Honest Communication And Regulation Of Global Business - Essay Example

? HONEST COMMUNICATION AND REGULATION OF GLOBAL BUSINESS By Contents Honest Communication by Global Business 3 Regulation of Global Businesses 10 Honest Communication by Global Business Introduction Communication and regulation are the twin factors that determine the performance of companies in a global business environment. Communication entails various engagements that link the objectives of the company to the needs of the global clientele, the interests of the stakeholders and other parties that have some forms of relationships with the company’s core business. By its very nature, communication within a global context involves a vast range of activities, which must add up to determine the success levels or nature of challenges to be encountered in the course of doing business (Adekola & Sergi, 2007). Communication entails a thorough knowledge of the competitors, the interests of the clientele, cultural dynamics, market forces and other issues that relate to the efficiency of the business. Communication promotes the adoption of flexible strategies that are responsive to the unique situations and realities to be encountered at the market place. It involves an awareness of the macro-economic and micro-economic factors that impact on the core objectives of the business. The success levels of communication are influenced by the ability of the company to make accurate assessments and predictions of conditions on the global market. Wrong assumptions can lead to the development of poor strategies, which could cause major losses in profits and stability of the company. It is important for global companies to seek for sufficient insights and resourceful information about the markets in order for them to manipulate the complex and diverse connections of the factors that determine the success levels of global businesses. Discussion Comparative surveys on the efficacy of the art of communication within the global market environment reveal varying shades of success and failure by different companies. Walmart has had varying levels of success due to its various communication strategies. For instance the strategies applied in Mexico proved to be successful than in other places where it has spread its commercial interests (Adekola & Sergi, 2007). Some of the reasons attributed to the success of Walmart in Mexico include awareness an awareness of the shopping culture of the country. Generally, Mexicans have a peculiar shopping culture that small packages and fresh products. On the other hand, regulation of global business basically involves the development of the most appropriate strategies that are consistent with the goals and objectives of the global companies. The art and science of regulating a global business is complex in the sense that it involves a balance between the internal objectives of the company and the unpredictable operating environment of global commerce. Regulation must necessarily involve the awareness of the variations in the nature of controls, restrictions, policy matters, legal restrictions, and other variables that apply within a global context. Some landmark cases of failure of renowned companies on the global market have been associated with limitations in the judgment of the management with regard to the most appropriate approaches. Inward looking strategies often incur challenges of cultural mismatch as the strategies fail to apply appropriately to particular situations. On the other hand, some of the notable successes on the global markets have been related to the ability of the companies to develop strategies that are responsive to the unique and varying demands of the markets. Markets do not bear similar characteristics. The preferences and trends on the western markets may exhibit significant variations with those in Asia. Cultural factors and other aspects of social realities determine these differences. By implication the marketing strategies and the nature of products designed for the western markets may have to be redesigned in order to meet the tastes of the Asian markets. These are some of the challenges that define the problematic nature of regulation. Generally, it is difficult to apply the strategies of communication on a global business environment that is controlled by a vast network of unregulated and regulated business processes. The effectiveness of communication might be seen from the perspective of the global companies that have based their operations in different business climates. For instance companies operating in places that have strict regulations must engage the art of proper communication in order not to succumb to operational challenges that may destruct their stability. The art of communication entails a deeper understanding of the clients’ needs in order for the companies to succeed in aligning their products to these needs. On this score, it might be argued that communication is more effective than regulation. Naturally, the essence of communication involves an awareness of some of the factors that affect the business but which, may fall outside the boundaries of commerce. It has often been argued that forces that are deeper than general commerce generally regulate communication. For example, geopolitical realities may determine the nature to which companies conduct their business. Global businesses must learn how to engage with discourses that affect general humanity in order not to incur some of the challenges from activists or other forces that are affected by these forces. On this score, communication becomes a complicated process that involves a vast range of concerns and processes. Today organizations are operating in a more complex environment and the need for effective and proper communication has become vital in securing success in the global workplace. Effective communication forms an integral part in the organization and especially when changes are to take place. In practice, the concept of honest communication refers to acting with integrity and communicating the truth (DeCarlo, 2010; Stephenson, 2004). In the global changing environment, organizations need to maintain with the international standards. When an organization conducts business on international grounds, it is expected to maintain honest and open communication. Communication is one of the most important components while dealing with international business. The level of importance that is attached with it cannot be overemphasized. Managers tend to communicate in a different ways and at different levels (Adekola & Sergi, 2007, p. 175). Diversity in workplace on global basis represents both challenges as well as opportunity for organizations (Parker, Wayne & Kent, 2009). In