The Impacts of Global Strategic Management - Term Paper Example

The Impact of Globalization on Strategic Management The Impact of Globalization on Strategic Management The process of development and execution of channels of competitive moves with the view of enhancing the success of a company in both present day and in the future defines strategic management. The channels that give rise to need for strategic management originate from both internal and external demands of the products produced by the firm. Globalization brings about a diverse environment for customer’s requirements and the divergent ways of customer satisfaction together with the customer cultural sensitivity. Since suppliers may not be relatively reliable in other areas where the producing firm is not available, there comes a time when globalization is the only option. Due to growth of both local and international markets, analysts sought to address and bring about strategic management and globalization of firms in view of attaining maximum customer satisfaction. Business Globalization Globalization of businesses is growing rapidly, leading to emergence of a new field of study called global strategic management. Whereas revolution of events over the past few years has a clear picture showing the impacts of global strategic management that includes the collapse of communism, the evolution of information, and Europe unification, the challenge of reaching the goals of complete realization of goals of global strategic management remains. Challenges remain due to slow adaptation of some business in different societies. However, as globalization of businesses stretches to different corners of the world, many companies with great strategic management are living witnesses of the many benefits globalization can bring. Due to strategic management, globalized countries have been able to encounter and integrate business in a different culture with different local problems as well values that erupt in a different part of the world (Ramamurti & Hashai, 2011). Managers have come together and sought the different series of moves to use in different environment in order to win maximum clientele participation in the promotion of the company’s products. Importance of Globalization Globalization has brought about new insights of emerging systems of strategic management in diverse parts of the globe. This is witnessing the creation of force that characterizes integration of markets across the globe. Global strategic management has led to dissemination of advanced technology that is unifying the globe despite fear and relentlessness of modern technology. The need to have a great mode of information technology across the globe is the driving force behind dissemination of technology that has brought the current global transition (Hitt, 2010). The world owes theses concerted efforts to managers who came with this great idea of diversifying business through information and technology. Due to globalization of strategic management, it is possible to diffuse information technology. As a result, a government is able to foster joint research and project development in other countries, corporations are able to sell sophisticated products in other nations, and individuals are able to exchange ideas and knowhow necessary for globalization (Hitt, 2010). With the help of strategic management, developed countries are uniting with the less developed nations across the globe to integrate or fuse technology towards modernization and advancements. Since technology requires strategized plans, globalization is making it possible for strategy managers to introduce technology in different and, subsequently, remote corners of the globe and making sure people use it accordingly. Globalization is acting as a foundation for construction of companies around the globe because of technology that is turning the world to a coherent business community (Ramamurti & Hashai, 2011). Therefore, globalization of technology is resulting in an enormous need for strategic management. Through globalization, strategic managers are now able to integrate economy and society. A few years ago, many companies were lingering around conflicts associated with economic and social life. Today, globalization of strategic management is reconciling the unthinkable by using breakthroughs (Delfmann, 2005). For instance, General Motors used to regard economic and social integration as something not only unthinkable but also unachievable. Nevertheless, its managers introduced a prototype called GM-Saturn that dealt with both social responses and economic interests spurring improved production, excellent customer relations, and satisfaction of customers globally. Because of this strategy, Saturn is now the most demanded type of cars in their line of production globally. Moreover, globalization of the process of developing and executing ideas in view of achieving success is painting a different picture of competition compared to several years ago (Hitt, 2010). Previously, business developers used to think of only the ground floor and local market only. However, after the emergence of globalization, competition is driving many business strategists to initiate and execute ideas that can transform corporations worldwide. Surprisingly, trading of commodities produced by a company in USA is taking place in African markets. Globalization of strategic management is the driving force behind cross border and overseas trade, as elaborated intense global competition is giving birth to strategic initiation and execution of plans that are competent enough to withstand