In 1984, the movie The Gods Must be Crazy depicted a Kalahari bushman who finds a Coca-Cola bottle that was discarded from an airplane into the desert. The bushman does not recognize the bottle or the brand, and the situation leads to all manner of confusion among the tribe, who try to decipher the meaning of the bottle. Such a story would be rather incomprehensible today, that there would be anywhere in the world where people would not recognize a Coca-Cola bottle. Indeed, not long after the movie was made, the process of globalization began in earnest with the Canada-U.S. Free Trade Agreement, followed by waves of other bilateral and multilateral free trade agreements, and then followed further by the invention of the Internet. If the era of globalization had not been officially declared before, by the time the 1999 WTO protests in Seattle occurred, globalization was a household word.
Globalization is one of the major driving forces in business. The processes by which globalization has occurred are technological advancements in communication, improved transportation infrastructure and trade liberalization. On the first, communication has improved substantially since the Internet went public in 1994, creating a world where people are increasingly interconnected. Transportation advancements have allowed for easier movement of goods and people around the globe. Trade liberalization has encouraged such movements, especially of goods and capital. The customs union in Europe, then later the Canada-U.S. Free Trade Agreement and its successor NAFTA, spurred the era of trade liberalization that occurred with GATT evolved into the WTO.
What these forces have done is allowed businesses to emerge that are truly global in nature. Prior to this era of globalization, companies tended to operate in one country or region, and few were globally powerful. Even the most powerful organizations in the world -- oil companies, mining concerns and automakers -- were not truly global during this era. However, successive waves of liberalization have brought us to this point, where a company can be truly global. Even the companies that are not global themselves interact with the rest of the world as though the entire planet was a singular market. People are in constant communication with other people around the world, and communications advances have given rise to an era where virtual teams, intercultural collaboration and global business are the norm.
This trend has had significant implications for the world of business and for the companies that operate in this world. Many industries have engaged in multiple rounds of consolidation in order to leverage economies of scale. More products are being sold all over the world, to the point where hundreds of brands are now recognized almost everywhere. Moreover, as trade barriers come down, even companies that do not want to operate internationally are in a position where they face competition from those companies that do.
The implications for business are considerable. Businesses must now think and act globally. There are inherent challenges for this. Many companies must alter their organizational design. Most companies have organizational cultures that are reflective of where they are from, something that may or may not make sense in a globalized world. For business, and for the study of organizational behavior, the task is to keep up with the current study of globalization, and how it is affecting businesses. The winners in globalization are the companies and the countries that are best equipped to manage in a globalized world, and this paper will examine what the implications of globalization are for the modern corporate organization.
Relevance to Organizational Behavior
The forces that are driving globalization are having a profound impact on organizational behavior, in several critical ways. First, organizations must deal in a multicultural business environment. Their customer and supply chain webs spread around the world, even if their operations do not. Companies must collaborate with partners all over the world as well. Yet, cultural differences still exist. Whatever effect the rise of the global corporation...
The reality is that these changes are already being reflected in organizational behavior. Companies have long sought to instil a common corporate culture, and this is still evident in the global business environment. The difference is that the common culture must both incorporate local cultural norms while at the same time transcending the differences between cultures. Corporations are conflicted between pushing their own cultural norms on their workforces and strategic partners while simultaneously recognizing and dealing with the influences that local cultures have on the mechanisms of organizational behavior.
Different cultures are different -- this is self-evident fact. But for global organizations, part of the job is to recognize what those differences are and how much they matter. The role that hierarchy, communications styles and organization design play can be quite different in different countries, but within one corporation there should only be a singular structure. How to make this work is a significant dilemma for the global organization. Resolving this dilemma requires understanding the different elements of organizational behavior -- motivations, negotiations, power structures, organizational design and communication -- and how they each can be used to resolve the dilemma. There is no one right answer, and most organizations are struggling to keep up with the rapidly-moving forces of globalization.
The rapid pace of change in communication has brought with it its own set of problems. While there are clear benefits from reducing communications barriers and from democratizing knowledge, there are risks inherent in global virtual communications. Managing these risks in order to extract the benefits is one of the central tasks for managers of organizational behavior. The virtual work team is an emerging field of particular interest, since labor has become dispersed around the world globally, and many other nations outside of the west are starting to make high-level contributions to business.
Organizational behavior therefore lies at the fore of extracting the benefits of globalization. When organizations expand their size, they must build into their structures the fact that within the organization is an ever more-diverse group of people, and these people are going to have very different perspectives on the nature of organizational behavior, and very different norms. Communication is a huge challenge, not only because of language barriers but communications style. For the organization, getting people all around the world pulling in one direction is a massive challenge. Understanding how the drivers of organizational behavior are changing and responding to the globalized business environment is critical to the success of the modern globalized organization. Thus, this topic is of utmost importance for organizational behavior -- it is arguable the most important issue in the organizational behavior of large corporations today.
Literature Review -- Globalization & Business
There are two schools of thought with respect to the influence of globalization on global business culture. The prevailing wisdom, in particular during the earlier stages of globalization, is that globalization was simply a manifestation or extension of colonialism and that Western business culture was resulting in global homogenization. This view seems reasonable, primarily because the forces that drive globalization were driven by Western interests. The West started the process of trade liberalization and it was Western agenda that ran the first couple of rounds of WTO negotiation. Further, the world's transportation and communication advances arose in the West as well. So much of globalization seemed to be about allowing Western companies to pursue their interests around the world.
That is a fair argument to make, but there is another perspective on the impact that globalization has had on global business culture. Hooker (2012) argues that what is occurring is in fact a process of what he terms "deglobalization." The term is sort of nonsensical, but the concept makes a lot of sense to anyone who has observed the evolution of the globalized business culture. Instead of the West running roughshod over the rest of the world, what has occurred is the rise of many other cultures in the global business milieu and this has significant impacts on global business culture. A multinational or international corporation today will bear the cultural influences of its markets and its employee bases, and increasingly these are not just Anglo-American but Chinese, Korean, Indian, Arab and Eastern European. Traditional sources of business culture influence have been joined by new influencers. A CEO can come from anywhere -- India in the case of Pepsi, Lebanon in the case of Renault-Nissan (itself a global mutt), and Brazil in the case of AB-InBev (another global mutt). Globalization's influence on business culture is not about the dominance of Anglo-American or Germanic cultural values so much as it is about absorbing different cultural values from all over the world, and fusing them into what will one day become, maybe, a singular global culture.
As Hooker notes, there will be more influence from those cultures that have comparative advantage in certain attributes conducive to business. Cultures with higher degrees of xenophobia or discomfort with multiculturalism…
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