Globalization Flashcards
Inevitable integration of markets, nation-states and technologies to a degree never witnessed before - in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before
Globalization
The investment of foreign assets into domestic structures, equipment, and organizations.
Foreign Direct Investment (FDI)
The workforce in emerging countries is becoming disproportionately young while the workforce in developed economies is rapidly aging.
Demographic Dichotomy
Innovations created for or by emerging-economy markets and then imported to developed-economy markets.
Reverse Innovation
Headquarters maintains tight control over subsidiaries, who are expected to follow the strategic pattern, values, policies, and practices expressed by headquarters. There is “one best way.”
Ethnocentric
Subsidiaries are allowed a large measure of independence as long as they are profitable. They may plot their own paths based on the business and cultural contexts of their countries. There are “many best ways.”
Polycentric
Subsidiaries are grouped into regions. Strategic coordination is high within the region but not as high between the region and headquarters.
Regiocentric
Subsidiaries are neither satellites taking orders nor independent bodies setting their own course. Headquarters and subsidiaries are participants in a network, each contributing its unique expertise. There is essentially “a team way,” transcending national borders.
Geocentric
Consistency of approach, standardization of processes, and a common corporate culture across global operations.
Global Integration (GI)
Adapting to the needs of local markets and allows subsidiaries to develop unique products, structures, and systems.
Local Responsiveness (LR)
A firm exports a product or service to foreign countries. The company may open production facilities or service centers, but the product/service, processes, and strategy are developed in the home country.
International Strategy
The organization is a decentralized portfolio of subsidiaries. Goals and strategies are developed locally because of competitive demands. Knowledge is shared on a local rather than global level.
Multidomestic Strategy
The firm views the world as a single, global market and offers global products that have little or no national variation or that have been designed with customizable elements. Strategy, ideas, and processes emanate from headquarters.
Global Strategy
The firm locates its value chain activities in the most advantageous geographic locations. Subsidiaries are allowed to adapt global products and services to local markets. Best practices and knowledge are shared throughout the organization.
Transnational Organizational Structure
An organization with a strong global image but and equally strong local identity.
Glocalization
Decisions are made at the organization’s headquarters level.
Decisions apply to strategy and coordination and focus on standardization of processes and integration of resources.
Upstream Strategy
Decisions are made at the local level.
Decisions aim at adapting strategic goals and plans to local realities - in other words, local responsiveness.
Downstream Strategy
Diversity is embraced in management of people, products/services, and branding.
Differences among locations are embraced.
Product/service offerings and brand identity may be adjusted to accommodate local cultures.
Identity Alignment
Extent to which underlying operations such as IT, finance, or HR integrate across locations
Process Alignment
Practice where a company transfers portions of work (e.g., processes or production) to outside suppliers rather than completing it internally.
Can provide cost savings for an organization, but there is a loss of managerial control.
Outsourcing
Practice of relocating processes or production to another country.
Offshoring
Relocation of business processes or production to a lower-cost location inside the same country as the business.
Onshoring
Company contracting a part of its business processes or production to an external company located in a country that is relatively close (e.g., within its own region).
Near-shoring
Third party provides dedicated services to HR, often locating contractors within HR’s organization.
Can be more expensive than outsourcing, but there is more managerial control over the contractor.
Cosourcing
- Analyze needs & define goals
- Define the budget.
- Create a request for proposal (RFP).
- Send RFPs to the chosen contractors.
- Evaluate contractor proposals.
- Choose a contractor.
- Negotiate a contract.
- Implement the project and monitor the schedule.
- Evaluate the project.
Nine Steps of Outsourcing
