The Current State of Globalization - Assignment Example

Business Assignment The Current of Globalization The process that makes the world more connected and integrated today through use of technology and efficient communication capabilities is globalization. Addressing the state of globalization today therefore calls for analysis of the whole world connections economically, politically and even socially. Globalization has given many people the ability to refer to refer to the world as flat, meaning there is efficient across the border collaboration and operation of businesses. The collaboration and operation take place without geographical location or distance hindrance. Consequently, many benefits result relating to new opportunities and increased access by people to international trade in the emerging markets. Recent country-by-country study analysis of globalization reveals many surprises and interesting bits. The study shows that there are high possibilities of continued integration of economies world over as well as more than five percent increase in gross domestic products. In addition, there is enormous room for world connectedness to expand which will be of various benefits in the international business. However, the advancement of globalization is not yet as high as many people perceive it to be (Evanoff et al., 2009, p. 34). The reason making globalization to lag behind the expectation is the fact that there was financial crisis in the year 2008 that saw trade unions go back to a more conditional, nationalist and interventionist model. The crisis saw the steady growth of world GDP since 1986 went flat since 2008 and subsequent years have only neared a third of top $11 trillion in 2007. Consequently, recent years have also seen rise in trade barriers unlike initially when capital, goods and people moved more freely across borders of nations. Since the crisis, there is careful management of people taking place between countries. Most governments choose and pick trade partners as well the capital and freedom they would allow for abroad businesses. The good news about globalization is that almost all states globally embrace the international trade principles together with investments (The Hofstede Centre 2009, p. 1). Every country aspires to enjoy the unmatched benefits of globalization. As countries tap the benefits, they remain careful not to face the downsides that include surging imports that may cause collapse of domestic industries and capital flows that are versatile. Furthermore, many countries have left open their borders for immigrants though under more tightened admission criteria. Nevertheless, in countries where there is scarce skilled labor, borders are open to attract such skilled labor and other entrepreneurs. Aim of the Report on Windmill Apps The aim of the windmill application was to help in grinding corn and removing excess water from the districts found on deep lowlands. In addition, windmills played a big role in sawing timber in an attempt to make the country fit for inhabitation by humans and adding areas deemed habitable (Molen, 1). Netherlands has very many windmills located in one small area contrary to other European nations, which have just a few scattered windmills that may not be significant. Current Macro-Level Facts about Netherlands Netherland’s economy is the 14th most liberal in the world with freedom score of 74.2. it has seen significant improvements in the control of government spending, fiscal freedom, investment and trade freedom. However, the country is facing partial offset in the monetary and financial freedom declines. The rating as one of the freest countries began all the way from the year 2000. Netherlands enjoy great benefits in the regulatory efficiency because it is open to global commerce, which consequently facilitates most of its entrepreneurial activities (Mabs, 2009, p. 141). Netherlands also celebrates an efficient judicial system that provides thorough protection to property rights of its citizens. However, the citizens of the country feel huge burden when it comes to tax remittance. The heavy taxation regime is a consequence of huge public expenditure. Income rate is as high as 52 percent besides corporate tax that goes up to 25 percent. Value added tax and others such as environmental taxes are also obligations of the Dutch economy. Another good thing that the Dutch government is boasting of today is that it has a transparent framework for entrepreneurial activities. If an individual or organization is intending to start a business, procedures are never complicated because it takes only up to four days to register it. The government maintains monetary stability and low cost of non-salary employment compared to other regional economies (Bhattacharyya, 2009, p. 129). All the positive aspects of the Dutch macro levels are because of the county’s transparent entrepreneurial framework. Nevertheless, the labor market of Netherlands lacks flexibility and licensing of a business takes quiet a long time process and time. Off shoring the governments wind power project saw cutting down subsidies to local companies. Netherlands is a member of European Union. Consequently, its tariff rates are as low as 1.1 percent as per the union requirement and non-barriers trade are few. The Dutch law gives equal treatment to all foreign investor as domestic investors. The financial sector has seen mass restructuring since 2009 and today remains one of the most well structured financial structures in the world. Banking ownership and capital injections and guarantees remain involvements of the government. Further, the Dutch national income has witnessed significant rising trend between 1995 and 2005 with inflation kept at slightly low rates of 2.5 percent per annum. Households currently remain top generators of national income at over 72 percent. From this income, households are capable of paying taxes and social security contributions. In return, the same households receive pension and social security benefits. Disposable income, which currently account for more than 50 percent of national income is a product of pension and social security benefits transfers. Based on Hofstedes work, Netherlands and