Workplace - Globalization Flashcards
Globalization
Globalization is the process of increasing the connection between the world’s economies, cultures, and populations. It’s driven by the exchange of goods, services, capital, technology, and people across borders.
Ways Globilization has changed the way we work and live
Technology is a primary driver Communication
Diversity
Automation (through) Tech
Competition.
Push Factors
A push factor is a condition that causes people to leave a place or situation
Economic hardship: Poverty, lack of jobs, and famine
Political instability: War, political conflicts, and religious or political persecution
Social unrest: Anomie
Environmental disasters: Natural disasters, drought, and overpopulation
Lack of opportunities: Poor medical care, lack of educational institutions, and stress
Pull Factors
A pull factor is a positive attribute of a place that attracts people to move there
Job opportunities: A booming job market can attract people to a new area
Higher income: People may be attracted to a place with higher wages
Better living conditions: People may be attracted to a place with better public services, higher living standards, and better working conditions
Political or religious freedom: People may be attracted to a place with more political or religious freedom
Perlmutters Four multinational Corporation Orientations (Strategic approach to Globalization)
:Ethnocentric, Polycentric, Regiocentric, and Geocentric
representing different levels of a company’s approach to international business, with Ethnocentric focusing on the home country practices, (one best way)
Polycentric adapting to each local market, (many best ways)
Regiocentric grouping similar regions
Geocentric taking a global perspective considering both local and global needs. (team way)
what is Global Integration Vs Local Responsiveness
when an org. goes global in an attempt to meet needs of customers the needs are expressed by global integration or local responsiveness
GI-
Global Integration
Global integration is the process of coordinating a company’s operations across multiple countries. It allows companies to combine their resources and ideas to improve efficiency and compete globally.
How it works
Standardize products: Companies can use the same products in different countries.
Centralize technology development: Companies can develop technology in one place and use it globally.
Harmonize strategies: Companies can create a unified approach to production, marketing, and distribution.
Benefits
Increased efficiency: Companies can use resources and ideas more effectively.
Better global competition: Companies can compete more effectively against other companies globally.
More trade opportunities: Companies can access new markets and trade opportunities.
L
Attracting new talent: Companies can attract new talent from around the world.
Local Responsiveness
Local responsiveness is a business strategy that involves adjusting a company’s products and operations to meet the needs of local markets. It’s a way for companies to gain a competitive edge by customizing their products to local tastes and preferences
Assignees
People who work outside their own countries
Drivers in decision for orgs to go GI or LR
Market ,
Cost
Governmental
Competitive
Structure for globalization
Global: Strong link between HQ and subsidiaries (high GI, low LR
International: Weak links between HQ and dependent subsidiaries (Low GI, Low LR)
Trasnational: High GR, high LR) Strong link between HQ and subsidiaries
Multidomestic: Low GI, High LR weal links between HQ and autonomous subsidiaries
Identity Alignment
Exent to which diversity is embraced in managment of people, products/services and branding.
Example: Fast food chaings offering localized menu in addition to standard menu
Process Alignment
Extent to which underlying operations such as IT, finance or HR integrate across locations.
Example. Business where units have a common platform.
Outsourcing
Sometimes referred to as contracting out.
process by which an organization contracts with third party vendors to provide selected service/activities instead of hiring new employees
Onshoring
Relocation of business process or production to a lower cost location inside the same country as the business. sometimes called home shoring.
lower operations cost and having local employees are reasons for this
Off Shoring
Relocationg processess or production to another county.
common reasons would be
lower cost, closer proximity to necessary resources, financial incentives, access to talent, round the clock shifts
Near shoring
Refers to a company contracting part of business process to an external company located in a country that’s close
reasons would be countries share similar values, countries bound by same financial and legal constraints, reduced travel time for employees
what are upstream strategies
Upstream:
Decisions are made at the organizations headquarters level.
Decisions apply to strategy and coordination and focus on standardization of processes and integration
works for:
workforce alignment
Organizational development
Sharing of knowledge and experience
Downstream Strategies
Decisions are made at the local level
Decisions aim at adapting strategic goals and plans to local realities -in other words, local responsiveness
Strategies for:
- agreement with local workforce
-adjustment to standard policies on working conditions to reflect local cultural practices
-adjustments based on local legal requirements
Turnkey Operation
An already existing operation
Greenfield Operation
a new operation built from ground up
Brownfield Operations
repurposing an existing disused facility
what are perlmutters four orientations for multination corporations?
Ethnocentric, Polycentric, Regiocentric, geocentric
Describe Perlmutter Ethnocentric
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.”
Management will usually share a common ethnic background, different from the ethnic make-up of subsidiaries.
polycentric
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.”
What is perlmutters Regiocentric
Subsidiaries are grouped into regions (such as Europe, North America, or Asia-Pacific).
Strategic coordination is high within the region but not as high between the region and headquarters.
Geocentric
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.
What are the 4 globalization strategies
international, Multidomestic, Global, transnational
International Globalization Strategy
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.
Examples: A German firm that manufactures robotics for specialized industrial purposes around the world; an American-based defense contractor, that, for security reasons, must maintain clear lines of separation among its various international subsidiaries.
Multidomestic
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.
Example: A confectionery company, with different products and manufacturing and sales strategies for each market in which it operates.
Global
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.
Example: A white goods manufacturer whose products are quite standardized (washing machines, dishwashers, etc.).