Globalization
Discuss about the Global Business Services and Corporate Citizenship.
The various organizations related to the field of business take the help of globalization for the enhancement of the prospects of their business (Charles Jr, Schmidheiny and Watts 2017). The competitive world of contemporary business has made it important for the business organizations to take the help of this particular method not only “reach out to a larger number of customers but also for the process of finding a platform where they can sell the surplus amount of goods and services manufactured by them” (Charles Jr, Schmidheiny and Watts 2017). In other words, it can be said that the process of globalization is utilized by organizations of the present times “to bring about the overall growth as well as the development of their overall business process” (Rausch, Sheta and Ayesh 2013). It is “important to note that in the contemporary business world” just following the process of globalization is not enough the concerned business houses need to take the help of various kinds of effective as well as innovative strategies in order to sustain themselves in the foreign nation (Rausch, Sheta and Ayesh 2013). It is often seen that the various business houses which following the process of globalization had expanded in the other counties of the world find it very difficult to sustain themselves in the host nation “on the score of the differences in the social as well as the cultural backgrounds of the two nations” (Dubois, Copus and Hedström 2012). Many scholars are of the opinion that the role played by the various strategies adopted by the concerned business house for the process of their business operations in the host nation is very important as the success or the failure of the concerned organization depends on the kind of strategies which it is following in the host nation for the process of their business (Dubois, Copus and Hedström 2012). This report will give an overview of the concept of globalization and its related aspects. The report will discuss about the concept of globalization with the help of the Indian business organization “Tata Steel Limited”.
The organization “Tata Steel Limited” founded by Jamsetji Tata in 1907 was formerly called by the name of “Tata Iron and Steel Company Limited (TISCO)” (Tatasteel.com. 2018). The organization under discussion here is “not only one of the largest business organizations of the nation of India but also of the world” (Wirtz, Tuzovic and Ehret 2015). The organization under discussion here is an “Indian multinational steel-making company” based in the city of Mumbai of the nation of India (Tatasteel.com. 2018). It is “significant to note that although the organization under discussion here was initially founded by Jamsetji Tata” in the nation of India however within a very short time the organization following the process of globalization expanded in the other nations of the world “in order to further enhance the prospects of the business” (Wirtz, Tuzovic and Ehret 2015). It is a reflection of this particular fact that the organization under discussion here is currently operational in 26 different nations of the world including some of the top nations of the world like “Australia, China, India, the Netherlands, Singapore, Thailand and the United Kingdom” (Tatasteel.com. 2018). In addition to these, the organization is one of the largest private recruiters in the nation of India and it currently has a workforce of more than “80,500 people from different parts of the world” (Tatasteel.com. 2018). The major products offered by the concerned organization are steel, wire products, flat steel, plates and other related steel products (Wirtz, Tuzovic and Ehret 2015). Furthermore, in the recent times in order to expand its business in the other nations of the world is following the policy of “merger and acquisition” (Wirtz, Tuzovic and Ehret 2015). It is with the help of this particular policy that the organization under discussion here has been able to own some of the largest steel manufacturing organizations of the world like Corus (2007), Millennium Steel (2005), NatSteel (2004), “Rolling mill companies in Vietnam in 2007” and others (Tatasteel.com. 2018). The annual revenue organization for the year 2017 was “$7.5 Billion and is the 1076th largest business organization of the world in terms of the revenue which it generates” (Forbes.com. 2018). The below given figure gives an overview of the company
Reasons for globalization
The concept of globalization has been in practice since the traditional times and therefore the ancient civilizations of the world used to take the help of this particular to develop effective trade relations with the other civilizations of the world (Rossi, Vrontis and Thrassou 2012). However, “the concept of globalization in the true sense of the term gained in prominence within the specific context of the business world in the 19th century” (Rossi, Vrontis and Thrassou 2012). The 19th century saw the introduction of the telegraphic system which improved the communication process used by the different people as well as the business organizations in a significant manner (Ietto-Gillies, Cox and Clegg 2013). Furthermore, this was also the century which saw the introduction of the steamboats that further improved the transport system of the world in a significant manner (Ietto-Gillies, Cox and Clegg 2013). It is significant to note that the communication as well as transport forms one of the basic requirements of the business world. Many scholars are of the opinion that the rise of the steamboats as well as the telegraphic system “played a significant role in the Industrial Revolution which the world experienced in this particular century” (Dwivedi, Ghosh and Dangayach 2013). It is interesting to note that many scholars of the opinion that the Industrial Revolution significantly transformed the landscape of the business world in the 19th century (Dwivedi, Ghosh and Dangayach 2013).
