Technology and Competition in Globalization
Discuss about the Globalization and Freedom of Association.
The current state of the world calls for diversity when dealing in business whether internationally or not (El Namaki 2017, p. 89). Globalization is not a new term in the field of business and it has been there for centuries. It is only experiencing a number of revolutions from that is advancement in technology. This factor has influenced the integration of countries and continents to the extent of doing business together and having them managed from a fur off place away from the nation. Globalization provides both positive and negative effect to the business.
The business maybe affected positively in terms of technology (Santos Salazar & de Moraes 2017). Technology implies the extent to which the company relies on computers and other machineries to influence its productivity and distribution of services positively. Competition is also a factor of globalization that may positively or negatively influence the firm in terms of productivity and customer retention as will be discussed below.
The rising challenges that is associated with globalization calls for the international executives or managers to be equipped with a number of techniques in order to ensure that those firms remain at the top in the global business (Clavel San Emeterio, Fernández-Ortiz, Arteaga-Ortiz, & Dorta-González 2017). In line with the necessities of a manager to remain at the top include making a thorough research on the market, gaining the knowledge about the various cultures to avoid controversies and also measuring the performance index of the firm to gauge whether it will yield success in the future among others as will be discussed later.
Clavel San et al. (2017) in their research, also tries to bring out the link between outsourcing &offshoring and how it has influenced globalization through creation of opportunities to international businesses such as Siemens company and also the challenges/ problems associated with it. The essence of this research as will be elaborated is to provide the necessary conditions that can facilitate a firm to act favorably in the global arena and be able to remain ahead of the game. It also shows how the integration of global culture can foster the success of the company.
The term globalization has become a common word in our daily life. In relation to business, globalization represents the integration and fabrication of international trade globally (Bartsch, Riefler, & Diamantopoulo 2016, p. 34). The diversification of investments, information technology, and integration of cultures as increasing as a result of globalization in many business aspects. The designed policies to create link between economies of different nations thus boosting development in poor countries and which leads to generation of international market which benefits multicultural firms. The introduction of globalization in this contemporary world has led to a number of impacts on businesses around the world.
Challenges Faced by International Executives in Globalization
Firstly, looking at competition, there has been an increased rate of competition between companies and firms (Engsing 2017, p. 89). The competition ranges from product and service delivery. In terms of the prizing of commodity, the targeted market niche, technological adaptation and time taken to respond to customer requests and quick production of goods. The presence of competition has forced firms both local and international businesses to upgrade their standards so as to suit consumers’ needs which stands to be beneficial to many people all over.
despite the fact that globalization has led to competition of firms which has positively affected the productivity of goods and services to a standard level, it is also important to note that competition has also resulted in to negative and diverse activities globally (Peters, Riley, Siedschlag, Vahter, & McQuinn 2018, p. 7). The production of generic goods and services by competing firms may end up affecting the health of consumers; for instance, the production of plastic rise that may cause cancer to people.
Globalization has forced firms that operate internationally to exchange technology and adapt to more efficient and reliable once (Peters et al. 2018, p. 4). Firms that are oriented focus on exploiting new business opportunities through the use of e-commerce. Being one of the main equipment of competition in the market, globalization has enable firms to struggle to acquire latest technology in order to increase their sales and quality/ quantity of their production.
Globalization has facilitated the expansion and the rate of technological transfer and its improvement all over the world with the aim of giving ease to the provision of services and goods to clients. Talk of electronic commerce such as amazon which is an online platform where people all over the world can access goods and services at their conveniences. due to globalization, the demands and expectations of customers are the ones influencing the direction of the markets. This calls for firms that invest so much on capital to adapt to the expectations of the clients.
