Globalization and Its Impacts on an Organization - Literature review Example

GLOBALISATION AND ITS IMPACTS ON AN ORGANIZATION Name: Course: Tutor: Date: INTRODUCTION: Globalization is an activity that has been present since time in memorial, since the colonization of nations, to the existence of independent nations, to the growth of the transport industry- creation of train, airplane, ships, to the growth of trade across boundaries, globalization has been in existence and thriving. The activities involved across boundaries may be encouraged politically, economically, socially, technologically, culturally, as long as they allow people to interact across the nations (Globalisation and Society, 2008). Globalization transcends various aspects such as culture, gender as it captures the various nations and their issues. It also brings about economic and political significance across the nations (Globalisation and Society, 2008). Globalization influences the individual activities that eventually span across the borders. It is motivated by policies and actions sprouting from private economic representatives, organizations, financial institutions, or individuals who are in search of earnings (Jwa, 1997). In addition, it is mostly has characterization by trade exchange across nations, broadening of modern technologies that are used across the borders, intertwining of nation’s economic market, and sharing of groundbreaking ideas in fabrication and manufacturing structures across nations (Jwa, 1997). Globalization encourages interdependence amongst organizations therefore increasing not only the market share but also the economies of the nations and generation of the diverse business ideas (Jwa, 1997). In general, globalization promotes the interaction of various nations hence activities of these nations be it trade, policies, and technology, among other, transcend national boundaries. This can be an added advantage to the organizations, which are set up in the different nations (Globalisation and Society, 2008). DEFINITION OF GLOBALISATION: Al-Rodhan (2006) suggested that globalization could not be distinguished using a single idea and preset within a timeframe, nor can it be illustrated clearly with a commencement and an ending. It may however, be defined as the procedure that covers the incorporation of individual and other non-human actions that are because of international and trans-cultural combination. Al-Rodhan (2006) added that the definition of globalization has been linked with growth, steadiness, advancement, incorporation, and collaboration. He also added that sometimes it would be used when referring to deterioration, decay, and colonialism. Overall, globalization is understood differently depending on the person’s civilization background, geographical positioning, political beliefs, social standing, religious associations, and ethnic background (Al-Rodhan, 2006). Beerkens (2004) brought out another perspective of the definition of globalization, where he suggested it to mean the process of global correlation between nations. Whereby, fundamental social provisions such as politics, religion, power, marketplaces, principles, standards, rights, nationality, individuality, customs, and unity are not embedded from their spatial framework due to the dissemination, mass movement, flexibility, and extension of international flowing of products, inhabitants, economies, imagery, and information (Beerkens, 2006). In addition, he suggests that Angell (1911) elaborated that globalization had caused the world financial system to be so extremely mutually dependent such that national sovereignty became survival, particularly in monetary marketplace (Beerkens, 2006). Tomlinson (2003) brought out another perspective of the definition of globalization where he proposed that it was essential to understand a more complex view of globalization as a multidimensional theory that functions concurrently and in harmony in the financial, technical communication, civilized, and political areas of human ways of life. He added that despite of the positive affiliations of the definition of globalization, there are some negative associations of the same (Tomlinson, 2003). This involves private enterprise, which is achieved in its civilization aspect through complicated western subjugated media; which may involve not the easy compulsory sharing of particular western ways of life but a more complicated variety of institutional characteristics of cultural civilization (Tomlinson, 2003). BENEFITS OF GLOBALISATION TO AN ORGANIZATION: Since globalization has caused the world financial system to be so extremely mutually dependent such that national sovereignty becomes survival, particularly in monetary marketplace (Beerkens, 2006), the promotion of the interaction of various nations hence encouraging activities of these nations be it trade, policies, and technology, among other, transcend national boundaries. This can be an added advantage to the organizations, which are set up in the different nations (Globalisation and Society, 2008). In addition, since globalization can be viewed as a multidimensional theory that functions concurrently and in harmony in the financial, technical communication, civilized, and political areas of human ways of life (Tomlinson, 2003), then the organization stands a chance of expanding its market share and value across the national boundaries. From one of the general definitions of globalization, the idea of most important increases in universal trade and interactions, in an ever more open, incorporated, and unlimited international border economy cannot be ignored (Intriligator, 2003). As a result, outstanding development in universal trade and interactions has been realized, not only in conventional intercontinental trade in goods and services for an organization, but also in swapping of foreign exchange (Intriligator, 2003). The capital arrangements, exchange of technological knowledge and inventions, intercontinental streaming of information and ideas, travelling of people through global travel and relocation, are among other circumstances in which an organization stands to benefit eventually (Intriligator, 2003). Since there is enhanced directness in the international financial system, an organization would benefit from the incorporation of markets on an international basis, and an increase in its global cash flows would be realized due to the impacts of the transformation to an unlimited world borders (Intriligator, 2003). The technological progress experienced from the interchanging of inventions and ideas will eventually considerably reduce the cost of movement, communications, data dispensation, information storage, and reclamation would be among the benefits of the organization (Intriligator, 2003). In addition, globalization, with the help of