how globlization affects the business

8/12/2019 How Globlization Affects the Business

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INTRODUCTION

Trends in the business environment

The changing nature of work

Demographic, societal and work-force trends

The changing nature of the employmentrelationship.


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GLOBALIZATION OF BUSINESS

A major environmental change that has taken place inthe last fifteen years is the globalization of business. Toyota Motor Corporation makes cars in USA and India.

Mc Donald's sells burgers in India and hamburgers in China,

and Marks and Spencer's sells products in India. Every other product sold by Wal-Mart stores Inc. is made in

India.

Multinational corporations require employees who can

adapt to different cultures, customs, social practices,values, economic and political systems andmanagement approaches, who can work with otheremployees from differing backgrounds.


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ENVIRONMENTAL TRENDS AND

HUMAN RESOURCE CHALLENGES

Business Environment

Globalization and increased competition

Mergers and Acquisitions

Downsizing

Changing Nature of Work

Industry and Occupational shifts.

Technological Advancements

Outsourcing

Flexible Work Arrangements


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Demographic, Societal, and Workforce Trends

Workforce Composition

Workforce Availability

Ageing population and workforce Educated and knowledge workforce

Women in workforce

Changing family structures

Global Workforce

Contingent Workforce/workforce flexibility


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Changing Nature of Employment Relationship

Offering challenging jobs to employees

Managing rewards for enhancing employee performance.

Providing opportunities for enhancing skills through training,development, and educational programs.

Understanding value differences across different employeegroups and customizing HR programs.


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THE FOUR MAJOR HRM ROLES IN THE

KNOWLEDGE ECONOMY ARE AS:-

Human Capital Steward

Knowledge Facilitator

Relationship Builder

Rapid Deployment Specialist


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CHALLENGESFACING HRM IN THE

KNOWLEDGE ECONOMY

Attracting and retaining knowledge workers, whoare intellectual capital of the firm

Obtaining commitment from workers in the contextof a changed employer-employee contract.

Ensuring the availability, development, andutilization of human capital to enhance its value

Motivating Knowledge workers

Ensuring maximum utilization of temporary and

contingent employees Encouraging employees to commit to continuous

learning

Cont.


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CHALLENGESFACING HRM IN THE

KNOWLEDGE ECONOMY

Facilitating sharing of knowledge withinorganizations

Facilitating work-life balance

Rewarding Knowledge acquisition and knowledgesharing

Enhancing cross-functional team work and teamidentification

Creating a flexible human resource management

team that sets and supports the agenda forchange

Coordinating between organizational functions


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EFFECTS OF GLOBALIZATION IN THE

WORKPLACE

Increased Cultural Diversity Differences in work ethics and religious differences are hot-button

topics worldwide.

Earnings Changes With lower standards of living, third world companies can offer their

services at a rate greatly reduced from those in countries with higherstandards of living.

Employee Training In order to protect their companies and their new employees from

discrimination, managers have had to implement policies and offertraining to existing employees to make sure everyone can accept oneanother.

Increased Standards workplace safety and increasing workplace condition

standards. This directly benefits the employees who may havebeen previously working in unsafe or unsanitary conditions.


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HOW GLOBALIZATION CHANGE

BUSINESS

Preconditions for Globalization

Business Purchasing Impacts

Business and Brand Management Effects

Government Policy Effects

Limited Duration of Globalization


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CHANGING BUSINESS ENVIRONMENT

OF SMSSIN THE ERA OF

GLOBALIZATION Globalization and its impact

Changing Business environment of smss

Globalization and policy environment

Business strategy of smss in the era of globalization.


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EFFECT OF TERRORISM ON THE

GLOBAL BUSINESS ENVIRONMENT

Due to terrorism the normal functioning of an organization is disruptedand this, in turn, affects the prospects of employees therewith(promotions, increments, bonuses, etc.). Not only this, productivity andmorale of the employees become very low. Terrorism, thus, destroys theorganizations in the most adverse manner; every effort to reconstruct thedamage caused is immense and may not be possible. For example, due

to attack on World Trade Centre, the foreign investors would not like tocross their national boundaries thereby, hampering the developmentalprospects of other nations.

The destruction is massiveespecially of the innocent masses apart fromthe destruction of an economy's infrastructural facilities (port, buildings,etc), major sectors (real estate, tourism, hospitality, etc) getting trappedin the financial and economic crisis, and image tarnishing of majorcorporate For instance, due to the 9/11 attacks in US, an investment bankoperating in one of the World trade center lost nearly 650 employees.

Cont.


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In addition to the above, Terrorism has adverse effect on thepsychology of individuals of a nation by creating a sense ofinsecurity and fear in them. They are terrorized to move andrelocate in any part of the world beyond their home/domesticterritory. This narrows the scope of mobility of labour and

knowledge workers which is a necessary precondition foreconomic growth and development.

