Globalization Issues in Business and Academic World Today - Coursework Example

Strategy and Globalization Total Number of Words 754 Introduction Globalization is one of the biggest issues being tackled in the politics, business and academic world today. (Smith & Yaw, 2002: p. 1; Tierney, 2004) In 1990s, large-scale businesses are more focused on producing more goods using less investment on capital, human resources, and raw materials. Due to the rapid improvements on communications technology, economic freedom and the continuous promotion of trade liberalization (World Trade Organization, 2008), modern business trend has gradually shifted from multinationalism to globalization. Globalization is not only focused on the continuous global movements of goods and services from one country to another but also the global traffic of human resources. (Steger, 2003: p. 37) With regards to the large supply of available work force in the labor market, medium- and large-scale businesses are taking advantage of hiring competitive employees. Likewise, it is also crucial for businesses today to actively participate in the trading of goods and services in the world market. As part of discussing the valid reasons that makes it important for modern managers today to have a good understanding of the process of globalization, a literature review will be conducted in the study. To give the readers a better understanding of the subject matter, the first part of the literature review will discuss about the general information and the main purpose of globalization followed by analyzing the factors that makes it important for modern managers to have a good understanding of the globalization process. Prior to conclusion, reasons behind the need to implement and promote cultural diversity within the work environment will be tackled in details. Literature Review General Information Including the Main Purpose of Globalization Globalization is “a process of interaction and integration among people, companies, and governments of different countries which is driven by international trade and investment through the use of information technology.” (The Levin Institute, 2008) Basically, the concept of globalization allows business people to maximize their available financial resources by taking advantage of the low-cost products and services that are readily available from developing countries. Because of the differences in monetary exchange rate, large-scale businesses from developed countries are able to purchase more homogenous products and highly competitive human resources at a much lesser price. Therefore, large multinational companies could easily compete with small-scale local businesses by being able to offer homogenous products to its target consumers at a relatively low market price. (Jain, 2003: p. 1 – 2) Upon analyzing the world market today, globalization plays a crucial role in strengthening the dominance of capitalism within the global economic system which indirectly erodes the importance of local cultures and traditions by establishing a single business culture around the world. (Stiglitz, 2002; Kellner, 1998 & 1997) Aiming to promote global trading, the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) among others have exerted a lot of effort in removing the global trade barriers to increase economic growth among the developing countries. (Mender, Baker, & Korten, 2001) Globalization affects not only the movements of goods and services but also the available human resources. Prior to globalization, people are dependent on the search for employment within the domestic market. Since the low-paying jobs that are available in developing countries is not sufficient to financially support the financial needs of each family, millions of people from developing countries are forced to search for better job opportunities in developed countries. Likewise, people from developed countries are forced to take advantage of establishing business in developing countries As a result, family relations and sentiment lessen in exchange with monetary gain. The main purpose of globalization is to promote free trade across the world by removing all possible barriers that will prevent people from allocating the world’s resources more efficiently. (Nanduri, 2006) This will enable business people to maximize the use of available human and/or material resources by linking the trade and development of one country to another. In the process of promoting free trade in the world market, big multinational companies are expected to earn a more profit by making use of the lowest paid human resources which are readily available in developing countries all over the world (Tasini, 2007). For this reasons, modern managers today are being challenged to have a better understanding with the business process behind globalization. Reasons Why Modern Managers should have a Good Understanding of the Globalization Process Globalization process is actually referring to the business practice that aims to integrate the world economy, culture, technology and business governance including the people who lives in different countries. (Lopez, 2000) Since globalization significantly involves the integration of people with different racial, ethnic, religious, and cultural background, globalization process