Impact Of Management In The Globalization Of Business

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Impact Of Management In The Globalization Of Business

The impact of management in globalization can be seen in areas like economics, social culture, and politics. Management is defined as the process of accomplishing the goals of the firm by using efforts of others. It is the principal tool through which objectives are attained. On the other hand, globalization refers to the comprehensive integration of multicultural considerations, perspectives, products, lifestyle, and technologies (Javidan et al., 2006). It has resulted in large-scale interdependence between countries and has allowed standardization of products to meet the needs of customers from different nations.  This paper focuses on how management impacts globalization of business.

A global business may be affected by the managerial culture of a given company. Gregersen, Morrison,  and Black (1998) report that when a company wants to go global, it must consider training its managers on how to work in a multicultural setting. Strong corporate culture must be developed which encourages employees to enjoy working in a multicultural environment. Moreover, the firm needs to employ a diverse workforce. The implication here is that a diverse staff comprise of people from different cultural norms, languages as well as social backgrounds. A firm's management must, therefore, recognize the value of employing persons who can meet the needs of customers from different cultures, languages, and social status.

The management also uses local staff to provide local solutions because such people comprehend local needs. A good example is Nokia. For many years Nokia has used its local designers to produce country-specific handset mobile phones. As such, models designed for Indians are resistant to dust and have an in-built flashlight. Besides, those designed for the Chinese are characterized by touch screens, stylus, and have character recognition for the Chinese. Designers at the headquarters are less sensitive to the needs of local people as compared to local designers. Local designers are used by the management because they are in a better position of understanding the needs of the local population.

Moreover, the management also recognizes that the level of talent and supply of managerial skilled and unskilled labor differs from one country to another. For this reason, corporations must not presume that countries in evolving markets offer inferior pools of labor. For instance, GM reported that 50 percent of its assembly-line staff in India attained college degrees- a ratio much greater than in other countries. Therefore, labor from emerging markets must be accorded the same preference as those from developed markets. This way, the management will encourage globalization in new markets.


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The management also recognizes the need to manage the laws across jurisdictions. In the United States, for example, the federal government has set out several tax and labor laws that businesses in operation must comply with. Furthermore, there are local and regional laws that relate to businesses that operate in different states or diverse countries. Selling products in the US, for instance, might imply that the company must comply with the tax laws in the US such as imposing taxation on its goods. Recruiting employees at branch locations in diverse regions might alter minimum wage, tax allowance, and working hours’ requirements (Wolf, 2014). The management of global business has found it necessary to understand these laws since any breach of them may threaten the financial well-being and reputation of the firm.  

The other impact of management on business globalization is the need to transfer knowledge and information. Information is considered the most costly and valuable factor of production. Additionally, information is transferred and exchanged easily from one country to another. Managers of current companies are very flexible when it comes to using knowledge and information implying that they can easily adapt to globalization. Besides, global markets also experience quick technology transfer. Wolf (2014) suggests that the rapid change experienced in the global markets requires the quick transfer of knowledge and effective utilization of these two components. Therefore, globalization can be a great success if the management learns the art of the effective use of available knowledge and information.

Another impact of management on the globalization of business is effective technology management and effective research and development management. According to Gomez-Mejia, David, and Robert (2008), most global managers have realized the importance of using new technologies by innovative and globally oriented firms to explore new opportunities for business. They have incorporated the internet and e-commerce techniques to boost their participation in new international markets. Moreover, managers apply technology as a competitive advantage and to enhance the quality of goods and services. The latest technology must be employed to increase the sales and product quality. Proper management of this quick technological advancement and transfer plays a significant role in globalizing a business. Besides, current firms invest a lot in research and development. Efficient R&D management also increases the rate at which a company becomes globalized.

Competition is the last impact of management on the globalization of business. Current managers have come up with ways of being more competitive in the global market (Hollenbeck and McCall, 2003). International trade invites a lot of challenges, and the managers must remain competitive by offering products and services meeting the preferences of customers such as quality products and low prices. Other aspects which are expected by customers are a quick response, quick production, and technological adoption. A company can only increase its market share if it can produce at a low cost and sell at a low price. Customers' preferences of desiring to acquire goods and services with speed and more efficiently than before, must be met by sound management of the firm's operations. Managers must be ready for the price, product, and service and customer inclinations since all of these are requirements in the global market.

In conclusion, management plays many significant roles in the globalization of business. Management involves accomplishing the goals of the firm by using efforts of others while globalization entails the global integration of multi-cultural considerations, perspectives, products, lifestyle, and technologies. The management aspects which impact globalization of business include multicultural corporate culture, use of local staff to solve domestic problems, employing a diverse workforce, efficient technology and research and development management. Other important aspects of management impacting globalization of business are technological adoption and flexibility to change.