Indonesia show some similarities and a number of differences. Masculinity Masculinity is an aspect that indicates the driving factors of a society to be competition, success and achievements. It also outlines that success achievements is a process that begins in school and proceed to fully throughout the behavior of an organization. When a country reveals a low score on masculinity dimension, it shows that caring for others and life quality remains a priority as dominant values. In a feminine society, quality of life takes a central part while in a masculine case, those who stand out from the crowd find great admiration. In Indonesia, the masculinity score stands at 46, this is an indication of low masculinity while Netherlands shows the contrary. Netherlands have a score of 14, which is an indication of a feminine society. However, the case of Indonesia does not show total feminity because the country considers visible success symbols as important. Netherlands keep a proper balance between life and work. The Dutch utilizes compromise and negotiation to resolve conflicts whenever they arise. Managers achieve agreements mainly through consensus and there is great value attached to equality, working life quality and solidarity. In Indonesia, there is favor for flexibility and free time that the society treats as an incentive. The country however does not necessarily need material gain to be motivated. They instead attach great value to the position that a person holds following the Indonesian concept called “gengsi” which refers to the outward appearance. Contrary to Netherlands, there is not much focus on well being. Individualism This dimension mainly addresses the extent to which the society keeps interdependence amongst each of its members. It explores whether the society looks at itself entirely and collectively or as individuals, for instance, “I” or ”We”. Netherlands boasts of individualistic society with a high score of up to 80. The high score shows in most cases, members of the society are supposed to take care of themselves as well as those of close families. Such individualistic society easily loses self-esteem whenever they feel any form of guilt (Meyer, 2014, p. 102). Only merits and mutual benefits dictate employer employee contracts, promotion decisions, hiring. However, in Indonesia, the individualism score is as low as only 14 meaning it is a collectivist society. Each individual shows high conformity with societal ideals in a strong social framework. In addition, an individual must at least belong to a group such as a family. There is good and committed relationship existing between parents and children. Power Distance Power distance appreciates the fact that people of a society can never be equal and attitudes that people hold towards such inequalities. It outlines the extent to which the societal less powerful members in a country accept and expect unequal power distribution. Netherlands scores low of 38 in power distance scale. The low score exist because of their independence, equality in application of law and decentralization of power within the country. Just like the managers, employees too expect consultation from the top of hierarchy. Managers receive informal attitude and employees do not like control and supervision. However, in Indonesia, management has the power to delegate and control employees. Consequently, employees understand that management should direct them on what to do where and when. Indonesia scores higher in the dimension at up to 78 meaning they highly depend on hierarchy, leaders directive and unequal rights between the power holders and less powerful. Critique of Hofstedes Work (i) Cultural homogeneity Hofstedes study makes more assumptions that domestic population is entirely homogenous. However, the truth is that most countries have various groups of ethnic units. Therefore, analysis remains based on character of the individual under assessment meaning possible outcomes have chances of arbitrariness. Hofstedes work also ignores so many details about importance and variations of community influences. (ii) Political influence During Hofstedes research period, Europe was marked with cold war and still lingered in the negative memories of World War II. Similarly, their communist insurgence of Asia and Africa also had the same torturous memories. Consequently, the sample had inadequate data from the socialist states. The affluent third world also did not have their data factored into the research. (iii) Out-Dated The study is today too old to factor in modern realities of the world particularly with the fast changing global environment. Factors such as internationalism and convergence are also lacking in the study. (iv) Too Few Dimensions It is evident that information covering cultural diversities cannot be sufficient through only five dimensions as Hofstedes did in his study. The original work therefore needs to incorporate more dimensions to make if more efficient and effective. Decision Making Hofstedes clearly uses various dimensions to show the challenges that managements face in achieving control, delegation, authority and power (Laura et al., 2013, p 44). In certain nations such as Netherlands where the law deem everyone to have equal rights before the law, controlling employees becomes difficult if not impossible. In fact, employees generally dislike control from the management. Instead, employees also expect that management should always consult them. In any situation where management do not have authority and control over its employees, supervision and delegation becomes difficult rendering co-ordination function of management ineffective. However, in other countries such as Indonesia, Hofstede found in his research that those who do not possess more power in the society are more submissive. Moreover, such persons always wait for direction from top management and believe that they should receive effective control form the perceived more powerful individual. Nonetheless, the submission by the less powerful is not good and healthy to the management still. Management remains the sole decision maker without much consultation, making some of the actions by the management to be unfair and uniformed. In