technological advancements such as the internet, benefits an organization in such a way that they are able to market their products and services to a wider market scope at the same time be able to offer customer service facilities which may be based anywhere in the world (Stripling, 2000). With that reason more job opportunities would be created in the organization as a result of expanding its territory, hence it is able to benefit the society. Offshore accounts are another benefit of globalization to an organization since it may choose to save its money to off shore accounts (Stripling, 2000). COSTS OF GLOBALISATION TO AN ORGANIZATION: With the expansion of trade to international backyards, there are various costs that globalization will bring to an organization. One of the costs to be incurred would be in technological advancements. This will be so since the organization would require equipments and knowledge so as to reach a certain standard of technical progression. In addition, since globalization, with the help of technological advancements such as the internet, benefits an organization in such a way that they are able to market their products and services to a wider market scope, the organization will need to cater the costs of running its services in the internet (Stripling, 2000). At the same time, given that an organization will be able to offer customer service facilities which may be based anywhere in the world, costs of supporting the staff across the borders have to be factored by the organization (Stripling, 2000). As a result of the outstanding development in universal trade and interactions, not only in conventional intercontinental trade in goods and services for an organization, but also in swapping of foreign exchange (Intriligator, 2003), issues such as capital arrangements, exchange of technological knowledge and inventions, would require heavy investment by an organization. The intercontinental streaming of information and ideas, would be regarded as an asset to any organization, hence serious investment would be needed by the organization if it is to maintain a high global standard (Intriligator, 2003). With the introduction of intercontinental movement of people through global travel and relocation, are among other circumstances in which an organization stands to benefit eventually, this cost would be catered for by the organization, if its standards were to be maintained in the global status (Intriligator, 2003). With the introduction of off shoring by globalization, the productivity of an organization is prolonged as well as the sales are heightened, eventually the organization will end up employing more people than it intended; as a result, it would have to sustain the additional employees (Bacchetta & Jansen, 2011). CHALLENGES OF GLOBALISATION TO AN ORGANIZATION: Since globalization has caused the world financial system to be so extremely mutually dependent such that national sovereignty becomes survival, particularly in monetary marketplace (Beerkens, 2006), the promotion of the interaction of various nations hence encouraging activities of these nations be it trade, policies, and technology, among other, transcend national boundaries an increase in competition among organizations cannot be evaded. Globalization allows the organization to expand its market but with this expansion, the organization has to restructure its necessities towards its employees and as a result, new policies and strategies have to be in place if the organization has to stand the global economic turbulence (Macdonald, 1997). The customary practice in the organization will have to be conformed to the global standards since the organization will be transcending the national boundaries. The employee policies of the organization will have to be adjusted to global standards (Macdonald, 1997). Given that globalization according to the world financial systems, encourages national currencies to become dependent on one another (Intriligator, 2003). For economic survival of an organization, then there are several things it has to consider such as technological advancement, increasing market share, capital arrangements, exchange of technological knowledge and inventions, which would require heavy investment by an organization. This would create external pressure to an organization since raising the capital for expansion would also be another challenge (Macdonald, 1997). Globalization encourages the expansion of markets across boarder this may lead to the retrenchment of some of the employees in the native of the organization, in order for it to be able to cut down costs and expand its staff to countries that would not have expensive labor (Mrak, 2000). This will eventually lead to low productivity of a nation since many of its people will have no jobs. Therefore, the challenge for the organization is to be able to maintain a balance in the nation that the business has originated as well as the nations that it is planning to expand its market (Macdonald, 1997). CHALLENGES OF GLOBALISATION TO NATIONAL GOVERNMENTS: Globalization has caused the world financial system to be so extremely mutually dependent such that national sovereignty becomes survival, particularly in monetary marketplace (Beerkens, 2006), therefore this will make governments to have a competitive attitude in terms of having a higher currency, which will translate into power in the world economy. In addition, the promotion of the interaction of various nations which result to encouraging activities of these nations be it trade, policies, and technology, among other, transcend national boundaries an increase in competition among government in terms of sustaining innovative ideas cannot be evaded. Another challenge that holds for national governments due to globalization is the retention of employees in organizations as they expand their markets across the borders. For instance, since globalization encourages the expansion of markets across boarder this may lead to the retrenchment of some of the employees in the native of the organization, in order for it to be able to cut down costs and expand its staff to countries that would not have expensive labor (Mrak, 2000). This will eventually lead to low productivity of a nation since many of its people will have no jobs. Therefore, the challenge for the organization is to be able to maintain a balance in the nation that the business has originated as well as the nations that it is planning to expand its market (Macdonald, 1997). Therefore, it is the national governments challenge to maintain strict policies and regulations to organizations that are planning and have expanded their markets across the nation’s border. For economic survival of an organization, then there are several things it has to consider such as technological advancement, increasing