the market pressure. The need to carry out business globally is helping the potential market countries attain a symbiotic-environment interface. The manufacturing country must create a harmonious environment that incorporates creation of economic-societal relationship in view of establishing a supportive viable ecosystem that guarantees active market for the manufactured goods. As a matter of course, new products require market awareness that encompasses civilization. During the process, the country with prospective market benefits from strategic management through creation of a conscious environment (Delfmann, 2005). Globalization of strategic management influences development of sustainable business sense by creating competitive advantage as well as realizing new opportunities. With the recent need for advanced and modest want for a wholesome lifestyle worldwide, globalization is creating the tendency of direct initiation and formulation of policies. Scholarly studies show that due to globalization of strategic management policies, many countries around the globe are decentralizing institutions in order to empower individuals irrespective of their location (Delfmann, 2005). In turn, decentralization is leading to creation of autonomous networks of small units that enable mastering of complexity. Because of decentralization of institutions, the people on the ground are able to benefit through direct interaction. The constituting of globalization, strategic management, and policymaking are the founding block for imperative emergence of entrepreneurial institutions worldwide (Ungson & Wong, 2008). Generally, globalization of strategic management in this sense is contributing to establishment of collaborative, harmonious and a democratic policy universe favorable for doing business. Impact of Globalization on Strategic Management Presence of globalization influenced strategic management a whole lot during the introduction of Internet. The need for strategic managers to venture into other parts of the market gave rise to globalization, which, in turn, revolutionized the Internet business dramatically. Internet strategic managers felt that there was a need for global market where people could reach one another by a touch of button and/or purchase goods far away at the comfort of their sitting room. The way people carried out businesses prior to globalization was adamant. Nonetheless, introduction of globalization transformed the world, as strategic planners introduced were able to conduct business through the Internet (Ramamurti & Hashai, 2011). In addition, impact of globalization on strategic management enables traders to minimize time and distance. This is because business people have the freedom to run home based businesses, be their own bosses and work remotely as well (Delfmann, 2005). Through globalization of strategic management, the global community uses Internet services that help businesspeople conduct virtual businesses online through eBay and Amazon. This cuts off travelling expenses and time too. It is due to globalization of strategic management that business strategists found the need to have a strategy that could do away with the expenses incurred while paying employees, rent and transport cost and eventually reduce time spent within the business’ premises or stores. Research findings note that globalization of strategic management leads to economic growth. For example, a research conducted in Nigeria reveals that most of the Nigerians believe that globalization of strategic management would bring benefits associated with transfer of goods and materials worldwide. This would, in turn, realize incorporation of business management practices leading to foreign direct investments, thus contributing to economic success (Hill & Jones, 2007). Strategists also maintain that globalization is assisting in integration and accommodation of other economic and political systems that are favorable for trading. Globalization of strategic management is influencing the emergence of homogenization and convergence of companies worldwide. This will lead to integration of ideas and resources resulting in improved and accelerated activities of firms. Thus, the volume of manufactured products will increase as well as product’s quality giving the homogenized companies an opportunity to reap maximum benefits of globalization of strategic management. When homogenization takes place, there will be an exchange of cultural activities that may favor development of economy and working skills that can foster instant realization of company’s goals and objectives. Periodically, homogenization of companies or organizations will bring a balanced equilibrium of sharing where one will be in a position to have what he or she does not have through borrowing (Delfmann, 2005). These benefits can only come along with the globalization of strategic management. Prior globalization of strategic management, companies, and industries only employed a few number of staff within its geographical area of operation. However, with introduction of globalization of strategic management, firms are able to expand their operations to different parts of the world, which requires more personnel. As a result, the firms acquire more employees, thus providing them with occupation. This means that globalization of strategic management lead to creation of employment, hence improving people’s living standards. In addition, it leads to interaction of different people from different backgrounds, hence establishing a ground for cultural exchange. Cultural exchange leads to a globalized group of