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Globalisation and Its Effects
Defining Globalisation
What differentiates the depth and pervasiveness of globalisation in this century compared to previous is the acceleration of cultural issues driven by rapidly changing technologies that impact international trade agreements (Vitell, Nwachukwu, Barnes, 1993). Time is literally compressed to a level never before seen before in globalisation of previous centuries, with drastic impacts on international trade and corresponding management practices. Trade is now much more transactionally-driven and more focused on measurable results in near real-time increments. The transition of commerce from being longer in sales and service cycles to being nearly real time today has major implications on cultural boundaries of communication as well (Hofstede, Jonker, Verwaart, 2012). Globalisation is forcing people together into virtual teams from widely divergent cultures, accelerating assimilation and the need to produce results as shared teams quickly (Hofstede, Jonker, Verwaart, 2012). All of these factors combined are also leading to an entirely different series of assumptions as to how globally-based teams are managed and work together, compensating for wide divergences in cultures, values and expectations (Hofstede, McCrae, 2004).
International trade issues
The balance of trade between nations forces respective governments ti ether open or close their borders to trading partners. This has an immediate effect on the profitability of each decision to expand or not. An example would be of a company attempting to open an agricultural business...
International trade policies at a national level immediately impact companies looking to expand.
Cultural issues
As the Hofstede Model indicates, there are drastically different cultural values, perceptions and expectations between one nation or region and another. Cultural variations between countries can also impact the perception of time itself, which has a direct impact on customer expectations of performance. In any global expansion strategy the need for cultivating awareness and sensitivity to these cultural difference is critical to success. The Hofstede Model of Cultural Dimension quantifies these differences well.
Technological issues
Technology is acting as an accelerator of globalization, forcing cultures together extremely fast. Technology is also becoming the new dial tone of global business, enabling transactions to be completed across national borders in literally seconds where it would take days or weeks before. The pervasive use of the Internet combined with the rapid advances in enterprise software are making it possible for companies to expand globally at a pace never seen before.
Management issues
Managing across diverse cultural regions is difficult for many managers as they bring their own focus and ethnocentrism to the task of getting work done. For managers to be effective globally they need to create a more balanced and realistic view of the cultures they are working in, including a strong focus on how to interpret cultural,…
References
Bryman, A. 2003, "McDonalds as a Disneyized Institution: Global implications," The American Behavioral Scientist, vol. 47, no. 2, pp. 154-167.
Gilbert, G.R., Veloutsou, C., Goode, M.M.H. & Moutinho, L. 2004, "Measuring customer satisfaction in the fast food industry: a cross-national approach," The Journal of Services Marketing, vol. 18, no. 4, pp. 371-383.
Hofstede, G. & McCrae, R.R. 2004, "Personality and Culture Revisited: Linking Traits and Dimensions of Culture," Cross - Cultural Research, vol. 38, no. 1, pp. 52-88.
Hofstede, G.J., Jonker, C.M. & Verwaart, T. 2012, "Cultural Differentiation of Negotiating Agents," Group Decision and Negotiation, vol. 21, no. 1, pp. 79-98.
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