Over the past 20 years, the discussion of globalization captured the attention of business leaders, consumers and the media worldwide. With innovations in technology, the internet, advanced international delivery, speed of information delivery and easily accessible travel, organizations, large and small, expanded their products and services into the global marketplace.
The concept of globalization creates new opportunities for organizations to profit and grow financially and structurally. New social structures, cultural behaviors, traditions, languages and business practices inspire innovation into new markets often creating new products and services.
In the global marketplace, corporate structure and culture must also adapt to the dynamic environments that now dominate. Organizations, beginning with management, must provide open, creative and flexible culture in the workplace to remain successful. Openness and acceptance of team expression contributes to a strong company culture, which yields higher performance and increased loyalty by team members.
Contemporary management in the global marketplace must be flexible in planning, innovative with product creation and understanding with service adaptation to new markets. Many contemporary managers use technology to streamline business process with e-business. This virtual workplace allows organizations to maintain the community vibe across international boundaries with uses of video conferencing, instant messaging, blogs and wikis.
Overall, organizations must adapt management to be truly successful in the global marketplace. From acceptance of team cultural differences to the implementation of new technology, contemporary management in the global marketplace leads to increased brand awareness, product sales and team loyalty.
MANAGEMENT HISTORY AND ADAPTATION
IN THE GLOBAL MARKETPLACE
Management in the global marketplace holds several advantages and disadvantages over domestic managers. This includes managing multiple projects, often with teammates from various countries and cultural backgrounds. This opportunity contributes greatly to each team member’s personal and career growth by exposing them to new people, places and things which increase the possibility of innovative strategic planning. Some challenges to management in the global marketplace include a heavier workload, longer research process and cultural boundaries that sometimes cannot be resolved with current practices.
Today managers must adapt organization strategies to constant changes in the global marketplace. Technology, security threats, emphasis on social responsibility and increased competiveness are major factors that contribute to how the role of management has changed. Technology introduces increased mobility, work-life balance, flexibility and organization boundaries. Increased economic issues and global warming are two examples of recent changes in an organizations security threats. More competition has increased the number of companies that focus on social responsibility and ethics. Globalization is a common factor in all four areas of change as a cause and as an impact.
A combination of technology and globalization has expanded the possible uses of the historical management model, the quantitative approach, in current business strategies. Many companies use an interactive presence as a primary marketing tool and/or digital storefront. The use of tools like Google Analytics makes is very simple to track web site metrics and drill down to quantitative data, allowing improved decision making. By seeing which countries, cities or neighborhoods visit your interactive touch points most often and where they visit, international organizations are able to strategize.
GLOBAL MANAGEMENT AND ORGANIZATIONAL CULTURE
The behavioral approach, where the human factor is considered the most valuable asset in an organization, plays a large part in the success of companies in the global marketplace (Eriksson et al. 1997). Management must learn from and utilize the different talents and backgrounds of each team member. Cultural differences, various ethnic backgrounds, widespread locations are all opportunities to engage new business by approaching each locale with relevant opportunities. This diversity also contributes to the successful management of projects by incorporating cultural expectations and practices into communication and overall project management. (Bartlett 1987) Some consequences of diversity in the workplace include possible language barriers and extended research and communication hours to gain understanding (Orr 2005; Orr and Scott 2008).
Engaging the global team and using their valued input towards company strategy and process, is a major factor that improves the corporate culture of multinational organizations. By incorporating the values of team cultures and behaviors, the team feels connected to the overall mission and vision of the organization. This strong culture leads to a team that is more loyal and with higher performance than organizations with a weak culture.
This openness and acceptance of team expression joins the organization in workplace spirituality. With widespread locales and virtual communication, teams in the global marketplace are often left feeling a lack of community and connection. By providing teams with platforms to contribute, opportunities to grow personally and professionally, and an environment that promotes trust and openness, the organization pulls each team member deeper into the corporate culture.
Domestic companies, primarily the United States, are often accused of having an ethnocentric attitude, believing the “AMERICAN WAY” is the “ONLY WAY”. An example is the current status of the US automobile industry. For years, the global automobile industry had moved past America in creating lighter, more eco-friendly autos. Companies like Ford Motor Company and Chrysler continued developing and dumping marketing dollars into high end sports utility vehicles. Successful multinational organizations considered the world view on the industry, not only the benefits to local consumers. Toyota is the leader in the hybrid car marker and was an innovator in the industry.
SOCIAL RESPONSIBILITY AND MANAGERIAL ETHICS
IN THE GLOBAL MARKETPLACE
Another element that effects management in the global marketplace is social responsibility and managerial ethics which can also be influenced by cultural and ethnic differences. United States based company, Nature’s Sunshine was accused and found guilty of bribing customs brokers and officials financially to begin reselling their health products in Brazil (Harvy, 2009). Although this practice is completely forbidden and illegal in the United States, it is common practice in the South American country. (DiPaolo, 2006) It is necessary for companies to comply with FCPA (Foreign Corrupt Practices Act) and other international laws that are in place to set global standard for ethical business practices.