is not only being powered by the existing technological changes, economic activities, and political forces but also the impact of dealing with a diverse culture that exists in each country (Mcfaul, 2006). Aside from the fact that globalization increases business insecurity, it also contributes to a significant change in the way traditional business processes are being conducted (Connell & Wood, 2005). The significant changes in the way businesses are being operated has shifted from the local movement of goods to a more rapid international trading of goods and services. The shift from a pure national economy into a globalized economy is made possible through continuous global trade, outsourcing of goods and services, foreign direct investment, the use of information and communication technology, migration, and the international capital flows. (Friedman, 2008, p. 49; Bhagwati, 2004) For this reason, Lopez (2000) stated that the “economic power of a country is no longer strongly associated with political power”. Instead of relying too much on political power, the World Trade Organization (WTO) in collaboration with other related agencies like the the General Agreement on Tarrifs and Trade (GATT), International Trade Organization (ITO), International Trade Relations (ITR), G-7/G-8, and the World Economic Forum among others are finding ways to strengthen the existing global trade policies in order to protect the international traders as more businesses are becoming activein the global markets (International Trade Relations, 2008; World Economic Forum, 2008; Barry & Honey, 2001; Anderson & Cavanagh, 1997). To ensure that more businesses are able to take advantage with the consequences of globalization, the World Commission has been made responsible in regulating the world economy in accordance with the social dimension associated with globalization (World Commission, 2003). Given that globalization process is bounded by the economic, polical, and social dimension of each developed and developing country (Lopez, 2000), modern managers are required to have a better understanding with regards to globalization process to enable them to have a better competitive edge as compared with other business people who are very much knowledgable on international trading policies. In line with this matter, modern managers has to be familiar with the continuously changing globalization and business law to avoid unintentionally violating the globally recognized criminal code on issues related to bankruptcy, intellectual property righs, banking procedures, and other related corporate law aside from the standard international trading regulations, rules and other related legal practices (Global Policy Forum, 2008). The Need to Implement and Promote Cultural Diversity within the Work Environment Most managers today are acknowledging the importance of implementing and promoting the importance of cultural diversity at work not only because the employment law requires employers to treat employees equally but also to create a positive public image and/or increase the company’s profitability by enhancing the quality of its business operations locally or within a foreign land. (Corner & Soliman, 1996) For this reason, it is a duty of modern managers to choose the type of diversity perspective aside from strengthening the implementation of these perspectives within the work environment. In general, there are three diversity perspective known as: (1) access-and legitimacy; (2) discrimination-and-fairness; and (3) integration-and-learning. Access-and-legitimacy perspective is actually based on acknowledging that domestic and international markets and its constituencies are culturally diversed (Janssens & Zanoni, 2005). Although this type of diversity perspective could strengthen the business relationship between the busienss organization and its target market, the problem with staying focused on allowing the cultural diversity of a business organization to be dictated by the culture of its consumers, markets, and its contituents is that employees may end up feeling marginalized or exploited (Thomas & Ely, 1996). Discrimination-and-fairness perspective is based on recognizing the fact that work discrimination is not a legally accpetable business practice. (Thomas & Ely, 1996) The implementation of this type of diversity perspective is necessary since it enables managers to promote a morally acceptable work practice among employees in the sense that it promotes fair treatment and justice to all people who wishes to be employed. Under this type of diversity perspective, HR Manager strengthens the process of its hiring and promotion by develop strategies on that could effectively remove barriers related to work discrimination and prejudicial attitudes against the minority. The integration-and-learning perspective perceives cultural diversity as an important asset that will enable the business organization meet its organizational goals and business objectives. (Janssens & Zanoni, 2005; Thomas & Ely, 1996) Since employees under this perspective are inspired to learn new ideas from one another, employees are expected to easily adapt with organizational changes caused by internal and external pressures. Considering the advantages and disadvantages of these three diversity