the process of delivering these opportunities the organizations should rise to the challenge of serving as top global leaders. Global leaders should be able to communicate clearly the vision of the company to others. In addition, the global leaders should also have the skills through which they can translate the vision into practice. Successful business often depends on globalization. Effective globalization relies on the diverse workforce and effective communication. Therefore, to communicate in an effective manner, global organizations should learn the fundamental concept as well as skills of intercultural communication (Toomey, 1999, p. 4). The culture of the organization reflects the values of the company, which guides the actions of the organizations. Intel’s honest discussion as well as open and healthy debate was key factors, which accounted for the success of the company. The directive, which said to communicate honestly and straightforwardly and confront conflicts, which was presented in the orientation of new employees also published them in “value posters”, list on the employee handbook, and also in the ID card of the employees. This way the management expected employees to live up to the policy in Intel. Intel had also modelled the values with respect to the behaviors of the employees. Intel did not believe in layoffs and it can be seen that since its inception, the management held the values as official values and much more essential and important. As a result, the employees were loyal towards the organization. For any organization, communication is important and to establish the values of organizational culture, the leaders should clarify the values and then declare their beliefs in those values. This is challenging especially when organization claims honest and open communication as the key values. Thus for honest and open communication, the employees should trust and have confidence that the environment are safe enough for them to express leading to effective communication within the firms and further this practice will also lead to effective communication among the members of the firm even while dealing internationally (Johnson & Phillips, 2003, p. 31). Corporate social responsibility forms an integral part for companies dealing both domestically and international and an important aspect in the CSR activities is to communicate honestly with all those members from the employees to the stakeholders of the organization who forms an important part in the activities of the organization. Another example of an organization, which acts with honesty and integrity and today it, has become the top most company in the hospitality sector globally. Marriott is known for its hospitality and also for its CSR activities. Marriott believes in honesty and integrity and applies it with all of its communication. Marriott maintains accurate books as well as reports which helps in transactions on international grounds especially during expansion of the organization. It responds truthfully to the auditors, ensures that expenses with respect to travel and entertainment are well supported by actual receipts and other financial matters. Apart from its own information, Marriott also pays attention towards the accuracy of information, which is submitted by others with whom the company interacts such as the owners of the firm, the franchisees, joint ventures, contractors, the customers, vendors, and other associates. In addition, Marriott deals fairly with its customers. Marriott being the leading hospitality company is expected to provide exceptional customer service along with respect and honesty. Customers are given what is promise to them and at the same rate promised by the company. A false claim about the hotel, perception of dishonesty can easily jeopardize the satisfaction and loyalty of its customers towards the hotel. Marriott while communicating with its customers maintains truth while representing the quality and nature of Marriott’s product, price, services and other information. Marriott do not mislead its customers. In the global environment, competition also seems to be at its peak and organizations to gain a competitive advantage are ready to make unlawful agreements. However, in Marriott, it is true that competition along with antitrust laws tends to affect almost all the aspect while doing business globally, which are prone to US, European Union antitrust laws or any other country where Marriott does business. The policy of the hotel is to comply with all the regulations and laws while conducting business globally. Competition laws are thus designed in order to keep the business out from anticompetitive practices, which affect the pricing strategy. Marriott tends to compete on the merit of its product and services and do not makes a false claim or remarks, which might interfere with the business relationship. It rather provides useful information, which concerns the competitors in a way, which is lawful, consistent, and fair as per the policies of Marriott. At the same time, Marriott practices ethical standard of conducting business to gain a competitive advantage and meet its objectives (Marriott, 2011, p. 7-14). Another company, which conducts business with honesty is Coca Cola. In the competitive world, CSR is seen as one of the important marketing weapon as consumer demands not just affordability but more than affordability and reliability from the products consumed by the consumers. Being honest about the efforts of the company is one of the best ways to avoid accusation and Coca Cola has set an example of honesty by releasing the data on carbon footprint of its product line (Somar, 2009). Therefore, it can be said that corporate social responsibility along with ethical practice are regarded as the most important elements in organizations since they contribute to the aspect of competitive advantage. Ethical practice involves honest communication with all the members of the organization including the employees and shareholders. Communication forms an important aspect while engaging in the different forms of global business. Regulation of Global Businesses Global business refers to firms which originates in a specific territory and spread to other territory for future scopes and better options. The globalization of regulation usually involves the spread of few regulatory norms. In globalization of business regulations, international corporations are one of the fields that are of high importance. It is important to understand the connection between globalization; regulations of firms are highly contingent. If a particular market segment is not globalised or the firm does not fall under global firms, it does not mean that the regulations are also