people from diverse backgrounds but with a common goal (Hill & Jones, 2007). Additionally, globalization of strategic management resulted in relocation and migration of employees to different countries. According to scholars, globalization helps companies to relocate some of its employees to different firms located in other countries, thus encouraging mingling and learning from each other. The relocated staff also receives more benefits due to its status and as a result, this creates comfort for the staff. Globalization is also leading to freelance services where employees do not need to be in fixed premises all the time. This helps companies tailor their customer’s wants and needs accordingly as freelance employees interact directly with them, thus receiving first hand information regarded to be very vital to a company’s decision making. Moreover, globalization of strategic management enables firms to outsource human resources. Initially, firms used to outsource only peripheral services that included janitorial services. However, as time went by, globalization of strategic management brought about outsourcing of core services such as customer services, financial services, and final product assembling services. This results in improved and efficient services offered by the firm, and increases the volume of production (Ungson & Wong, 2008). Therefore, the idea of businesses spending too much time or ignoring areas the company considers not core is no more relevant. Outsourcing of labor creates more employment opportunities for those people the firm would not be able to accommodate were it for the company to absorb. Furthermore, outsourced labor can perform better in that area called to work on since they would like to establish a relationship with the firm based on level of services offered. Globalization of strategic management gave rise to an increased number of clients that required firm’s instant attention. Therefore, it was upon firms to step up their services in order to meet their clients’ needs. Hence, they resulted in establishing call stations that operated twenty-four seven. Introduction of global economy provided firms with radical ways of maintaining clientele through less costly means since call centers are cheap to maintain and offer instant feedback. In this case, globalization of strategic management helped companies have and maintain huge numbers of customers at a cheap cost. This, in turn, reduced firm’s expenses incurred every month. Due to globalization of strategic management, the level of export and import increased because of mass production and supply. For example, establishment of Export Processing Zones in Kenya in 1990 led to massive production of finished goods. This led to availability of cheap manufactured goods that the company exported to overseas countries like the United States of America, thus creating global economic investment. Further, this offered cheap quality materials that attracted export-oriented investments, thus creating integrated markets between the countries involved. Not only did the exportation and importation of products help develop the domestic economy, it also diversified and expanded the supply chain of quality and cheap manufactured products. In the U.S., globalization of strategic management led to division of labor. Due to need for responsiveness and flexibility of employees, firms in America decided to relocate to offshore areas where labor was cheap and easy to acquire. This move came after globalization of strategic management arose because firms wanted to select new sites and explore new opportunities. For instance, IT firms in the U.S. moved their firms to Bangalore City of India where employees have high level of skills and pay demand is a fraction of what a US IT specialist would ask. In addition, communication companies in the West contract independent customer service providers in Kenya where customer representatives attend clients in the West over the phone on behalf of contracting company located in the US or UK. These outsourcing firms pay the independent contracted customer service providers very little amounts, which they are okay with, compared to what they could pay in case they employed customer service specialists from the West (Ungson & Wong, 2008). Therefore, globalization of strategic management created division of labor and its benefits to both independent contractors and outsourcing firms. Conclusion In conclusion, globalization helps strategic managers determine international market trends with regard to value and movement of commodities. Companies selling internationally are able to tail the level of monetary value in their prospective country of destination (market), and evaluate measures to take in order to attain maximum volume of sales. The impacts of global management strategies are diverse and responsible for market integration worldwide and responsible for formation and development of trade unions that led to strict management of businesses among the trading countries or continents. References Delfmann, W. (2005). Strategic management in the aviation industry. Surrey: Ashgate Publishing, Ltd. Hill, C., & Jones, G. (2007). Strategic management: An integrated approach. New Jersey: Cengage Learning. Hitt, M., et al. (2010). Strategic management: Competitiveness & globalization, concepts. New Jersey: Cengage Learning. Ramamurti, R., & Hashai, N. (2011). The future of foreign direct investment and the mulitnational enterprise. West Yorkshire: Emerald Group Publishing. Ungson, G., & Wong, Y. (2008). Global strategic management. New York: M.E. Sharpe. Read More