The irreparable destruction following terrorism - theconstruction delays, security concerns and public criticism -lead to changes and delays in the process of re-building and

re-structuring the economy. On the flip slide the funds whichcould be invested for growth and expansion would now beutilized in the process of restructuring and recovering thelosses and damages caused by terrorism.


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Terrorism also affects the interests of not only theemployees of an organization but also the stakeholdersand investors. It affects the business of organizations for aparticular time period. With this the requirement for raw

material and other resources goes down and that inturn, affects the business of the entire chain(stakeholders attached). This further discourages theinvestors coming in the economy and thereby, reducingthe money inflow and hence, the purchasing power ofeconomy in an adverse way. This reduces theinvestment capacity of individuals/groups which, in turn,affects the various sectors of an economy (such as,stock market, real estate and infrastructure, tourism,hospitality, etc.).


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EFFECTS OF GLOBALIZATION ON WORK AND ORGANIZATIONS:

EXPLORING POST-INDUSTRIALISM, POST-FORDISM, WORK AND

MANAGEMENT IN THE GLOBAL ERA:

As we move from Fordism to Post-Fordism and fromIndustrialism to Post-Industrialism, the new Market thatprevails under Globalizationimplies many changes tothe nature of work and organizations.

Before describing the impact globalization has had onwork and organizations, it may be useful to briefly speakabout the central ideas of Post-Fordism and Post-Industrialism. Fordism refers to ideas and principlespropagated by Henry Ford: mass production of uniform

goods and a market for this, rigid technologies like theassembly line, unvarying work routines (Taylorism), andincreasing productivity through economies of scale,deskilling and intensification (Ritzer, 2000).
http://www.studentpulse.com/keyword/globalizationhttp://www.studentpulse.com/keyword/globalization


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Multinational corporations have begun to focusprincipally on brands and brand management,believing that while products are made in factories,a brand is made in the mind and bought by the

consumer (Klein, 2000). A brand is an idea, alifestyle, and an attitude.

It was Team Nike that initiated the no-limitsspending on branding, together with completedisinvestment in its workers. As Phil Knight says:There is no value in making things any more. Thevalue is added by careful research, by innovationand by marketing (Klein, 2000, p197)


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Companies are rapidly expanding to become thedominant one in their market and while employeeswages remain low or decrease, these employees

are the ones creating the profit used for expansion,which is given priority over workers wages. Thus, asKlein (2000) states: It is one of the paradoxes ofservice-sector employment that the moreprominent a role it plays in the labor landscape, the

more the casual service-sector companies becomein their attitude toward providing job security(p242).


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A new idea is that individuals should, to be successful

and empowered, create the Brand called you and

think of themselves as service providers, creating a Free

Agent Nation (Klein, 2000).

For the latter, according to Klein (2000), temporary work

is the worst of both worlds: monotonous work at lower

wages, with no benefits or security and even less control

over scheduling (p254).

As Klein (2000) states, these are the two extremes oftemporary workers: the contractor in Cavite afraid of

flying factories, and the temp CEO unveiling

restructuring plans New York (p255).


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The rise of the global economy thus meant a radicalchange in work and organizations. Althoughmultinationals are creating economic growth, thishappens as the result of job debasement and job loss

(Klein, 2000). Thus, a healthy economy no longertranslates into job stability or an increase in jobs. Klein(2000) states that while this may mean increased profitsfor corporations

Interestingly, it is at Microsoft where, as Klein (2000)

states, temp rage seethes like nowhere else as theyopenly admit that these workers only exist to protect thepermanent workers, as a quick way to cut costs, toabsorb the blows (p270).


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Due to the changes that globalizationis creating forwork and for organizations, new forms of workplacecontrol are also coming about (Deetz, 1998).

AIMS is a service component of a multinationaltelecommunication corporation (LTC). It is made upof six work groups of six to fifteen people.
http://www.studentpulse.com/keyword/globalizationhttp://www.studentpulse.com/keyword/globalization


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In this manner, the new market and principles thatoperate under globalization (and Post-Fordism and Post-Industrialism) has not only seen the disappearance of fulltime work, to be replaced by outsourcing, temporary

workers, and a new kind of workforce which is highlyunstable and detrimental to workers; it has also seen theemergence of a new kind of organization, one in whichdomination, control and power is so subtle and so wellmanipulated, that employees are completely unawareof it. As Klein (2000) states, it is labor market trends underglobalization that are creating increasingly tenuousrelationships to employment for many workers


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CONCLUSION

Organization all over the world use various changeprocesses, such as outsourcing, downsizing, andreengineering, to ensure the continued success of

the firm. Some of the changes are reactive (natural disasters,

terrorism, market crash, etc.) and others can beproactive (like Mergers & Acquisitions, Downsizing,Outsourcing, etc.).

So, reconstituting and reassuring the workforcethrough proper communications with a sense ofsecurity and stability is necessary for organizations.

how globlization affects the business

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