Globalization in World Business.

Filed under: Letters |

world business dialogue

Globalization has its root in global marketing, global marketing strategy for some people, such as McDonald, and FedEx, means to plan to sell in all markets all over the world (where the company does business). For others, a global marketing strategy is one that focuses on similarities and uses large scale manufacturing and superior qualities to standardize products and services worldwide (how the company does business). Of late, globalization is taking on a new meaning. After talking about having to be a multinational firm in order to gain a competitive advantage during the 1960’s management turned to the catchword “globalization” in the 1980s, as a strategy for beating their competitors. Overtime, placing production plants all over the world to gain the benefits of lower cost labour and better educated workers.

Managements are removing the barriers within their companies to allow the free flow of ideas and people. For cultural diversity, many are offering top management positions to citizens from countries other than their home country. There is a new name for this type of company and that is multicultural. This is based on two propositions: innovation is the key to success, managers are looking everywhere in the global organization for new ideas, hence, the name multicultural, and technology of communication is making it possible for people from subsidiaries around the world to work together on projects. The aims of the multicultural multinationals are; to be responsive to local markets, to produce and market its products globally, and exploit its technology on a global basis, and elusive objective attained by few companies so far.

A global business is a kind of holding company with a number of overseas operations each of which is left to adapt its products and marketing strategy to what local managers perceive to be unique aspects of their individual markets. Globalization generally is a team used to describe the process that multinational companies employed simultaneously of late, to effect, large changes in the general practices of global business.

Globalization uses rationalization rather than national base to rapidly grow, transform, survive and develop its multinational companies’ operation. Of course through creation of resources centers, at home and using mergers, acquisitions and strategic alliances abroad to create border-less and broader markets. Businesses involve in globalization scheme try to achieve economies of scale through global integration of its functional area while at the same time are highly responsive to different local environments, hence the name multicultural multinational. The process used exploits modern technology (information system, transportation, communication, and machines), economies of scale, severe competition and integrated management strategies to achieve low productions costs, high profit, and economic success in world business. The whole world is the terrain of operation for such companies, these then calls for global market, global technological change and global management.