 1.7 Billion in India, which has been identified as a leading market for the software based products and an emerging economy. Microsoft had also announced that they would double the workforce in India within the next coming four years with the help of 3000 new jobs. Similar measures have also been taken by Microsoft in other countries such as China among others to spread its business globally. Microsoft has reached almost every corner of the world with their products and services, to serve users of every age group. According to Daggett, “In December 2005, Microsoft announced that it plans to invest $1.7 billion in India and nearly double its work force there over the next four years by adding 3,000 jobs.” (Daggett, 2005). Impact of Globalisation in Microsoft According to Bill Gates, the Chairman and the Co-Founder of Microsoft, the ‘information technology’ fetches people to a hub. He has also stated that the immense growth in the world of personal computers has revolutionised and benefitted the business of the company but this growth of the business also involves the social and the cultural impacts as well. Bill Gates “spoke about the role information technology can play not only in the office, but also at school, at home and everywhere in between” (Microsoft, 1999). Due to the impact of the globalisation, the company has decided to spread its networks further in the future. The company would proceed towards the developing and the less developed countries to serve the needs of the business institutions in those regions. Microsoft has spread almost all over the world with the help of globalisation. These strategies and business plans are the results and the influences due to the positive outcome of the globalisation (Microsoft, 1999). Conclusion Globalisation is a key factor for every business of today all across the world. Almost every organisation is trying to get into the global market for better competitive advantages and better brand value. Globalisation involves different cultures, languages and economies of different regions globally. Globalisation describes the procedure of non-dependencies of the internal factors on the culture of a particular region. In order words, it ensures networking beyond geographical boundary. The globalisation has its positive and negative impacts upon the USA economy, culture, and languages. The USA as a nation has been benefited with the aid of globalisation like better skills, knowledge, labours and superior technology or methodology. In the USA, globalisation is also known as ‘Americanisation’. But, globalisation has certain negative impacts as well in the culture of the business in the USA such as, the mix of culture, languages, and lifestyle. All these factors affect the culture of the USA as well as the economy. Microsoft is a multinational company in the USA dealing in the computer related products and operating system of computers since 1975. Microsoft is one of the biggest examples of the globalised businesses. Microsoft endeavours to provide their services and products to the local as well as the global customers to raise the value for their brand. Microsoft is dominating the world of operating system since last 37 years. Microsoft has planned to grow further in the coming future and the company has taken various decisions in order to attain their endeavour. The company serves their products in various native languages, and based on the various cultures which can prove as quite effective in dealing with cultural diversity related challenges attaining better customer satisfaction and loyalty at large. It can also prove to be highly advantageous in deriving employee satisfaction in the various subsidiary units of Microsoft operating in the different socio-cultural regions. These features are likely to boost organisational performance and its competitive advantages in the global context. In relation to the above study, conclusively it can be stated that the globalisation has both positive and negative impacts on the USA and the cultural environment of a business. The impacts can be ensured to be positive when effective approaches are taken by the business to spread its operations all over the world and serve various cultures and people with efficiency. References Bertho, M. Crawford, B., & Fogarty, E. A., (2008). The impact of globalisation on the United States: culture and society. US: Greenwood Publishing Group Chhabra, S. & Kumar, M., (2009). Integrating E-Business Models for Government Solutions: Citizen-Centric Service Oriented Methodologies and Processes. Idea Group Inc (IGI). Daggett, W. R., (2005). Globalisation — Tipping the Scale of Economic Supremacy. [Online] Available at: http://www.leadered.com/pdf/globalization.pdf [Accessed 10 January, 2012]. Elortondo, L. van Blokland, P. J., & White, J. K., (2005). Globalisation, Agriculture and the USA. [Online] Available at: http://irrec.ifas.ufl.edu/files/student_work/05_5_%20Elortondo.pdf [Accessed 10 January, 2012]. Garelli, S., (2006). USA Still Most Competitive Nation, But Losing Ground. [Online] Available at: http://www.imd.org/research/challenges/TC009-06.cfm [Accessed 10 January, 2012]. Microsoft, (2012). Company Information. 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