Navigating Information Technology and Communication in the New Global Economy - Research Paper Example

Navigating Information Technology and Communication in the new global economy and Introduction The proliferation of information technology has increased globalization by reducing the world into a global village. Information communication technology has erased the physical boundaries and has enabled global economy to flourish (Sekkat, 2010). Currently, most of the successful organizations in the world are multinational corporations. As time goes by, more organizations, especially in the business sector, are increasingly shaping up to internationalize their operations the more. This is based on the realization that the best practices during these trying economic times are collaboration and diversification (Ahlstrom and Bruton, 2009). In order to undertake these strategies communication effectiveness becomes a determining factor. Effective communications and information technologies can enable an organization to make a successful acquisition and enter a foreign market or even share workers with other organizations. The downside of this is that there are many issues that may dodge the realization of such benefits. Some of these issues that pose challenges include language barriers, cultural differences and security risks in the form of economic fluctuations and social unrests (Frynas and Mellahi, 2011). This paper investigates and identifies information technology and communication challenges and then provides recommendations in form of the best practices so that organizations can dodge these potential for failure. Global Economy Information technology has been growing exponentially in the last three decades. This has enabled companies to penetrate the markets that were once out of reach. The US, for instance, had its major trading partners in the Western European countries, Australia, and China (Sekkat, 2010). With the growth of information technology and the apparent saturation of the domestic market, business organizations are now looking at emerging markets such as Brazil, India and many Asian and African countries. These countries are increasingly adopting information technologies and this makes them viable business partners (Meyer and Wit, 2004). Their potentials have not been tapped yet and this provides an opportunity for multinational organizations to maximize their profitability. However, the issues that are going to be discussed herein after may necessitate an organization to develop strategies in order to survive in these foreign countries with different languages, diverse cultural backgrounds and economic environments and volatility. Organizations that have been able to develop business and corporate strategies that have blended with the varying conditions have been successful in those countries (Hills and Jones, 2012). These organizations include AT & T, Coca-Cola, Nike, Unilever and many other multinational organizations. The following are the issues that these organizations were faced with in their internationalization of their operations and some of the best practices that they have set for others to follow suit. Language Barriers Even though the internet and other technological advancements have been able to erase geographical barriers and increased international trade, it has not been able to solve the issue of language barriers (Stone, 2011). Communication is critical in global economy. Effective communication in an organization can solve the issue of language barrier (Hills and Jones, 2012). This enables employees to communicate effectively and the organization to make effective collaboration with other organizations, customers and suppliers. Overcoming language barriers, ultimately, leads to corporate efficiency. Bailey (2012) noted that ineffective communication brought about by language barriers, on the other hand, reduces organizational potential to make an impact in the business world through causing misunderstandings. As a result, major business deals fail to be finalized and, if undertaken, delays may arise and overall change in the expected results of the projects. A research conducted by Economic Intelligence Unit established that language barriers could be detrimental to an organization’s success (Stone, 2011). The study showed that 75% of the managers in international organizations believed that the ability to overcome language barriers could make or break an organization’s success in penetrating foreign lands. Sixty seven percent of the managers stated that language barriers cause miscommunications which contribute to the inefficiency in an organization as instructions and directions are not implemented in time or are incorrectly interpreted (Stone, 2011). Forty six percent of the managers stated that the major issue brought by language barriers in an organization is that employees are deprived the ability to collaborate effectively. This may be necessitated by their inability to correctly interpret communications. Forty two percent thought that the greatest threat of language barrier is that productivity is below the optimal level (Breukel, 2013). The other reasons for addressing language barriers that were cited by these managers were to improve customer service, to increase workers’ respect for executives and make it easier to attract talented professionals of diverse languages. The other reasons were to reduce threats to worker’s safety and to reduce the employee turnover rate (Stone, 2011). Figure 1 below shows these reasons for addressing language barriers for organizations as cited by multinational corporation managers. Figure 1: Effects of language barriers in an organization (Source: Stone, 2011) Cultural Issues The people in the different parts of the world have different customs and traditions. Understanding these cultures is central to an organization’s success in a foreign country (OECD, 1997). Failure to take into consideration these cultural differences may cause misunderstandings and conflicts. Cultural diversity is a mindset that is becoming essential in the global business arena. According to Cullen and Parboteeah (2009), the economic fates of organizations in global business rest in understanding the eccentricities of different cultures. Regardless of the size, experience or the product or services an organization offers, understanding the different habits and