Globalization & organizations
Much has changed with Globalization. With globalization, organizations are no more bounded by geographical boundaries. This presents today’s management with both opportunities and challenges they never experienced before. Companies like Exxon-Mobile are earning upto 75 percent of their revenues from sales outside the United States. While other companies such as Finland based Nokia is increasingly recruiting new employees from India, China and other developing countries. Thus globalization brings with it the following challenges and opportunities for management.
Managing culturally diverse workforce Workforce today has become increasingly diverse. A diverse workforce presents new challenges to management. People from different cultures have very different perceptions, attitudes and values. An organization’s management must learn how to create a corporate culture that can bind such a culturally diverse workforce. Increased foreign assignments With globalization, employees today are expected to perform jobs outside their country. This often requires a company’s management to train their employees with the culture, attitudes and language of the foreign country.
Moreover, national cultures often have deep impact over the corporate culture, thus employees have to adjust to the new corporate culture abroad. Jobs outsourcing Global companies are finding it difficult to compete with firms who rely on workers from the developing world because of the high difference in wages between employees of the developing and developed world. As a result, a good portion of jobs from America and other developed nations are being transferred to the developing world. While jobs outsourcing has resulted in reduced costs for organizations in developed nations, it is also widely criticized in these countries.
Managers today must deal with the task of balancing the interests of their organization with their responsibilities to the communities in which they operate. Corporate responsibility and ethics Corporate ethics have become issue of greater importance in the past decade or two. Especially with increase in news of unethical practices by executives at Enron, Merill Lynch and WorldCom, corporate ethics has turned into an important concern for the public and politicians alike. Globalization has also resulted in increased importance of corporate responsibility and ethics.
Organizations now are under more pressure to behave ethically, both by local and global consumer rights activists and pressure groups. Manager’s today are more likely to be under pressure to behave ethically in decision making. With increasing emphasis on individual rights and social justice, management today needs to address these issues while at the same time stressing the need for efficiency and profits. Often times, ethical behavior, and increased efficiency and profits form opposing poles giving managers tough time to balance between organizations interest and ethical behavior.
Organizations today are under a strict watch to behave responsibly. Animal rights group pressurize apparel companies against using animal fur. Popular food chains such as McDonalds and KFC are often under pressure to provide consumers with food that is not genetically modified. Some organizations are under strict watch to dispose off their wastes safely. Organizations themselves are behaving more responsibly than ever both due to increased awareness and more pressure from pressure groups. For example, use of green technology and environmentally friendly policies of organizations are on the rise.