Globalization and Blue Ocean Strategy - Coursework Example

Critical Issues in Business Part One By: Course: Table of Contents Critical Issues in Business 1 Table of Contents 2 Critical Issues in Business 3 Introduction 3 Globalization 3 Key challenges facing organization in globalization 4 1. Communication and technology 4 2. Exchange rate movements 4 3. Availability of skilled workers 5 4. Cultural difference 5 5. Political uncertainty 6 Blue oceans strategy 7 Challenges facing in Blue ocean strategy 8 Fig 5: the six Principles of Blue Ocean Strategy 8 The role of leaders and managers in globalization and blue ocean strategy. 9 Conclusion 11 References 12 Critical Issues in Business Introduction Undoubtedly, the 21st century has led to the surfacing of novel market, one wherein all and sundry have to become accustomed to a hastily ever-changing society with persistently changing opportunities as well as demands. In essence, the economy has turn out to be universal and is steered by novelties as well as technology, plus organizations must change themselves to serve fresh consumer prospects. Modern’s economy presents challenging opportunities as well as dramatic uncertainty, but importantly, the novel economy has turn out to be performance driven and knowledge based. Furthermore, the theme in the current environment acknowledges involvement, empowerment, self-management as well as teamwork. In view of the mentioned challenges an empowered type of leader is required to guide the organisation through instability, which mostly is performed by managers. In this regard, the study seeks to offer an insight pertaining to two factors globalization and blue ocean strategy and also discusses the challenges that modern organization faces as well as the role of the leaders and managers. Globalization Globalization can be defined as a vastly multifaceted and contentious concept given that it is not a novel phenomenon, but instead is the developments continuations that have been taking place for some significant time. Lately, the globalization trend of fiscal activities is qualitatively distinct, but the world has absolutely stopped to be a collection of comparatively independent fiscal agents that are just marginally related and are relatively resistant to activities in their environs (Mark 2000). Fig 1: Impact of Globalization Key challenges facing organization in globalization 1. Communication and technology Modern companies make use of novel technologies such as e-commerce, media, social networks, media, cell phone, and so forth to prevail over the physical constraint, function in universal economy and so on (Karush and Sami 2013) 2. Exchange rate movements International business must have an extremely intelligence of how the local currency is influenced by other global currencies, and consecutively, how this will impact the exports, imports, suppliers, and customers (IMF, 2005) Fig 2: The impact Of Currency Movements 3. Availability of skilled workers Basically, highly skilled workers are a fundamental input to a pioneering economy, and notably highly skilled labors have recently turn out to be more mobile globally. In addition, towering demand for skills in developed countries has resulted in extreme competition at the international level, especially for these mobile workers (Steger, 2003). 4. Cultural difference According to Mrak (2000) cultural differences at all times bring about comical confusions, but can as well have a severe effect on the business. However, it is possible to change this setback as an opportunity through joint ventures as well as strategic alliance. Fig 3: Cross-Cultural Communication 5. Political uncertainty Political uncertainty or risk is defined by McKellar (2010) as a possible harm to a business operation stemming from political activities .in this regard; a company must assess every political factor when examining the country’s political risk level. Furthermore, companies should take into account the wellbeing of both their people as well as their products in unstable political state of affairs. Fig 4: Political Instability Blue oceans strategy Blue oceans, quite the opposite, represent all the industries that do not exist at the moment, the anonymous marketplace, unstained by competition. In blue oceans, Kim and Mauborgne (2005) affirm that the demand is generated instead of fighting for it, and there is plenty opportunities for development both lucratively and hastily. In Blue oceans theory, competition is extraneous given that the rules of the game are still to be set. Challenges facing in Blue ocean strategy Fig 5: the six Principles of Blue Ocean Strategy Basically, blue ocean strategy concerns reduction of risk and is not about taking the risk, but obviously there is nothing like riskless strategy since any will at all times involve risk. Even so, when it is about venturing past the red ocean to generate and take into custody blue oceans there are six main risks that companies must face: search, planning, scope, business model, organizational, and management. In this regard, the first four risks rotate around formulation of strategy, and the last two around execution of the strategy (Karush & Samii, 2013). The first formulation principle is concerned with reconstructing market boundaries: basically, this principle deals with the search risk of how to productively recognize any existing commercially convincing blue ocean opportunities. The second formulation principle is about focusing on the big picture, and not the numbers: it particularly embarks upon how to alleviate the planning risk of venturing hordes of effort and time but delivering just strategic red ocean moves. The third formulation principle is about reaching beyond existing demand, and it deals with the