International Dimensions of Business and Globalization - Research Paper Example

In his management challenges for the 21st century, Peter Drucker cautions all institutions to have to make global competitiveness a strategic goal. No institution, whether a business a university, or a hospital can hope to survive, let alone to succeed unless it measures up to the standards set by the leaders in its field, any place in the world (Drucker, 1999).

Globalization is an attitude of mind it is a mindset that views the entire world as a single market so that the corporate strategy is based on the dynamics of the global business environment. International marketing or business does not amount to globalization unless it is the result of such a global orientation. Companies that have adopted a global outlook stop “thinking of themselves as national marketers who venture abroad and start thinking of themselves as global marketers. The top management and staff are involved in the planning of worldwide manufacturing facilities, marketing policies, financial flows, and logistics systems. Management is recruited from many countries components and supplies are purchased where they can be obtained at the least cost and investments are made where the anticipated returns are the greatest” (Kotler, 2003).

Now it has been evident that International dimensions of business and the globalization of business have a significant impact on organizations even on the ones which are within national boundaries. Globalization has an enormous impact on the business scene as a whole. The speed of interdependence and unprecedented technological change particularly in the field of transportation and communication are the few factors that have an impact on business organizations. One such industry is the computer industry which has felt the global impact.

The computer industry illustrates how value keeps migrating within an industry. In the industry’s early years, vertical integration was the order of the day. The first computing company to successfully implement the integrated business was IBM. Thomas Watson, Sr. who had taken his company to a dominant position in tabulating was not attracted to computing. But Thomas Watson Jr. saw it as the only move the company could make. In 1952, IBM was a total newcomer to the computer industry. By 1959, it was the dominant player, with a market share of more than 70% in mainframe computers. Later on, the problems IBM faced in the late 1980s leading to the ouster of CEO John Alers, are well known IBM’s vertically integrated proprietor business in the era of globalization and open standards. Focused players like Dell, Compaq, Microsoft, and Intel moved ahead. Technologies are changing fast and customer preferences have changed a lot. Global competition, fast-changing technology, and the requirement for personnel computers have changed the market scenario globally. As IBM headed for a crisis, As the IT industry went through a fundamental transformation in the mid-1980s a new breed of successful IT companies emerged. These companies specialized in small segments of the value chain. Some sold only databases, a few offered operating systems, and some only had storage devices. The industry was transformed from a handful of competitors to thousands and tens of thousands of specialized players. It was in this new environment that IBM faltered. Lou Gerstner, the CEO’s arrival in 1993 staged a comeback for IBM. Today big blue is back in the reckoning, while staying this comeback IBM has no doubt taken full advantage of its size, resources, and competencies but it has also revamped its business model. IBM has transformed itself into a huge software developer, next only to Microsoft, given a new thrust to its consulting activities, started competing with firms like Anderson( now Accenture), and decided to take up outsourcing jobs in the manner of EDS. Gerstner realized that fixing IBM was less about planning and more about execution. In the past, IBM had never missed predicting correctly major technological trends in the industry. IBM was still developing most of the new technology. But IBM had never acted promptly on any prediction. Gerstner believed that customers did not like to integrate different pieces from many suppliers and prefer integrated solutions. The historic preoccupation with chip speeds, software versions, and proprietary systems would wane. Overtime the IT industry would be driven by services, not by technology IBM also bet on the emergence of a networked model of computing that would replace the PC- dominated world of the early 1990’s keeping all this in mind and the need of the global customers, earlier practices have to be changed to survive in the competitive markets.