Challenges and Strategies for Going Global - Coursework Example

Challenges and Strategies for Going Global Student’s Name Institution Affiliation Challenges and Strategies for Going Global Introduction Over the past few decades, technology advancements have made the world smaller each day. Business barriers among countries have decreased, whereas innovations in the communication and transport have made the world a better place. Customers’ wants across the world have been standardized (Saxena, 1989). Therefore, going global is the top most agenda for many companies and the only they can satisfy their customers’ needs and remain competitive. The main reason firms are globalizing is to enable them manage risk, reduce cost thus increasing returns, and gain greater rewards through market growth (Deloitte & Touche, n.d). Every organization is restructuring along global lines due to the associated attractive package. However, managers encounter challenges in the process of going global that hinder their businesses from enjoying the benefits. In this regard, this research seeks to explore in detail what going global implies, some causes of the problems encountered, steps to be followed when going global, and examples of firms that are pursing globalization. Meaning of Going Global When people hear that a business is going global, they perceive the term differently, thereby perpetuating fallacy. Many believe that going global is doing international business; for instance, selling or buying products from different nations or multinational businesses such as business operating in different countries or global businesses, which mean hiring labor around world for different kinds of distribution chains. Nevertheless, going global is a broadening leadership state of mind that enhances innovative decision and strategies for business, firms, and nations (Gold Smith, 2013). Moreover, the concept of going global is not only reserved for executive, international, and multinational companies but it is also an important activity that every managers must carry out to keep pace with the current world. From the trend of the successful businesses, success rests largely on people and technology that the firm employs not necessarily on their cost of labor and materials. In every firm, a manager’s global frame of reference is key to success. Managers are responsible for employing labor, financial information, and resources in ways that enable growth of their firms in every environment (Gold Smith, 2013). When managers work across borders, they encounter many challenges. In reality, we are living in a world without borders; there is no way managers can isolate themselves from international forces. For instance, the FBI has ranked cybercrime the top most priority because electronic boundaries do not exist between nations (Daft, 2009). Today, every business is global to some extent; hence, they need the understanding of the extent to which global experience influences situations, prospects, and challenges for each business (Gold Smith, 2013). For instance, if one is operating a small business in one area or has employed labor from one locality, the business is affected by geopolitical meteorological, technological, biological, and other changes across the world. Therefore, going global is part of every manager’s business in order to drive business achievements. From this perspective, the whole world is a source of ideas, labor, customers, resources, and information (Saxena, 1989). Every manager, in every credible type of business, and in every corner of the world will have to go global thus facing new challenges each day. Although the challenges may differ in details with different locations, they are similar in their origin, struggle, and urgency (McKinsey Foundation for Management Research, 2012). Their origin is tied to the natural environment. As days go by, what initially was seen as innocent or harmless becomes a growing problem. The challenge in understanding these problems and coming to grasps the impact grows rapidly and in weight; thus, the problem becomes more complicated to managers than ever before (Choucri, 1995). Main Causes Of Problems That Managers Encounter while Going Global Cultural Convergence versus Cultural Divergence Contradiction or duality between cultural convergence and divergence is one of the main problems facing many managers in the global environment. Here, the main question is: does going global cause countries to become more alike in nature and viewpoint, or does it force them to retrench and strengthen their exceptional belief and value system? If the question of discussion is discovering the overall pattern of either convergence or divergence, it causes more queries among managers. Instead of forcing an answer that is somehow true, a duality viewpoint is necessary to see that going global truly leads concurrently to both increased convergence and divergence (Steers, Sanchez-Runde & Nardon, 2010). For instance, the fast food industry has widely dominated the current global market. Issues are being raised against the consumption of fast foods since they result in health complications and heavy influence of culture across the different nations. In the united State, traditional and healthy eating behaviors are becoming threatened with the consistent shrinking of the world cultural diversity. Plurality of Cultures versus Cultural Pluralism The concept of pluralities is the second challenge manager’s face when they decide to go global. Before the globalization wave started, the concept of plurality of culture was there (Steers, Sanchez-Runde & Nardon, 2010). For instance, China, India, and Brazil represent prospectives for any company wishing to go global since they are fast-growing countries in terms of global markets (Deloitte & Touche,n.d). However, each country has its own cultural features that must be considered for any business to be prosperous. Even today, the concept of plurality of culture is still working provided its added to the concept of cultural pluralism, which seems to be opposite. Cultural pluralism includes a chain of culture within a single society. Globalization process would not be complete without focusing on duality that enables the understanding of a firm’s background in terms of both cultural pluralism and plurality of culture. This duality can raise key issues for managers particularly in terms of the type of knowhow, expertise, and capabilities they need to acquire. The world today is characterized by plurality of cultures; hence, every organization that is going global must ensure cross cultural management skills in order to be successful. On the other hand, since the world is characterized by cultural pluralism, even organizations that tend to remain local in their operations, their managers need to work effectively across culture (Steers, Sanchez-Runde & Nardon, 2010). Inclusion versus Exclusion Duality of inclusion and exclusion is the third and final challenge facing managers and their organizations when restructuring to global lines. This is a question of winning or losing, having or having not in the game of globalization. In reality, it is known that globalization brings positive outcomes to those who can access resources and skills needed to keep with the speed of global innovations. Skillful and resourceful managers globalize themselves as they manage global challenges with ease while those who lack skill and resources rarely succeed