unwritten rules in a foreign country is imperative (Cavusgil, Knight and Riesenberg, 2008). Understanding cultural differences in global economy provide valuable insights that may be used to inform the decisions of an organization. For instance, there are some countries whose cultural inclinations are that one should communicate loudly, while in others, a soft spoken verbal communication is preferred (Hills and Jones, 2012). Some cultures appreciate people who have a direct approach to communication while others prefer a flowery indirect way that involves people reading in between the lines in order to find out the real meaning of whatever is being communicated. Some cultures permit people to interrupt others when they are talking while others value those who have the ability to wait for others to complete their sentences before talking. Cultural differences may also arise when comes to the concept of time and appointments (Sekkat, 2010). Some cultures around the globe take the issue of appointments and deadlines strictly while others do not. Knowing the type of people an organization is engaging with is essential as it determines whether deadlines will be met among other things. For instance, the Germans are asserted to be the most time-conscious people in the world because they keep time. On the other hand, the Latin American and Africans are generally known to be taking time issues less seriously; to them a deadline or appointment time is nothing short of a rough guideline (Ahlstrom and Bruton, 2009). Knowing the cultural inclination towards time may help the organization to determine whether the time set allows for flexibility or not. Other factors such as the art of negotiations may also be determined by one’s culture (Meyer and Wit, 2004). Some cultures, for instance those of the Dutch allows for arguments during negotiations as part of constructive communication tool. People from Japan may view disagreements, especially in the public, as extremely offensive. To some cultures, the goal of negotiations may be to get into a contract while to others it may just be a mere tool of establishing relationships from where serious business deals could be undertaken. Some cultures view negotiations in black and white; as a win or lose situation while other cultures are more optimistic and accept that negotiations can result into a win-win eventuality (Cullen and Parboteeah, 2009). Some cultures prefer informal personal styles while others prefer formal; some have high emotional attachment to what they do while others are the exact opposite. Some cultures, for instance Americans, are quite moderate or low risk takers while others such as the Asians and Indians are high risk takers. Lastly, some cultures tend to have their organizations run by a one, definite leader while some cultures around the globe appreciate circumstances were everybody is a leader in his or her own right and decisions are reached through consensus (Sekkat, 2010). Figure 2 illustrates the different issues that may be influenced by cultural diversity in global economy. Figure 2: Issues causing cultural diversities (Source: Cavusgil, Knight and Riesenberg, 2008) Time Zones Difference in time zones, though relatively appreciated as a global economy issue, is also crucial. Differences in time zones may affect the opportunities an organization is able to seize (Meyer and Wit, 2004). Deals and opportunities may get lost if an organization does not align itself with the time zone of the country it is trying to venture in. Time zone difference also affects the patterns of trading for organizations undertaking business activities. These changing patterns may affect the amount of time that employees have to work (OECD, 1997). Time deadlines that are allocated without considering time differences between the locations may be missed as a result. Work Ethics Work ethics are values that one follows when undertaking their work assignments (Frynas and Mellahi, 2011). These values are built on hard work and diligence. Different people around the world have different levels of work ethics; some are good while some are bad. People with good work ethics believe that there are benefits in working hard and that working hard benefits them in the long run as it positively influences their character. Work ethics may determine employees’ reliability, employees’ initiative taking, their skill possession and their ability to submit to authorities (Ahlstrom and Bruton, 2009). The work ethics, for instance, may also affect the number of hours people work and the effort those people put in their work. People from Japan, China and Korea are said to be working harder than those from European countries and the US (OECD, 1997). In the US, for instance, people of Hispanic origin generally work harder and for longer hours than their counterparts of African origin and Caucasians (Hills and Jones, 2013). Apart from working hard, they also have strong family support systems. Security exposures and Economic Liabilities Most of these emerging economies are in the world countries and, therefore, are faced with unique security and economic challenges. Physical security of properties and cyber security are still major issues. Most of the emerging countries are faced with cyber security issues and data theft is rampant (Sekkat, 2010). The markets are also fluctuating making forecasting a tricky undertaking. The market fluctuations lead to low productivity levels because budgeting becomes inaccurate at best. The market fluctuations also cause inefficient value chains with value added in the channel being lost during the transition. Most of these emerging countries are also characterized by social unrest due to low pay (Sekkat, 2010). There are frequent industrial actions such as strikes which may affect an organization’s production levels. Best Practices/ Solutions Successful organizations that have been able to internationalize their operations have adopted some best practices in the industries in order to successfully maximize the benefits of global economy. The following are some of the solutions to the aforementioned problems. Language barrier is the major barrier for global cooperation for organizations. To address the issue of language barriers, most organizations roll out plans to increase the ability of their employees to communicate (Meyer and Wit, 2004). Organizations are increasingly