not global. Globalization of business regulation can be said to be the standard, norm, principles, and rules, which tends to governs commerce and globalization of enforcement (Braithwaite & Drahos, 2000, p. 10). An important lesson from the recent economic conditions and business scandals is that transparent, responsible, and ethical leadership is required or companies to maintain and develop a long term commitment towards corporate responsibility in order to benefit the stakeholders. This is highly applicable to the multinational corporations because of the huge power and influences the business as well as the executive representatives. Multinationals operates in various environment where the laws, rules, expectations are much more divergent. The failure of global legal as well as regulatory schemes has resulted in child labour, environmental disaster, frauds in financial sectors, and other problems. For example, Mattel had paid $12milion in the settlement of 39 US states for shipping toys that were unsafe as they contained high proportion of lead. At the same time, there are examples of globalization of regulation, which do not benefit the customers. India is one such country, which did not allow patents on the pharmaceutical products, which enabled the production of cheap medicines resulting in price increment. In addition, managing and developing information system is more complex and challenging in international business environment. A business operating globally should cope up with different languages as the culture is likely to be different from that of its own. Countries in which the business operates might have different forms of government and business regulations. International are usually scattered and must function according to the regulations of those countries (Dlabay, Scott & Scott, 2010, p.364). The regulation of global transactions occurs through diverse, dispersed, and also incomplete system of government regulation both at national and international level. In addition, the various institutions at international level take different forms and develop different regulatory products and thus setting regulation of global business would allow the organization to do business in a much more transparent world. The need for regulation in global business is the necessarily for regulating the behaviours of TNCs which has grown within the scope of economic globalization. The global economy is organized in international networks and value chains are largely out of control. In contrast, the economic order is currently is organized around the transnational capital with respect to management, ownership, exchange and stakeholders. Correspondingly, the TNCs have emerged as powerful actor in globalization. Statistics on FDI are good indicators to highlight the economic activities undertaken by TNCs and secondly the substantial increase of the TNCs, which have risen from merely 7000 in 1970 to about 40,000 n 1995. In recent years, the numbers have increased even more. TNCs have lately also influenced the word politics and is not just reflected in abstract but on practical level. Companies consumes a huge amount of resources like energy, water, raw materials and at the same time produce huge amount of waste. Therefore, TNC can be considered the central player in determining the economic policies and in the transformation of social and ecologic structures. The regulatory globalization is thus connected with the globalization of markets and firms. To conclude, the global business regulation acts as central phenomena in the world politics that depends on the perspective that one tends to adopts towards state market relation and with the social forces (Pattberg, 2006, p. 4-5). Economies with friendly business regulation include Singapore, SAR, Hong Kong, China, USA, New Zealand, Denmark, Norway, and others (Pattberg, 2006, p. 4-5). The ranking of the economies do not just follow the ease of doing business but also include other important elements, which matters to the firm. The top economies have implemented effective procedures with respect to regulatory processes like construction permits for business and strong legal protection towards property rights. Policy makers in some of the economies, considers regulatory reform as a continual process and in return create dedicated agencies or communities like Actal in Netherlands. These communities/agencies not only assess the existing regulations but also pay attentions in managing the flow of new regulation (The World Bank, 2012, p. 4). Therefore, it can be said that honest communication in global business is vital for any organization to perform and succeed as per the rules and regulation of the international market. This however relates with regulation of global business. In the new era of globalization, it becomes increasingly important for countries to practice regulations for global business so that they are not affected by competing rules and regulations. In the past three decades, the theories as well as practice of global business regulations were imposed on the behaviours of the economic actors containing rules as well as standards. However, in contrast there are varying management standards, codes of conduct, reporting guidelines, certification schemes, eco labels and other norms that affect operations at the global level. Regulations are usually targeted towards the transnational corporations TNCs but also play a major role in influencing the smaller enterprises. The merits of honest communication might be seen from the perspective of enabling the mechanics of the system to adjust appropriately to the set objectives. It requires the application of different processes in order to achieve the favourable conditions that enhance global business. On this score honest communication is effective in the general operation of the business. On the other hand, regulation enables a firm to achieve its objectives within specified conditions. Therefore, with better and effective regulatory environment, the developing economies will not face difficulties and will be able to operate successfully as the developed economies. Therefore, in the global context, both the aspect of communication by global business and regulation of global business are equally important and essential for organization. Both are effective and should be practiced in a manner that is complementary so that the other addresses the deficiencies of either of them effectively. Works Cited Adekola, A, & Sergi, B, S 2007, Global Business Management: A Cross-Cultural Perspective. Ashgate Publishing, Ltd, London. Braithwaite, J, & Drahos, P 2000, Global Business Regulation, Cambridge University Press, Cambridge. 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