The aspects of globalization, culture, income inequality, and the macroeconomic environment are future issues that connect with my readings. Many of the interviewees, irrespective of their company's size were experiencing these issues. Many of them have altered the course of their companies, how they hire personnel, or even changed their leadership roles altogether. Each category however, is relevant to the continued success of their business franchises.
Video Categories
One aspect that was particularly interesting in regards to future issues was that of regulation. My readings of recent financial reform have indicated that regulation will impact both society and the institutions that provide these services. Using the tag index, many financial services companies are under increased scrutiny due to the financial crisis of 2008. One interview that particularly enlightening was that of Michael Gregory, senior economist at BMO capital markets. According to recent studies, the financial services industry is beginning to consolidate more as small firms merge and larger firms scale back operations. According to Michel Gregory, customers now need expert knowledge to navigate these volatile markets. Small firms, due to overregulation, are now competing with larger more established firms for the same business. The large firms, how subsequently have more financial backing, resources, and brand awareness, are now taking more business from the smaller firms. Regulation, as Gregory indicates, raising the transactions costs of smaller firms. Larger financial institutions have economies of scale which spreads the unit cost per transaction over a larger base of customers. This in term reduces the overall cost incurred by the larger firms. Regulation therefore is caused the smaller firms out of business they otherwise would have obtained without it. This trend will continue in the future as large institutions have stronger balance sheets than their smaller counterparts.
Another interesting aspect used in the video interview that was incorporated into my reading was that of customer preference. Gregory indicates that customers are now flocking to more quantitative projections. Computer algorithms and mathematical models are now dominating the market for research. Customers are seeking financial data backing up all predictions relating to the economy, particularly predictions of downside risk. As Gregory indicates in his interview, those looking to enter into the field must now have an entirely different skillset due in part to the regulation of government. Students must now have a higher degree of financial acumen in order to compete with larger more established firms using computer models. The models must be able to validate an individual's opinion regarding the course of economic activity within a given nation.
Globalization has had a very profound impact on many of the businesses mentioned in the video interviews. Globalization has affected many of those in commodity type businesses. For example, Nicole Roocke in her video interview mentions the increasing pressures of globalization in her interview. She explains how globalization affects the caliber of candidates that enters into her firm as well as the prices she can effectively charge others. Steven Anderson in his video interview also mentions globalization in his video interview as well. Competition, for broad geographic categories is shaping both the employment and business operations of these firms. Potential candidates must now compete with a growing demand of candidates from abroad with similar skills sets. Companies, particularly those within commodity industries are outsourcing work abroad to nations will lower cost structures. This has severe implications on hiring as free trade has lowered the demand for domestic workers and increased the demand for international workers. As such, companies are placing more emphasis on leadership qualities of potential candidates (Fiedler, 1967)
Globalization, according to Andrew Work of the Canadian chamber of commerce, has allowed for the expansion of corporations beyond their natural domestic limits. As such it has contributed to an increased standard of living in Canada. Free trade therefore, is a welcomed addition within the overarching trend of globalization. According to Tom Ruth, CEO of Halifax International Airport, free trade allows for the transfer of goods and services when demanded by specific economies. It also allows the countries best suited for such activities to flourish. For example, China is proficient in manufacturing which allows the country to export far more goods than it imports. Developed nations such as Europe, Canada, America, and to a smaller extent, Japan demand these cheaper goods as they import more than they export. This trade allows both parties to subsequently flourish. China can sell its products to generate addition funding to expand its economy while Canada and Europe have access to low costs goods and services (Dessler, 2006). With the advent of globalization, Chinese manufactures are better equipped to expand overseas to expand their manufacturing competitive advantage. This expansion allows lower cost goods and services to reach otherwise inaccessible areas of the world, thus increasing their standard of living. A shirt that once cost $15 now only costs $5. Society benefits as more dollars can be allocated to discretionary funds further boosting economic activity and subsequent prosperity. These savings are a direct result of free trade among nations with strong competitive advantages relative to their peer nations (Schwartz, 2010).
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