perspectives, managers are responsible in choosing and integrating the benefits of these perspective in order to strengthen the work efficiency of employees. For example: Managers may choose to comboine integration-and-learning perspective with discrimination-and-fairness perspective since integration-and-learning perspective strengthens cultural diversity within the organization by encouraging employees to develop their own cultural identity and allowing each employee to value and respect the cultural identity of their co-workers whereas discrimination-and-fairness perspective prevent unecessary organizational problems caused by prejudism and racial discrimination which could negatively affect the collective work performance of employees. Conclusion In order to remain competitive within the global markets, modern managers are being challenged to learn more about the policies and regulations related to the way international business transactions are being conducted. Despite the era of globalization, there are a lot of the modern managers who works in another country remains unfamiliar with regards to the standard international trading practices and regulations. To enable modern managers to compete in the global market, corporate management should provide necessary trainings with regards to the globalization process. One of the common factors that make managers fail to successfully expanding the business is the cultural differences between two different countries. For this reason, modern managers should be knowledgeable with the application of cultural diversity within the workplace. References Anderson, S., & Cavanagh, J. (1997). Foreign Policy in Focus. Retrieved November 7, 2009, from World Trade Organization: Vol. 2, No. 14: http://www.fpif.org/briefs/vol2/v2n14wto.html Barry, T., & Honey, M. (2001, July). Foreign Policy in Focus. Retrieved November 7, 2009, from G8 and Global Governance: http://www.fpif.org/briefs/vol6/v6n27g8.html Bhagwati, J. (2004). In Defense of Globalization. New York: Oxford University Press. Connell, R., & Wood, J. (2005). Globalization and Business Masculinities. Men and Masculinities , 7(4):347 - 364. Corner, D., & Soliman, C. (1996). Organizational Efforts to Manage Diversity: Do They Really Work? Journal of Managerial Issues , 8(4):470 - 484. Friedman, T. (2008). The Dell Theory of Conflict Prevention. Emergin: A Reader. Ed. Barclay Barrios. Boston: Bedford, St. Martins. Global Policy Forum. (2008). Retrieved November 7, 2009, from Globalization of Law : http://www.globalpolicy.org/globaliz/law/index.htm International Trade Relations. (2008). Retrieved November 7, 2009, from Official Website: http://www.internationaltraderelations.com/ Jain, S. C. (2003). Toward a Global Business Confederation: A Blueprint for Globalization. Praeger. Janssens, M., & Zanoni, P. (2005). Many diversities for many services. Human Relations , 58(3):311 - 340. Kellner, D. (1997). Intellectuals, the New Public Spheres, and Technopolitics. New Political Science , Vol. 41, No. 42, pp. 169 - 188. Kellner, D. (1998). Multiple Literacies and Critical Pedagogy in a Multicultural Society. Educational Theory , Vol. 48, No. 1, pp. 103 - 122. Lopez, C. (2000). United Nations Chronicle Online Edition. Retrieved November 7, 2009, from Managing the Globalization Process: THE UN IN THE NEW CENTURY. Vol. XXXVII, No. 4 : http://www.un.org/Pubs/chronicle/2000/issue4/0400p19.htm Mcfaul, T. (2006). Religion in the Future Global Civilization: Globalization Is Intensifying Religious Conflicts. What Will Happen in the Years Ahead? The Futurist , Vol. 40. Mender, J., Baker, D., & Korten, D. (2001). Does Globaization Help the Poor? International Forum oon Globalization Bulletin , Vol. 1, No. 3. Nanduri, R. (2006, March 10). Radiff News. Retrieved November 7, 2009, from Globalization, 30,000 Feet!: http://www.rediff.com/money/2006/mar/10guest.htm Smith, I. G., & Yaw, D. A. (2002). Globalization, Employment and the Workplace Diverse Impacts? Routledge. Steger, M. B. (2003). Globalization: A Very Short Introduction. Oxford University Press. Tasini, J. (2007, May 24). Retrieved November 7, 2009, from MSM Discovers: Globalization Creates Inequality: http://www.huffingtonpost.com/jonathan-tasini/msm-discovers-globalizat_b_49222.html The Levin Institute. (2008). Retrieved November 7, 2009, from What is Globalization?: http://www.globalization101.org/What_is_Globalization.html Thomas, D., & Ely, R. (2001). Cultural Diversity at Work: The Effects of Diversity Perspectives on Work Group Processes and Outcomes - Statistical Data Included. Administrative Science Quarterly , 46(2):229 - 273. Tierney, W. (2004). Globalization and Educational Reform: The Challenges Ahead. Journal of Hispanic Higher Education , 3(1):5 - 20. World Commission. (2003, February 4). Retrieved November 7, 2009, from World Commission on the Social Dimension of Globalisation (WCSDG): http://trade.ec.europa.eu/doclib/docs/2004/july/tradoc_118268.pdf World Economic Forum. (2008). Retrieved November 7, 2009, from The Global Enabling Trade Report 2008 : http://www.weforum.org/en/initiatives/gcp/GlobalEnablingTradeReport/index.htm World Trade Organization. (2008). Retrieved November 7, 2009, from What is the World Trade Organization: http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm Read More