scope of risk collecting the utmost demand for a novel contribution. The final formulation principle which concerns how to get the strategic sequence right and it tackles how to generate a healthy business model to make sure that the business makes a hale and hearty profit on its blue ocean initiative, in that way mitigating business model risk. The first execution principle is about overcoming key organizational hurdles, and it deals with how to overturn organizational obstacles in executing a blue ocean strategy handling the organizational risk. The final execution principle is about building execution into strategy, and it deals with how to motivate individuals to execute blue ocean strategy to their unsurpassed abilities; thus, triumphing over management risk. For this reason, as much as blue ocean strategy concerns opportunities maximization, then it as well concerns risk minimization, and that is the reason why blue ocean strategy speaks the executives’ language ((Kim & Mauborgn, 2005; Jaya, 2012). The role of leaders and managers in globalization and blue ocean strategy. Undoubtedly, leaders’ play a crucial role in the organization; given that they are tasked to ensure that their organisation can successfully create and put into practice strategies. Essentially, leader’s strategic resolution affects how the organization goals will be realized; hence, a vital part of organizational achievement is having a leader’s with higher management skills (Kim & Mauborgn, 2005). Time and again, managers make use of their prudence when making strategic resolutions, which entails those mandated with efficiently implementing strategies. Importantly, managerial prudence varies considerably across industries, and the key factors that establish the level of decision making discretion seized by leaders are; first, the external environment sources like the market growth rate in the organization’s main industry, industry structure, competition, legal and political setting and the level to which artifacts can be distinguished. Secondly, the organization attributes, which entails culture, resources, age, and age (Jha, 2012). Finally, the manager’s attributes, which includes dedication to the company and its premeditated results, broadmindedness of uncertainty, abilities in working with various individuals as well as levels of aspiration. All said and done, strategic leader’s decisions are projected to assist the company achieve a competitive advantage, how managers put into effect prudence when establishing suitable strategic actions vital to the organization achievement. Fig 6: Managerial Discretion Other than establishing novel strategic initiatives, high-level leaders or managers develop the company’s reward system as well as organizational structure, which have an immense impact on a company’s culture principles. Consequently, managers at top level have a significant impact on organizational functionality and activities (Jha, 2012). Owing to the challenges most leaders face, they normally are more efficient when they work at the high-organization management team. Furthermore, leaders must have self-confidence that there is an efficient procedure for generating commercially persuasive blue oceans. Still, when a great percentage of individuals think about inventiveness or novelty, they are likely to feel endangered given that all these need risk-taking. Importantly, what blue ocean strategy embarks to do was to reduce the risk in the process of generating fresh markets, in what Thornton (2012) call “blue oceans.” Thus, executives can conscientiously participate in these undertakings to maximize on the opportunities and minimize the risk maximizing. Conclusion In conclusion, management is extremely intricate, and it requires skills as well as motivation, but most importantly it needs commitment. Notably, commitment is needed to respond to these challenges in both blue oceans strategy and globalization. This perspective draw attention to how imperative it is for managers and leaders to be familiar with and make stronger the rudiments of competitiveness and how to deal with the condition or make use of it as chance for fiscal recuperation and development. In a nutshell, this report has fulfill its intention in supporting policymakers, business executives, and academics and the public in general in recognizing areas of interest that may be dealt with in collaborative approach. References Andertonl, R., Brenton, P. & Whalley, J., 2012. Globalisation and the Labour Market: Trade, Technology and Less Skilled Workers in Europe and the United States. London: Taylor & Francis Group. IMF, I. M. F., 2005. International Monetary Fund publications catalog 2004-2005. Washington: International Monetary Fund. Jha, J., 2012. Summary of Blue Ocean Strategy By W. Chan Kim & Renee Mauborgne. s.l.:Summary Town. Karush, G. & Samii, M., 2013. International Business and Information Technology: Interaction and Transformation in the Global Econom. New York: Routledge. Kim, W. C. & Mauborgn, R., 2005. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Havard: Harvard Business School Press. McKellar, R., 2010. A Short Guide to Political Risk: Short guides to business risk. London: Gower Publishing, Ltd. Mrak, M., 2000. Globalization: trends, challenges and opportunitess for countries in transition, Vienna: UNIDO. Smith, N. C., 2010. Global Challenges in Responsible Business:. Cambridge: Cambridge University Press. Steger, M. B., 2003. Globalization: A Very Short Introduction. 86 ed. London: Oxford University Press, UK. Thornton, Z. C., 2012. Leadership and Communication Technology. In: M. Hitt, R. D. Ireland & R. Hoskisson, eds. Michael Hitt, R. Duane Ireland, Robert Hoskisson. 8th ed. New York: Cengage Learning, pp. 354-355. Read More