Globalization Determines Companies to Adapt

¶ … globalization determines companies to adapt their strategies to the complex environment influenced by this phenomenon. In order to address the global business environment, entrepreneurs must develop strategies intended to develop their range of products and services, to become more cost-effective, and to consider the outsourcing of their companies' processes. In such cases, the organization form of the company becomes very important. The most common forms of business organization are represented by sole proprietorship, general partnerships, limited liability company, and corporations.

It seems that corporations are the most favored types of companies in relationship with globalization. Even more, certain specialists in the field consider that corporations manipulate the mechanisms of globalization in order to improve the benefits they can gain from this process. This means that it is more difficult for smaller competitors to counteract the effects of globalization and to exploit the opportunities it provides. In order to properly address the global environment, it is recommended that entrepreneurs pay great attention to the organizing function of management.

This is because a great part of the company's success relies on organization. This function in the case of managers refers to identification of activities, organizing the activity of departments, classifying the authority, and coordinating authority and responsibility (Management Study Guide, 2011). Also, in order to develop suitable strategies, businessmen must clearly make the difference between management, leadership, and entrepreneurship. Management consists in determining people to work together in order to reach the objectives established by the company or by the group in case.

It also refers to the proper allocation of limited resources. Leadership has a similar, but more complex meaning. The term refers to the ability of the leader of convincing his team to willingly perform their tasks. Leaders must make the proof of complex sets of skills in comparison with managers. Entrepreneurs are connected with innovation, which represents the basis of the business effort. The current global environment requires strategies that encourage and support corporate entrepreneurship. In other words, companies must rely on innovation in order to create competitive advantage.

In addition to this, it is recommended to address emerging markets that have not reached their potential. This way, companies can benefit from strong market positions. It is also recommended to address niche market with a reduced number of competitors. Specializing in niche sectors allows smaller companies to compete with larger ones in certain segments. By addressing the international markets, companies expand their customer base. This means that their production capacity must also be expanded. However, this leads to increased costs.

This further leads to higher prices that customers might not be able to afford. Therefore, most companies prefer to outsource their production process and other activities to cheaper destinations that provide skilled workforce at lower prices. It is also more efficient to build.