We previously discussed the automobile industry, which also serves as a great example of companies and which approach they decided to take in reference to the global “Go Green” movement. While Ford Motor Company took the legal approach of only bring automobiles to the standards required by law, Toyota developed their product based on the demands of the market. On the other hand, there are companies that are true to the activist approach, like Whole Foods Market (Gidman, 2007) and Starbucks (Spiece, 2010), which are highly sensitive to the protection of the earth’s natural environment.
DECISIONS, STRATEGIC PLANNING AND ORGANIZATION
A positive contribution of management in the global marketplace is the avoidance of the common criticism that, formal planning reinforces success, which may lead to failure. Many domestic companies have failed to successfully embrace globalization because they are insistent on maintaining the plans and processes that created their initial success in country. Management of these companies failed to leave current comfort and the illusion of security. Chinese companies attempting to export to the United States has failed due to the refusal to change standards of quality. In 2007, 19.1 % of products made in China to be shipped to the US were deemed substandard. (Chang, 2007)
Managers in global marketplace must be specific but flexible in planning to be successful. Quality Float Works, a US based 4 generation family business, expanded to global market by making necessary shifts in their business model. When the family grew concerned that the business would die if changes were not adopted, Jason Sheer, Vice President and General Manager took flight over 80 countries seeking new business opportunities for their brand. With this persistent and flexible attitude, Jason was able develop and gain market share in the water industry in developing countries all over the world. (Katz, 2008)
Another strategy that has pushed many domestic companies into the global marketplace is the “first mover” strategy. Innovative organization management often pushes a new product or process into a new market where it currently does not exist. Amazon has been successful with the first mover strategy, initially with the launch of their online bookstore model, and presently with the development of the Amazon Kindle e-book reader. The day Amazon announced their plan to initiate sales internationally, including over 100 countries, their shares increased 4 percent. (Sage, 2009) Risks associated with the first mover approach include financial loss, high development cost and fluctuating market factors.
Successful global organizations often use the e-business strategy to lower costs, streamline processes, hire and evaluate potential hires, training consumers and team on products and services and two way communications. Deborah Collier, Managing Director of Echo E-Business, gave her top e-business predictions for 2010 (Collier, 2010). She confirms that especially with the growth of the social media and how integrated the internet is into daily lives worldwide, that companies large and small will land at the top of markets if they use successful e-business strategies.
Technology and globalization changed the way many companies communicate. Telephone conferences and in person meetings have exchanged value with video conferencing, wikis and blogs. Virtual multinational teams have invaded the global marketplace. It is no longer foreign to communicate with colleagues from several countries, perhaps speaking different languages.
With the creation of Linkedin, Craigslist, Monster.com, Idealist.org and many other recruiting and job posting web sites, technology directly impacts human resources efforts. Organizations can quickly and inexpensively recruit, interview and select teams worldwide. Linkedin.com, with over 43 million members in 200 countries (Pofeldt, 2009), it is one of the world’s most effective professional tools.
Two organizational structures benefit organization with international commerce plans. The first is the incorporation of the virtual organization, a small permanent core team with specialist hired on an as needed basis. This allows companies to benefit from a large talent pool with the complex organization structure and overhead. Geographical departmentalization groups teams together based on physical location. With global teams, this allows for targeted approaches in the local market.
In conclusion, the implementation of success management in the global marketplace includes strategies of innovation, flexibility, cultural sensitivity and advanced technology. With the proactive immersion of these aspects, organizations encompass the definition of contemporary management in the global marketplace.
Management must encourage team contributions, accept and remain open to cultural differences and provide a sense of community. By applying the behavioral approach, considering human talent the most valuable asset, organizations develop strong cultures which yield teams with more loyalty and increased performance.
By being socially responsible and ethical, organizations demonstrate their acceptance of the worldwide culture as opposed to domestic. Starbucks and Whole Foods Markets are leading examples of organizations with proven success by adopting the activist approach and demonstrating high sensitivity to the protection of the earth’s natural environment.
Contemporary managers create business strategies that are flexible to avoid being left behind. Quality Float Works demonstrated what success can come from being open to new opportunities in the global marketplace. In some cases, the most successful strategy to immerse a market in another country is to move first like Amazon with the Kindle eBook reader. The e-business strategy has connected the globe and created a much smaller worldwide marketplace. The hiring process, project management, organization communication, image branding, product sales and service marketing have all improved with the boom of new technology. In a world where social network profiles are now more valuable than resumes, video conferencing replaces weekly business trips and YouTube is positioned to take over the media industry as we know it, organizations that choose not to incorporate technology in their culture and process will be left behind the international commerce boom.
Globalization was a concept 20 years ago, today it is a reality. Once a company places a website on the internet, they now have access to consumers worldwide. The implementation of contemporary management into the organization increased chances of success. Amazon.com and Starbucks are companies that demonstrate successful strategies, strong corporate cultures and use of modern technology to remain viable in the global marketplace.
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