The second impact of globalization on business today is the transfer of knowledge and information across nations that participate in the international business. The current business arena makes it difficult and expensive/ worthwhile to get relevant information concerning production factors. Ease of exchanging information from one nation to another has rapidly increased. The random change in the global market has necessitated transfer of knowledge from nation. In this context, knowledge refers to skills, abilities and know how of he stocks of competence. Thus, many firms can now operate and produce world class goods and services as pointed out by Bojnec and Ferto (2018, p. 89)
Outsourcing and Offshoring in Globalization
Taking for example the siemens company that operates in more than 190 nations across continents, it has got more than 400,000 stocks of competence from different races and nations. The presence of globalization has influenced the job market (Li, Yi, & Cui 2017, p. 83). Access to talented employees who facilitate the productivity of the firm. Individuals from various countries are provided with jobs. This bring about the concept of outsourcing and offshoring. Taking a job out of the country to be done in another foreign nation. This has positively impacted on the business today.
On the contrary, globalization has also affected businesses adversely. Beginning with price fluctuation. Increased price fluctuation across the globe has been the norm of the day. The presence of stiff competition organization in third world and second world nations are forced to lower the prices of their product. For instance, goods and services produces in China and japan are less costly than other nations this intern force other firms in globally to reduce their prices so as to compete favorably in the market and capture the loyalty of their clients with this, the ability to provide for social welfare become difficult (Li, Yi, & Cui 2017, p. 83).
Secondly, globalization has also presented job insecurity in businesses. There is continuous outsourcing practices raise an alarming risk of locals of a particular nation to lose their employment in various firms as pointed out by Carolina Zonta & Amal (2018, p. 64). This is more common especially in developing nations that desire firms to produce products at a more affordable price thus necessitates outsourcing. This intern leads to job insecurity for instance jobs such as software programming among others are outsourced to developing countries thus making individuals with same kind of professionalism to lose their job. The ability to compete favorably and remain successful as a manager in global market calls for a lot of patience and keenness. This international manager can do a number of things according to various researchers in order to stay ahead of the game (Oladimeji, Ebodaghe, & Shobayo 2017, p. 56). Deeping yourself into the unknown global world can be very dangerous and may cause loss to your firm. As an international manager, it is rudimentary to understand the different cultures that exist between the nations of which your firm is involved in business.
The manager needs maintain a leading executive on his team who is well versed with the culture of the surrounding so that you may not end up clashing with the culture of the locals. The presence of an executive with worldly experience will influence and help the company to put first the global market and find solutions for the unknowns. This can be incorporated through researching and tying to understand the various cultures that they may be involved in thus creating room to remain successful through getting the best clients of your products (Hilmersson, Johanson, Lundberg, & Papaioannou 2017, p. 78). This will help the manager to be able to adopt an outside perspective of how to run the firm without incurring loss. The benefit of conducting a market research is that helps in the identification of the robustly growing market product.
Positive and Negative Effects of Globalization on Businesses
For an international executive to stay ahead of the game, they must aware of and have the ability to select the right international partners and do research on the market to find the best niche (Zhang, Yu, Yu, & Jin 2017, p. 2834). Having a trustworthy and loyal partner in a different country is essential for growing your company so as to attract and retain customers absence of this knowledge for a manager may make it a tall order to spearhead the market. Knowledge of the right business practice and sending out executives on the ground to get information about the goods and services is quite vital. Carrying out business without doing a good research on the market and finding a niche may be suicidal for the company. In order to stay at the top, the leader needs consider this aspect. Before finding a business partner from other nations, Zhang et al. (2017) denotes that it is important to set up clear expectations of what you plan to achieve when involved in the international business. Having this in mind will enable the executive to stay in touch with the goals and be able to tap the right niche and stay ahead in competition.
Staying ahead of the business globally also calls for an executive to be fully informed of the success measure and have the ability to think globally (Oladimeji, Ebodaghe, & Shobayo 2017, p. 56). Working internationally requires more than just capital but a measure of understanding about your business. The manger must have records that track the success of the company according to Albert Subbloie. For success to be the norm of the organization, it is mandatory that the organization must be able to act fast the need to evaluate the current strategies in order to innovatively come up with new ways of doing business (Hilmersson, Johanson, Lundberg, & Papaioannou 2017, p. 72). This is facilitated with the ability to think outside the box and act globally. Thinking globally actually implies upgrading he standards of your company to that of world class. Keeping the success measure of the company also involves finding out the type of data that can be used to predict or deduce how the product you wish to engage in will be sold on the chosen location.