hiring individuals who are multilingual. Managers who are multilingual are better placed to manage multinational ventures and have higher chances of securing employment opportunities if they have the right qualifications. Organizations should also focus on the initial point of contact with their customers or clients (Cullen and Parboteeah, 2009). Depending on how the clients make contact with the organization, for example through mobile phones or the organization’s website, different methods could be adapted. After identifying the channel of communication, a person who is an expert on that language or several languages could be used to handle the inquiries. A receptionist or the telephone operator could learn different languages so that communicating with different clients becomes easier. If there is a huge traffic of phone calls, an inbound call center can be established (Hills and Jones, 2012). Another proactive approach that may be taken by an organization is using an interpreter (Sekkat, 2010; OECD, 1997). This may be in form of a person or software. There are many programs that can be used to translate text from one language to another. Even though they may not be absolutely accurate, they help immensely. The use of a program that interprets text can be complemented by the use of emails as the official form of communication. Translate Google, for instance, can translate a document in a couple of hours and goes a long way towards making a client feel valued (Hills and Jones, 2012). As for cultural differences, organizations should embrace the cultural differences through education and group interactions. The trick lies in understanding cultural diversities. The Johari Window technique can be used to provide insight into the existing cultural differences between the two locations (Selfawareness.org.uk, 2014). The insights can then be used to improve performances and productivity. The Johari Window can be used to show the relationship between self and others. The organization should try to characterize its prospective foreign location into the four quadrants of the window. The two most important quadrants are the arena quadrant and the unknown quadrant (Selfawareness.org.uk, 2014). The arena or open quadrant entails the details that both the profiler and the profiled country know about the subject. The unknown quadrant is what is not known to the profiler organization or the country being profiled. The task is to provide insight through making the unknown open. This involves researching the culture of the foreign country and adjusting the organization’s practices to fit the foreign culture. Apart from studying the foreign culture, the organization should also consider hiring managers that are multicultural. As for time zones, organizations can address the issue by taking into consideration the time zone differences in their decision making so as to allow for timely collaboration (Ahlstrom and Bruton, 2009). The organizations can also make arrangements so that their employees in the different time zones work in night and day shifts that complement each other for continuous productivity. Downtime is, thus, avoided and production optimized. To address the differences in work ethics, the organization can set their own standards that they expect from their partners or employees overseas (Stone, 2011). The standard accountability measures can be formed for the different cultures all over the world to optimize production. As for security exposures and economic liabilities, organizations can diversify or pass along these risks to organizations that are adept at handling them. For example, physical security of goods can be left in the care of security service providers. The organization should also develop controls to alleviate risks and create cost efficient and effective strategies by engaging insurance companies (Frynas and Mellahi, 2011). Information technology may be used to provide constant flow of information that may inform the management of economic fluctuations. Lastly, contemporary production methods such as Just In Time and outsourcing can be used to lower production costs in foreign lands by lowering the inventory costs. Conclusion The global economy is increasingly becoming important to organizations that are internationalizing their operations. The developed world has penetrated most of its market and is now looking at the emerging economies to find viable partners so as to expand their operations (Meyer and Wit, 2004). However, this globalization has not been without challenges. Te major challenge to globalization has been language barrier. The others include cultural differences, differences in time zones and work ethics and economic liabilities. Organizations that wish to take full advantage of the global economy have to take into consideration and address these challenges effectively. The better an organization addresses these challenges the better placed it is to internationalize operations and enjoy the benefits of globalization (Sekkat, 2010). References Ahlstrom, D., & Bruton, G. (2009). International management: Strategy and culture in the emerging world. New York: Cengage Learning. Bailey, A. (2012). Language barriers and miscommunications are stifling growth. Retrieved from http://www.cnbc.com/id/47251632 Breukel, E. (2013). Overcome language barriers in global business. Amsterdam: Intercultural Communication. Cavusgil, S., Knight, G., & Riesenberg, J. (2008). International Business. New York: Prentice Hall. Cullen, J., & Parboteeah, P. (2009). International Business Strategy and the Multinational Company. New York: Routledge. Frynas, G., & Mellahi, K. (2011). Global strategic management. Oxford: Oxford University Press. Hill, C., & Jones, G. (2012). Strategic management: An integrated approach. New York: Cengage Learning. Meyer, R., and Wit, B. (2004). Strategy: Process, content, context. London: Cengage Learning. Organization for Economic Cooperation and Development. (1997). Globalization and small and medium enterprises (SMEs). Paris: OECD Publishing. Sekkat, K. (2010). Market dynamics and productivity in developing countries. New York: Springer. Selfawareness.org.uk. (2014). Understand the Johari Window model. Retrieved from http://www.selfawareness.org.uk/news/understanding-the-johari-window-model Stone, R. (2011). Reducing the impact of language barriers. New York: Forbes Insight. Read More