The concept of globalization in the general sense of the term is the process by means of which the various organizations of the contemporary times develop international relations or expand their business in the other nations of the world (Rossi, Vrontis and Thrassou 2012). Many scholars are of the opinion that the “globalization is the trend of increasing interaction between people or companies on a worldwide scale due to advances in transportation and communication technology, nominally beginning with the steamship and the telegraph in the early to mid-1800s” (Ietto-Gillies, Cox and Clegg 2013). Therefore, it is seen that with the enhanced interactions with the other nations of the world the process of increased amount of trade, commerce as well as culture also entailed. Many people of the opinion that cultural factors play a significant role in the business process of a particular business organization while they are trying to follow the process of globalization or internationalization (Dwivedi, Ghosh and Dangayach 2013). It is “a reflection of this particular that the various business organizations need to take this particular factor into special consideration for the process of their business” in the other nations of the world. The scholar Thomas Larsson in his famous book “The Race to the Top: The Real Story of Globalization” says that “globalization is the process of world shrinkage, of distances getting shorter, things moving closer. It pertains to the increasing ease with which somebody on one side of the world can interact, to mutual benefit, with somebody on the other side of the world”. In other words it can be said that the process of globalization has made the world much smaller where the entities from the different parts of the world can have effective trade relations with each other irrespective of the nation to which they belongs (Dwivedi, Ghosh and Dangayach 2013).
Challenges faced by business organizations during globalization
The process of globalization entails with itself various kinds of benefits and it is precisely these benefits which motivate the various business organizations to follow the “path of globalization” which has become the norm of the contemporary business world in the recent times (Srivastava et al. 2015). Many scholars are of the opinion that the primary reason which motivates the various business organizations to opt for this particular process is to have an enhanced customer base (Charles Jr, Schmidheiny and Watts 2017). It is significant to note that “in the present times it is seen that due to the technological advancement of the world and also the various innovations” the facilities which are available to the various business has increased in a significant manner and therefore it is seen that amount of products as well as services manufactured by various business organizations has increased considerably (Srivastava et al. 2015). Thus, it can be said that the process of globalization provides the various business organizations with a market area where these business organizations can sell the surplus products as well as services manufactured (Charles Jr, Schmidheiny and Watts 2017). For example the organization “Tata Steel Limited” had an annual productivity of more than “27.5 million tonnes (in FY17) of crude steel products” for the year 2017” thereby making it the 2nd largest steel manufacturing organization of the nation of India (Tatasteel.com. 2018). It is significant to note that the nation of India is a developing one and therefore it would be apt to say that the organization will not find adequate market for the surplus products manufactured by it in the nation of India (Rausch, Sheta and Ayesh 2013). This is one of the primary reasons for the expansion policy which the organization had been following in the recent times. The second benefit which the process of globalization provides to the various business organizations of the world is that it allows the business organizations expanding into the other nations of the world to use the technological advancements of the nation into which they are expanding (Hoffmann and Kumar 2013). The nation of India in which the organization “Tata Steel Limited” is located is a developing nation with a slow rate of technological growth (Hoffmann and Kumar 2013). Therefore, it can be said that the expansion of this particular organization into the developed countries of United Kingdom, Netherland, Australia and others will enable the organization to utilize the technological resources of these nations and this particular “factor is likely to further enhance the prospects of the organization in a significant manner” (Hoffmann and Kumar 2013). Another significant reason for which the various organizations undertake “the process of globalization is the factor of better trade facilities which the various organizations get by following the path of globalization”(Cavusgil et al. 2014). The various precepts of “New Trade Theory” are important to note in this particular context. It is significant to note that the various business organizations are no longer content to have trade relations in one particular nation of the world and it is a reflection of this particular fact that the concept of globalization has gained prominence in the recent times (Cavusgil et al. 2014).