Even though there are several advantages that a company can enjoy as a result of globalization, an international leader needs to be aware of a number of things in order to stay ahead of the game globally such as conducting thorough market research so as to find a niche, thinking globally, finding the rightful partners who can connect them with the best customers, maintaining professionalism and keeping in touch with the customers. All this is fabricated by knowing the culture of your customers to avoid controversies.
Many companies remain at the top because of incorporating global way of thinking into their organizations which is further fabricated with the culture of the firm. A good international manager needs to ensure that the major thought process driving the firm’s decision is thinking globally. This acts as an eye opener to impending opportunities in the international business. This furthermore reduces the difficulty of implementing other global marketing strategies.
It is also necessary for an executive to have after sell services to his clients which will distinguish him from the other competitors (Vadlamannati 2016, p. 6). The relationship between your firm and your clients in other countries should not be terminated after delivery of products. In this case, you need to create a lasting relationship by keeping in touch with them. This can be achieved through maintaining personal contacts with the new target. In the knowledge of culture specificity in order to reduce issues that may come up due to controversies to enhance professionalism and consistency. This should be at the tip of the managers fingers so as to remain successful.
Talking of outsourcing and offshoring, outsourcing simply means taking an internal operation to another person or party (Vadlamannati 2016, p. 6). Technically it involves taking jobs from one country to be done in another country due to cheap labor or move transactional activities to the experts who are based in another country so as to focus on the extend of expertise. This idea of taking out services and jobs has developed over the years and has influenced the emergence of global market.
Despite the fact that outsourcing and offshoring has opened room to globalization, it has also presented a number of challenges and problems in the business arena (Huo & Ouyang 2018, p. 801). Firstly, too much outsourcing raises the risks of a business fail. Provision of services from those taking the contract may be underquoted with the intentions of getting the contract and abruptly be raised when the contract is in the middle. This may bring about falling out of firms in the market due to lack of capitals to sustain the contract. This has been facilitated by the fact that most organizations outsource what is not important and fails to pay attention on what is important. According to research done on dell computer company, the firm nearly ran out of business due to outsourcing of expertise which raised complains from the consumers which led to drop in additional sales.
The four major challenges that arises due to outsourcing include unavailability for instance, outsourcing firms which offers services such as tutorials may not be readily available thus leading to inconvenience of the firm which may result to running out of business (Hilmersson, Johanson, Lundberg, & Papaioannou 2017, p. 72). The absence of professional level management in planning has also been an issue due to outsourcing and offshoring this may in turn make it difficult to select the right person or organization to provide services. Outsourcing also raises the challenge of data security resulting to cybercrimes. The data may be breeched and thus fall in the hands of the wrong organizations who may use it to harm the firm. There may be issues to do with privacy concern.
Despite the risks of outsourcing mentioned above, they also present opportunities. From a survey by Duke university on offshore outsourcing on Price Waterhouse Coopers, it has created increased demand of services that rapidly increase the investments in other new forms of services which meet the rising demand. It enhanced cost saving and efficiency due to the easy access to qualified and talented stocks of competence who provide services that are standard. According to the survey, it was discovered that outsourcing served to make companies more flexible and equipped to tackle the arising challenges in the process of business interactions and activities.
Outsourcing also led to increased use of technology in business which facilitated quick communication between clients and the services/ products providers. This is majorly in the field of logistics, human resource services and stock distribution.
Conclusion
Globalization has been influenced by outsourcing and offshoring which has led to both positive and negative impacts on the business arena. Talking of positive impacts of globalization include; increased competition which has influenced many firms to upgrade their services and products in order to capture the loyalty of their customers this intern becomes advantageous to the consumer who enjoys high quality services. It has also enhanced technological development in the business area the desire to be at the forefront in the global business has enhanced firms to acquire technologies that eases their work.
Despite all these advantages, an international leader needs to be aware of a number of things in order to stay ahead of the game globally such as conducting thorough market research so as to find a niche, thinking globally, finding the rightful partners who can connect them with the best customers, maintaining professionalism and keeping in touch with the customers. All this is fabricated by knowing the culture of your customers to avoid controversies.
List of References
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