1

Objectives of the Presentation :

to identify different aspects of globalization the meaning and importance of competitiveness to discuss historical evolution of globalization of business identify important conditions that managers must consider in the globalization of their actions A survey of global environment for organizations and Managers

Outcome of the Presentation

meaning of globalization and the related idea of competitiveness

the central role of government in global business

modern history of the global business

PEST factors that global managers must take in to account in globalization
A survey of global environment for organizations and Managers

Globalization
The process by which different parts of the world interact economically, politically, and culturally wiki

Globalisation

Globalisation could involve all these things! Reference : http://bized.co.uk

World in the 20th century practiced against a backdrop of rapid change and profound re-thinking on how the management And organizations would evolve in the next century. This re-thinking was about relationships and time. Boundaries between cultures and nations became blurred and new communication technology made them possible to think of the world as a Global Village.
From Chapter 2

Managers facing the 21st century thought of themselves as global citizens. The scope of the international and intercultural relationship is still rapidly expanding. The pace of organizational activity picks up dramatically.
Kenichi Ohmae described a borderless world where managers treat all customers as equidistant from the organization.
From Chapter 2

Globalization
The recognition by organizations that the business has a global, not local focus. Globalization refers to the unprecedented scope, shape, number, and complexity of business relationships conducted across International boundaries. Globalization is one of the most important changes to the external environment of most businesses.

What is Globalization of a Business ?

Proximity - location - attitude / new perspective
-

Unprecedented lineup and complexity of interrelated factors of

that confront a global manager

10

Factors of Globalization
proximity

attitude

location

Global Manager

11

Proximity
Benefits Challenges Implications

12

Location
Benefits Challenges Implications

13

Attitude
Benefits Challenges Implications

14

Globalization of business, in three aspects, has been accompanied by a prominent new concern competitiveness

proximity
attitude
competitiveness

location

15

Globalization and Competitiveness

competitiveness : Relative standing of one competitor against other competitors.
Competitiveness is a part of new attitude of globalization and a direct consequence of the unprecedented proximity among nations in the global market place.

16

Examples : American automakers General Motors, Ford and Chrysler worried about their organizational relative standing in the US automobile marketplace Merchants in small towns across US thought about the competitiveness of their prices with respect to prices at Wal-Mart stores in their towns.

coca cola Vs Elephant beverages

world cup cricket match ups and downs in the stock market

17

Global Leadership Programme (G.L.P.) :

General Electric Medical System Group addressed its desire to remain competitive in the global economy to expand its ability to deliver quality products in a highly competitive industry by developing GLP to provide its to managers with a global look. GLP - multiyear process that bring managers together from its three Regions America, Europe and Asia within a highly organized framework to work on specific business projects. The results of these projects drive the global progress of the organization.

18

Contest among nations :

Competitiveness has become a prominent business and government concern in the era of global business making contests among nations.
Members of the new media routinely focused on the competitiveness of the US verus Japan and US vs. Pacific rim. Eg. Sumitomo fire in terms of Japanese computer industrys influence on world Markets

19

20

News media Managers Government officials

competitiveness

21

Globalization Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world. Challengers due to Globalization 1. Improvement of International Trade. Because of globalization, the number of countries where products can be sold or purchased has increased dramatically.

2. Technological Progress. Because of the need to compete and be competitive globally, governments have upgraded their level of technology.

3. Increasing Influence of Multinational Companies. A company that has subsidiaries in various countries is called a multinational. Often, the head office is found in the country where the company was established. An example is a car company whose head office is based in Japan. This company has branches in different countries. While the head office controls the subsidiaries, the subsidiaries decide on production. The subsidiaries are tasked to increase the production and profits. They are able to do it because they have already penetrated the local markets. The rise of multinational corporations began after World War II. Large companies refer to the countries where their subsidiaries reside as host countries. Globalization has a lot to do with the rise of multinational corporations. 4. Power of the WTO, IMF, and WB. According to experts, another effect of globalization is the strengthening power and influence of international institutions such as the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (WB).

5. Greater Mobility of Human Resources across Countries. Globalization allows countries to source their manpower in countries with cheap labor. For instance, the manpower shortages in Taiwan, South Korea, and Malaysia provide opportunities for labor exporting countries such as the Philippines to bring their human resources to those countries for employment.

6. Greater Outsourcing of Business Processes to Other Countries. China, India, and the Philippines are tremendously benefiting from this trend of global business outsourcing. Global companies in the US and Europe take advantage of the cheaper labor and highly-skilled workers that countries like India and the Philippines can offer

7. Civil Society. An important trend in globalization is the increasing influence and broadening scope of the global civil society. Civil society often refers to NGOs (nongovernment organizations). There are institutions in a country that are established and run by citizens. The family, being an institution, is part of the society. In globalization, global civil society refers to organizations that advocate certain issue or cause. There are NGOs that support women's rights and there are those that promote environment preservation. These organizations don't work to counter government policies, but rather to establish policies that are beneficial to all. Both the government and NGOs have the same goal of serving the people. The spread of globalization led to greater influence of NGOs especially in areas of great concern like human rights, the environment, children, and workers. Together with the growing influence of NGOs is the increasing power of multinational corporations. If the trend continues, globalization will pave the way for the realization of the full potential of these two important global actors.

Advances in technology Constant and continuous development of the technology.

27

28

Michael Porter, a renowned expert on competition, has observed that

29
Mobile phone in the shape of flying source for the future

30

Relative standing today, looking forward

Relative standing today, from the past to today

31

How do Governments Influence Competitiveness ?

32

Changing the International Scene

Coming of the European Community Economic experiments in the peoples republic of China After the Soviet union North American free trade agreement

Recap about government influence

33

Modern history of globalization

The aftermath of world war II

Role of multinational enterprise (MNE) impact of MNES on host countries impact of MNEs on home countries

34

Global business practices