Strategies to sustain in host nations
Strategies have emerged as “one of the most important aspects of the business organizations in the present times and the prospects of a particular business organization” depends on the king of strategies which a particular organization follows for the process of their business (Dwivedi, Ghosh and Dangayach 2013). However, it is generally seen that whereas effective strategies can “lead to the overall growth as well as the development of concerned business organization or the company whereas ineffective or mistimed strategies can hamper the prospects of the concerned organization in a significant manner” (Dwivedi, Ghosh and Dangayach 2013). The organization “Tata Steel Limited” also “takes the help of various kinds of effective as well as innovative strategies for the process of their business in the other nations of the world” (Srivastava et al. 2015). The primary strategy which this particular organization has followed in the recent times to mitigate the high level of rivalry or competition faced by them in the international business world is the strategy of “merger and acquisition” (Srivastava et al. 2015). The organization using this particular policy has acquired some of the largest steel manufacturing organizations of the world like Corus (2007), Millennium Steel (2005), NatSteel (2004), “Rolling mill companies in Vietnam in 2007” and others (Srivastava et al. 2015). Another important strategy which the organization follows “for the process of their business in the other nations of the world is the strategy of cost leadership”(Paul and Mukherjee 2016). It is significant to note that the organization “under discussion here takes the help of this particular strategy” to provide high quality products to the “customers from the different parts of the world” at very affordable prices (Paul and Mukherjee 2016). The strategy of product differentiation is also being followed by the organization “Tata Steel Limited” for the purpose of providing high quality products to the customers which are different from the ones provided by the other business organizations operational in the same field of business (Kumar 2015). In addition to these, the focus of the organization is on the process of innovation as well as creativity for the process of their business (Ietto-Gillies, Cox and Clegg 2013). The organization under discussion here takes the help of not only the strategies of “Porter’s Value Chain” for the manufacture of their products but also takes the help of the “Innovative Value Chain” for the purpose of producing superior quality products which would enable the organization to mitigate the high level of competition faced by them in the international business market (Ietto-Gillies, Cox and Clegg 2013).
Tata Steel Limited: An Overview
The organization under discussion here just the other major organizations of the world which follow the process of internationalization or globalization faces a “number of problems by lieu of their business activities in the different nations of the world”(Ietto-Gillies, Cox and Clegg 2013). The primary challenge which the organization “Tata Steel Limited” “faces by lieu of their business operations in the other nations of the world” is the factor of cultural differences (Rossi, Vrontis and Thrassou 2012). The culture of the nation of India is very different from the ones in which the organization “Tata Steel Limited” operates in the international arena like United Kingdom, Australia, Netherlands and others (Rossi, Vrontis and Thrassou 2012). Many scholars of the opinion that the factor of culture determines to a large extend the way business is being conducted in the different nations of the world (Dwivedi, Ghosh and Dangayach 2013). Thus, the business world of the nation of United Kingdom is drastically different from the business style of the nation of India. Another important factor which affects the international operations of the business organization under discussion here is the problem of staffing (Dwivedi, Ghosh and Dangayach 2013). It is significant to note that the “factor of international staffing has emerged as one of the most important challenges which the various organizations” face in their international business operations (Dwivedi, Ghosh and Dangayach 2013). It is a reflection of this particular fact that the various organizations in the present times opt for the various kinds of staffing methods like polycentric, ethnocentric and geocentric methods of staffing (Rausch, Sheta and Ayesh 2013). The organization “Tata Steel Limited” follows the method of polycentric staffing for the purpose of staffing in their international business centers (Rausch, Sheta and Ayesh 2013). Another significant challenge which the various business organizations face on the score of their international business operations is the factor of management of these centers (Rausch, Sheta and Ayesh 2013). It is often seen that the “various business organizations” fail to effectively manage the diverse business centers which they have in the foreign nations.
The organization “Tata Steel Limited” can take the help of various kinds of strategies for the mitigation of the challenges which it is facing in its international business centers. The organization first of all to mitigate the effect of the cultural factor can “take into effective consideration the cultural requirements of the nation” as well as the style of co ducting business in that particular nation in the most effective manner in order to enhance the prospects of their business in that particular nation. Secondly, for the purpose of the staffing in their offshore locations the organization can take the help of the geocentric method of international staffing which believes in providing the important managerial positions of the organization to the individuals who are the most worthy of it. For the effective management of these offshore centers the organization can take the help of various kinds of regional managers and set up regulatory management committees for the periodical assessment of the performance of the different entities related to the organization.
Corporate Citizenship
Conclusion
The “advent of globalization has much transformed the way the various business organizations conduct their business in the contemporary business world. It is a reflection of this particular that most of the business organizations of the present” follow this particular process “to bring about the overall growth as well as the development of their business organizations or companies”. The process of globalization entails with it various kinds of benefits of benefits like enhanced customer base, the opportunity to earn more amount of profit, the opportunity to utilize the technological developments of the nations in which a particular business organization is operational and various others. However, there are certain negative aspects associated with the process of globalization as well, namely, the cultural factor which the different business organizations need to take into consideration, the staffing problem, effective management problems and others. It would be apt to say that the process of globalization has both negative as well as positive aspects however the benefits of this particular process far outweigh the negative aspects of the same. Therefore, it is seen that the various business organizations of the world like “Tata Steel Limited” are increasingly taking the help of this particular concept to improve the prospects of their business.
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