Effect of globalization in management of an organization, Strategic Management

The following essay will discuss how the popular trend of globalization is affecting the communication style and management of an organization. There will be explanations provided in regards to what is globalization and how it came out, and further to how it indirectly and directly affected the ways that business organizations operate, whether or not they are trading in an international level.

Globalization has been an increasingly popular trend amongst businesses, where businesses are selling and purchasing from companies overseas. Globalization is not limited to trading with other overseas businesses, but also setting up offices overseas and engaging in the overseas market. Modern day technology, such as airplanes and internet has created many opportunities for businesses to setup a branch overseas. Since businesses seek more opportunities overseas it is also necessary for them to adapt their management and communication styles in order to fit into the overseas market, and in order for the mother company to be able to control, review and maintain overseas companies (Karl & Lewis, 2009).

In order to adopt the concept of globalization, it is necessary to firstly understand the culture of the targeted country, buyers' behavior and all other relevant information that is required to start a business. In order to gain full knowledge of the overseas market, it is necessary to hire local residents to participate as a human resource. This will directly influence the management styles of an organization, for example incentives and the hierarchy system will need to be adjusted between the mothers companies located in New Zealand, as opposed to the subsidiary company located in China. Furthermore to adjusting the surface management styles of the business, it is also necessary for the business to adjust management styles within the company, by changing the company norm and culture. Previously, it is common for businesses to only hire employees that are located in their country; however after the popularity of globalization organizations will have to adjust their culture, where they will have to accept employees from a different cultural background. Not only does this involve hiring them, but it also involves in understanding their culture, and learning their beliefs, so the business will be able to expand to the employees' country in the future (Warwick, 2006).

As mentioned previously it is important for businesses to adapt new forms of management and communication style in order to keep up to pace with globalization, however according to Saee (2007) in order to operate an international business successfully, it is necessary for an organization to understand the values and have intercultural awareness. A successful marketing plan in one country does not necessary imply that it will be equally successful in another country. Hence, this implies that a particular management style to manage employees in one country might not be as effective in another country. For example, New Zealand employees are much more relaxed, and  will benefit the business by using their own initiative, and monetary awards does not necessary have to be used as an incentive, verbal recognition will be just as important. Conversely in China, employees are extremely target different, where it is necessary for businesses to set targets and provide monetary incentives.

Furthermore, communication is also different and needs to be changed when globalization emerges within a company, because communicating with employees, customers and suppliers are extremely crucial. For example, certain gestures and words in the Western culture can be considered as friendly and polite, however when heard by the Eastern culture it can often be offensive and inappropriate. Therefore it is necessary for businesses to adjust their communicate styles when facing different stakeholders from overseas. Similar to management styles it is necessary for the organization to understand the difference in cultural background.

The article by Saee (2007) states clearly that it is necessary for businesses to have intercultural awareness in order to be successful. This concept and idea is originated from globalization, without globalization it is unnecessary for businesses and individuals to change or adapt the way they manage, because businesses setup in the local market will always have a deep understand of the cultural background, and customers' liking. With the advance technology, especially the introduction of the internet, globalization will be increasingly popular, where businesses and trade with one another through the internet, therefore it is necessary not only to understand the cultural background of stakeholders, but also adapt the management style within the local mother company to allow the organization to maximize profit from this global opportunity. For example, businesses should search for products from overseas countries in order to obtain the lowest priced supplier, and hence increase profit margins.

In conclusion, not everyone agrees with globalization, because it causes many organizations and individual to change and adapt to the new business environment. However globalization has created many opportunities for businesses, and opened up many minds for individuals, where shoppers are not only limited to purchase things produced by their own country, it has also promoted specialization.

Posted Date: 2/22/2013 6:13:47 AM | Location : United States

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