The Impact of Globalization on Management
If anyone is still arguing whether ‘globalization’ is happening or not, then it is like “arguing against the laws of gravity” (adopted from Annan cited in ThinkExist.com). First of all, ‘globalization’ is not a new phenomenon because it existed long time ago when countries traded with each others centuries ago.
And if it is not new, then, let’s think for a moment what is new or special about globalization that we didn’t have before? Is it openness to the world? The answer is that this openness didn’t just begin recently. Is it the integration whether it is economic, cultural, or political? Perhaps, however, the integration isn’t achieved yet and what is really happening could be a transitional phase.
Then, what is the main difference that wasn’t existed centuries ago. The answer is the revolution or evolution of information and communication technology and mass media. These are the real drivers or enablers of what we call it now ‘globalization’. These drivers maximized the openness and integration between different societies and countries around the globe.
Then, if it is clear that ‘globalization’ is our new reality, what is the impact of this phenomenon on the management field? That’s what this essay tries to discuss. In fact, ‘globalization’ has a double impact on everything and everyone in this world in general and on business management for specific. It created more opportunities and in the same time created more challenges or threats.
Nowadays, with the rapid change in the global economy, “enterprises face a dynamic business environment that requires them to be productive and competitive to survive and grow” (Rhinesmith 3 & Edwards cited in Česynienė 42). And according to Heller, “after the year 2000, companies won’t survive long unless they join a threefold revolution –in management itself, information technology, and the global markets”
So, the main challenge could be the ‘dynamic business environment’ which was enabled by the new information and communication technologies and mass media. This resulted in the necessity of ‘dynamic management’ as well to cope with this rapid change, especially with the existence of uncertainty and complexity in the global economy.
Using dynamic management enables managers to “adjust plans to reduce difference between actual outcomes and original plan and expectations.” (Leitch) This means that the age of ‘static management’ has gone. It is not the time for ‘making things right’ it is more about ‘making the right things’. A basic requirement for this dynamic management is having a vision, mission, setting goals, and alternatives or, in another word, the dynamic business strategy.
Another requirement is the ‘collaborative management’. Nowadays, the manager by himself –for sure- will not achieve the level of success that could be achieved by a team consisted of the manager, the chief executive officer (CEO), chief executive for technology (CTO), and the chief of information security (CSO) for example. Smith also meant the same thing when he discussed ‘innovation management’ for organizations that use technology. (4)
‘Managing the change’ is an essential requirement for managers nowadays especially with the use of information technology as a strategic tool in this global marketplace. Change is happening, this is a fact, and more changes are coming, there is no doubt. This change could create resistance and managers should wisely manage this change with the right communication policy to manage expectations in order to soften and minimize this resistance.
An important requirement is making the balance and ‘managing diversity’ which is considered as one of the main challenges that a manager could face. According to Edwards “the challenge for the organization nowadays is to operate in diverse cultural settings” (cited in Česynienė 42).
Achieving these requirements gives managers a positive attitude and enables them to have the ‘global mindset’ -which Rhinesmith referred to- that “enables key managers to envision the possibilities of a global marketplace and then execute a global strategy effectively”. (3)
Česynienė, Rima. “Globalization and Human Resource Management”. Ekonomika. 82(2008): 41-56. 12 November 2008 <http://www.leidykla.eu/fileadmin/Ekonomika/82/41-56.pdf >
Heller, Robert. ”Management Challenges: The management revolution has brought with it challenges that must be met”. Thinking Managers, 8 July 2006. 12 November 2008 <http://www.thinkingmanagers.com/management/management-challenges.php>
Leitch, Mathew. A New Approach to Management Control: Dynamic management, 2002. 12 November 2008 <http://www.dynamicmanagement.me.uk/dynamic/index.html>
Rhinesmith, Stephen H. Managers Guide to Globalization: Six skills for success in a changing world. McGraw-Hill, 1996
Smith, Roger. “Technology Impacts on Business: Disruption, globalization, and innovation management”. CTOnet.org. 2004. 12 November 2008 <http://www.ctonet.org/documents/TechnologyImpact.pdf>
ThnikExist.com. “Kofi Annan Quotes”. ThnikExist.com, 2006. 12 November 2008 <http://thinkexist.com/quotation/it_has_been_said_that_arguing_against/151768.html>