because they are overwhelmed by the force and pace of global changes. Therefore, companies that take globalization challenges to their own benefit are always ahead of those that do not (Steers, Sanchez-Runde, & Nardon, 2010). Other Challenges Globalization challenges concurrently create energy that drives and limits ideologies, cultures, and behavior pattern and society objectives. When a manager recognizes these forces and challenges, he/she realizes a deeper knowledge benefit of going global. Moreover, it helps in alerting managers in identifying understated changes in the process that have great impact on their work. On the other hand, managers must take hold of these challenges and contradictions as they take their companies into another level since it is full of turbulence (Steers, Sanchez-Runde & Nardon, 2010). Strategies to Deal with the Challenges The decision of dealing with challenges of market globalization for managers is hard and complicated since there are internal and external forces to consider. External forces are those that revolve around the interaction of industry drivers of internationalization and varied ways of globalizing the business. The internal forces determine the strength of a firm in implementing the global strategy. Understanding the right interaction is the main aspect of formulating a global strategy. In this viewpoint, managers that take their business global face two main challenges. First is to understand the meaning of global strategy. Second is to get their companies to make it happen. There are five major steps of formulating a global strategy, which include “playing big in major markets, standardizing the key products, adopting a uniform market positioning and marketing mix, integrating competitive move across nations, and concentrating a value adding in a few countries” (Yip, Loewe & Yoshino, 1988). One of the most effective strategies to deal with the dual challenge is to adopt a uniform market position and market mix. The company that adopts a uniform market positioning and marketing mix saves more in the cost of developing marketing plans and strategies. In reality, good ideas are scarce, but managers can exploit those ideas through taking a uniform approach in the maximum number of nations (Yip, Loewe & Yoshino, 1988). In addition, the company gains internal focus. A firm can tussle with a number of brand names and positions across the globe, but on the other hand its competitor single-mindedly markets just one or two brands. Moreover, a company derives benefits from a common brand name internationally because even the media is advancing. For instance, Exxon has rapidly picked in the global market since it has consolidated its different brand names. Mercedes, Volvo, and BMW use the single brand strategy across the globe, and their images and positioning are consistent in different nations. Other companies that have successfully used the same brand name across the globe are Coca-Cola, Levis, and McDonald's. McDonald`s has also thrived in the concept of standardizing the key products approaches; customers in European and Japan may think that they eat the same hamburgers with Americans, but this is not the case because the ingredients have been customized for their taste. In addition, a French McDonald`s serves alcohol. Nevertheless, in all countries, the main product remains the same (Yip, Loewe & Yoshino, 1988). Black & Decker is a good example of a company pursuing global strategy in its manufacturing of hand tool. Before Black & Decker decided to restructure the firm globally, external and internal forces endangered the company. External pressure was coming from its rival company known as Makita, a powerful Japanese company. Makita strategy to manufacture and promote standardised products globally enabled it to become a low-cost producer, which facilitated the growth of its shares in the global market. Internally, Black & Decker lost prospects because global fiefdoms and nationalist chauvinism muffed co-ordination in product development and introduction of innovations. To respond to the challenge, Black & Decker decided to go global. It strengthened the main program to coordinate new product developments worldwide in order to develop main standardised products that could be marked globally with minimum alterations. Others included streamlining in R&D offers benefits of economies of scale, less effort duplication and fast production of new product. Black & Decker did not stop at that moreover, it reinforced the functional organisational by adding a larger responsibility to functional managers to coordinate with the state management. Black & Decker finally procured General Electric`s small appliance business to realize global economies of scale in production, distribution, and marketing. At first, this globalisation strategy was met with doubt and resistance from country management because they were deep-rooted in factionalism. The company’s CEO led by example and made some management changes that initiated driving force towards achieving globalisation benefits. Today, Black and Decker Company is spreading globalisation and have tangible roots. Conclusion In essence, every business is going global because it is just a matter of understanding the extent global experience influence situations, opportunities, and challenges for each. Therefore, there is a need to unmask fallacy that going global is the art of buying and selling product in different, but the widening leadership state of mind in order heightens innovative decision and strategies for business, firms, and even nations. This calls all managers of credible firms to go global. When going across the board, they may encounter problems such as cultural divergence and convergence, cultural pluralism and plurality of culture, and inclusion and exclusion. For manager to deal with these challenges, they have to purse a global strategy. Industry forces are key in determining whether going global will be achievable. A manager should analyse the company competitive position against the five global strategies, which are participation in major market, standardisation of key product, activity specialisation uniform market position, and integrated competitive strategy. Finally, it is worth noting that competition in the global market is stiff and requires managers with clear visions of the business and substantial effort as in the case of the CEO of Black and Decker Company. References Choucri, N. (1995). Global accord: Environmental challenges and international responses. Cambridge, MA: MIT Press. Daft, R. L., &Marcic, D. (2004). Understanding management. Mason, OH: Thomson/South-Western. Deloitte & Touche. (n.d.). Global Business Driven HR Transformation: The Journey Continues (Print Edition). Hulu.com Goldsmith, D. (2013). Going global: What it really means today. Retrieved  from http://www.foxbusiness.com/business-leaders/2013/08/08/going-global-what-it-really-means-today/ McKinsey Foundation for Management Research (New York, N.Y.). (2012). Perspective on global organization. Boston, MA: Harvard Business School Pub. Steers, R. M., Sánchez-Runde, C., & Nardon, L. (2010). Management across cultures: Challenges and strategies. Cambridge: Cambridge University Press. Yip, G. S., Loewe, P. M., & Yoshino, M. Y. (1988). How to take your company to the global market. Columbia Journal of World Business, 23(4). Saxena, A. K. (1989). Marketing management 4E. New Delhi, India. . Read More