other words, management fails to enjoy and capitalize in the diversities within their organizations. Further, management in order to work and achieve any set objective must always closely supervise workforce. Workers lack the initiative skills and flexibility because they are more dependent on direction from those they perceive to be powerful in the society. Dependency starts from the junior most citizens all the way to the top leadership of the country. Consequently, management is likely to fail terribly in circumstances where there is no co-ordinated supervision Negotiation & Communication In societies where individuals believe in negotiation and communication to resolve conflicts, management does not find many challenges. However, in such environments like that of Netherlands where both workers and management hold equal rights and same workers do not like control, management find an uphill task to resolve conflicts whenever any of them arises. Leadership & Cultural Intelligence Masculinity and feminity are some of the factors that have huge influence in cultural intelligence and leadership. Different societies have different ways of coping with one another because of the sex’s duality. Masculinity is an attribute that shows presence of distinction in gender roles. In most societies like in the case of Indonesia, men hold the position of being assertive, tough and have their focus more on material success (Livermore, 2011, p.24). Women, on the contrary, should be modest, showing more concern on life quality and tenderness. From the above roles, leadership is evidently dependent on cultural beliefs. In a feminity society as in the case of the Dutch, sexes, men and women should be tender, modest and showing lots of concern for quality life. Management find challenges especially in situations of masculinity especially where the female gender has managerial roles. Men who work under her may not respond or treat her with respect because they perceive themselves as tough and focused on material success. Management face challenges of dealing with men in such societies because culture places male gender slightly higher than female gender. Supervisory roles and control therefore remain to be a permanent challenge in a masculine society with a woman charged with leadership position. Conclusion Mutual respect, healthy interdependency, cross cultural communication and effective leadership are some of the most appropriate ways through which a successful Global project management can become a reality. Without the implementation of the above factors such that that leadership lacks authority, power and control over employees, then the project’s destination is failure. Using cross-cultural teams effectively in projects provides a massive source of experience as well as innovative thinking that enhance innovation and competitiveness of their organizations. Managements should also make proper efforts to eliminate communication barriers that may hinder openness and transparency in the organization. Discriminatory cultures and principles should also not find a leeway into any organization. It is therefore important that managers should also give room for innovation, creativity and motivation by offering flexible leadership. Bibliography Bhattacharyya, D. K. (2009). Human resource planning. New Delhi, Excel Books. Higgins, M, & Klitgaard, T 2007, Financial Globalization and the U.S. Current Account Deficit, Current Issues In Economics & Finance, 13, 11, pp. 1-7, Business Source Complete, EBSCOhost, viewed 1 January 2015. Ilyin, I., Ursul, A., Kiss, E., Chumakov, A., Leonova, O., Weiming, T., Kirchslaeger, H., Kim, H. and Sheffield, J. (2014). Globalistics and Globalization Studies: Aspects & Dimensions of Global Views Globalistics and Globalization Studies. New York: Uchitel Publishing House. International Banking And Finance Conference, Evanoff, D. D., Hoelscher, D. S., & Kaufman, G. G. (2009). Globalization and systemic risk. Singapore, World Scientific. http://public.eblib.com/choice/publicfullrecord.aspx?p=477142. Laura M. Milner, Dale Fodness, and Mark W. Speece (2013) ,"Hofstedes Research on Cross-Cultural Work-Related Values: Implications For Consumer Behavior", in E - European Advances in Consumer Research Volume 1, eds. W. Fred Van Raaij and Gary J. Bamossy, Provo, UT : Association for Consumer Research, Pages: 70-76. Livermore, D. A. (2011). The cultural intelligence difference: master the one skill you cant do without in todays global economy. New York, AMACOM, American Management Association. Mabs, David, N., & Sichman, J. S. (2009). Multi-agent-based simulation IX: international workshop, MABS 2008, Estoril, Portugal, May 12-13, 2008 ; revised selected papers. Berlin, Springer. Max Corden, W 2009, Chinas Exchange Rate Policy, Its Current Account Surplus and the Global Imbalances, Economic Journal, 119, 541, pp. F430-F441, Business Source Complete, EBSCOhost, viewed 1 January 2015. Meyer, E. (2014). The Culture Map Breaking Through the Invisible Boundaries of Global Business. New York, PublicAffairs. http://public.eblib.com/choice/publicfullrecord.aspx?p=1634787. Molen, Hollandsche. The dutch windmill. Amsterdam, 2008. Retrieved on January 1, 2015 from http://www.texva.com/holland/The%20Dutch%20Windmill.htm Mwangi, S, Yamashita, T, Ewen, H, Manning, L, & Kunkel, S 2012, Globalization of Gerontology Education: Current Practices and Perceptions for Graduate Gerontology Education in the United States, Gerontology & Geriatrics Education, 33, 2, pp. 198-217, Academic Search Premier, EBSCOhost, viewed 1 January 2015. Steinglass, M. Netherlands to review tax treaties with least developed countries. Amsterdam: Financial Times, September 6, 2013. Retrieved on January 1, 2015 from http://www.ft.com/intl/cms/s/0/1560d626-16bf-11e3-bced-00144feabdc0.html#axzz3NXSAYRO4 The Hofstede Centre (2009) What About The Indonesia?: indonesia. Jakata. Retrieved on January 1, 2015 from http://geert-hofstede.com/netherlands.html The Hofstede Centre (2009) what about the Netherlands?: Netherlands. Amsterdam. Retrieved on January 1, 2015 from http://geert-hofstede.com/netherlands.html Venaik, S. & Brewer, P. (2009). Contradictions in national culture: Hofstede vs GLOBE Read More