market share, capital arrangements, exchange of technological knowledge and inventions, which would require heavy investment by an organization. This would create external pressure to an organization since raising the capital for expansion would also be another challenge (Macdonald, 1997). Therefore, another challenge that holds for national governments due to globalization is ensuring capital retention of organization so that during financial bursts such as inflation ,the organizations will not be highly affected, and in return be able to support the government through private loans (Mrak, 2000). IMPACTS OF GLOBALISATION TO THE ORGANIZATION: There are positive and negative impacts of globalization to an organization. The positive impacts include; the promotion of the interaction of various nations hence encouraging activities of these nations be it trade, policies, and technology, among other, transcend national boundaries. This can be an added advantage to the organizations, which are set up in the different nations (Globalisation and Society, 2008). Another positive impact would be technical communication advancement; this can be a result of buying technological knowledge or equipment by an organization from across the borders so as to improve its productivity. The technological advancements in turn will increase the chances of expanding its market share and value across the national boundaries (Tomlinson, 2003). Another positive impact of globalization to an organization is that they are able to market their products and services to a wider market scope, (Stripling, 2000). At the same time, given that an organization will be able to offer customer service facilities which may be based anywhere in the world (Stripling, 2000). The negative impacts of globalization may include; since globalization encourages the expansion of markets across boarder this may lead to the retrenchment of some of the employees in the native of the organization, in order for it to be able to cut down costs and expand its staff to countries that would not have expensive labor (Mrak, 2000). This will eventually lead to low productivity of a nation since many of its people will have no jobs. Therefore, the challenge for the organization is to be able to maintain a balance in the nation that the business has originated as well as the nations that it is planning to expand its market (Macdonald, 1997). Another negative impact of globalization to the organization would be the retention of capital arrangements by the organization as its expanding its market share. As we know for economic survival of an organization, then there are several things it has to consider such as technological advancement, increasing market share, capital arrangements, exchange of technological knowledge and inventions, which would require heavy investment by an organization (Macdonald, 1997). CONCLUSION: Globalization is an activity that has been present since time in memorial, since the colonization of nations, to the existence of independent nations, to the growth of the transport industry- creation of train, airplane, ships, to the growth of trade across boundaries, globalization has been in existence and thriving (Globalisation and Society, 2008). Globalization influences the individual activities that eventually span across the borders. It is motivated by policies and actions sprouting from private economic representatives, organizations, financial institutions, or individuals who are in search of earnings (Jwa, 1997). There are benefits of globalization such as the promotion of the interaction of various nations hence encouraging activities of these nations be it trade, policies, and technology, among other, transcend national boundaries (Globalisation and Society, 2008). An organization will benefit as a result of increasing its market share as well as staff. The technological advancements enable an organization to have a competitive edge (Stripling, 2000). There are challenges of globalization to an organization which include the organization’s ability to be able to maintain a balance ,in terms of staff retaining, in the nation that the business has originated as well as the nations that it is planning to expand its market (Macdonald, 1997). Another challenge imposed by globalization to an organization includes the external pressure created to an organization for raising capital in order to maintain better competitive edge globally hence; raising the capital for expansion would also be another challenge (Macdonald, 1997). There are costs of globalization as well, and they include costs to be incurred in technological advancements, costs of supporting the staff across the borders have to be factored by the organization (Stripling, 2000). Therefore, we can conclude with every advancement, there are benefits that would be realized by the organization. There would be costs that the organization will have to incur so that it can not only expand its market, obtain technological as well as staff advancement, but also be able to retain its capital structure. There will be challenges the organization will face as it conforms to globalization and as it is running its businesses across the nations. References: Al-Rodhan, D. N. (2006). Definitions of Globalization: A Comprehensive Overview and a Proposed Definition. Geneva: GCSP. Bacchetta, M., & Jansen, M. (2011). Making Globalization Socially Sustainable. Geneva: World Trade Organization. Beerkens, E. (2006). Globalisation: Definitions and Perspectives. Danaeefard, H., & Abbasi, T. (2012). Globalization and Global Innovations. el-Ojeili, C., & Hayden, P. (2006). Critical Theories of Globalization. New York: Palgrave Macmillan. Exforsys. (2009). Globalization Challenges. Exforsys . Gatignon, H., & Kimberly, J. R. (2005). Globalization and its Challenges. Cambridge University press. (2008). Globalisation and Society. Intriligator, M. D. (2003). Globalization of the world economy: potential benefits and costs and a net assessment. Milken Institute. Jwa, S. H. (1997). Globalization and New Industrial Organization: Implications for Structural Adjustment Policies. In T. Ito, & A. O. Krueger, Regionalism versus Multilateral Trade Arrangements, NBER-EASE (pp. 313 - 344). University of Chicago Press. Macdonald, D. (1997). industrial relations and globalization: challenges for employers and their organizations. Bangok: ACT/EMP publications. Mrak, M. (2000). Globalisation: Trends, Challenges and Opportunities for countries in transition. Vienna. Pook, L. A., Hart, M., & Szabo, Z. (2004). Organizational Responses To Globalization In Some Developing Countries. Purcell, D. (2011). Globalization and The Role of Standardization. Stripling, M. (2000). Globalization. Tomlinson, J. (2003). TGT2eC23. In J. Tomlinson, Globalization and Cultural Identity (pp. 269 - 277). Read More