Cross Cultural Management
Pros of Globalization
Production grows faster due to globalization especially when countries produce services and commodities that possess proportional advantage. There is an increase in manufacturing activities due to competition which turns the focus of producers to excellence production rather than quantity production. In itself, globalization is a representative of a universal procedure for homogenizing goods, costs, interest duty, proceeds and earnings. It depends on three expansion forces. These are human relocation force, quick capital movements and worldwide trade as well as economic markets’ incorporation. Resources’ productivity is increased by these factors and movement of producers to different places enables them to produce quality goods that capture potential buyers’ attention. In turn, this improves the living standards of the people because of their ability to get quality goods.
Secondly, worldwide competition is enhanced by globalization because prices are restricted by affordable imports. This prevents economic growth from being wrecked by inflation. There are cases where globalization has been considered among the contributing factors for inflation. However, after assessing the situation properly it becomes apparent that globalization provides imported goods’ alternative when the products made locally become expensive because of the production cost and related factors. It is possible for the imported goods to be cheaper while suppliers may work hard in their efforts of ensuring that consumers get imported goods at cheaper prices.
Globalization provides an opportunity for consumers to access commodities that are not availed by the local producers. This is due to the fact that companies can now export products to foreign countries with ease (Bigman, 2002). This makes it possible for consumers to compare various brands or similar products of different companies. As such, they make decisions from informed perspectives depending on the value and utility of goods. Customers are able to purchase goods at prices that are convenient to them due to these comparisons.
Disadvantages of Globalization
There is a significant number of citizens in America who have lost jobs due to production shifts or importation of goods. Others have not lost their jobs but they are affected because their jobs are now paying less salaries and wages. Millions of American citizens are living in fear because they work for companies that are functioning under anxiety (Bigman, 2002). It is impossible for such workers to remain productive at home and at work. This might case a serious problem in families.
Impact of economic Downturn in Protectionism and Nationalism
There are negative impacts of the recent slowdown of economic growth on trade between countries. Several countries have imposed policies that are aimed at minimizing global trade. This occurs when foreign nations seem to benefit from the trade more than local firms. Protectionism is now a common phenomenon among different countries because their administrations are trying to liberate their domestic companies. Almost in all cases, this affects foreign industries negatively. Different economies have embraced protectionism. They are taking measures via artificial escalation of exports as well as diminishing imports. Apparently, the aim of countries with such policies is to establish these measures in order to protect home industries.
There has been an increase in the restrictions with the aim being to protect what belongs to the people while ensuring that equal opportunities are not provided for local and foreign institutions (Rickard et al., 2009). This shows that economic downturn influenced global trade negatively. Countries whose local industries were facing threat from foreign firms have been helped by economic downturn. This is because these industries lack a chance to endure the imported goods presence whose prices are low. Local products are favored by protectionism. This makes competition extremely stiff for foreign industries.
Financial nationalism has emerged afresh due to global slump. Countries are putting more efforts on minimization or reduction of globalization’s effects. This is due to the fact that several global economies are blaming one another for economic downturn. For instance, Apple products are manufactured by a plant in China but their proceeds are rarely beneficial to the Chinese people. There was an immense increase in investment flows and universal trade after the Second World War. However, countries were influenced by economic downturn to consider reducing participation in global economy’s activities.
Role of Culture in Global Management
Managers are now able to work in grounds that they are unfamiliar with due to globalization which brings different cultural practices together. Any sensible manager ought to try to comprehend cross-cultural practices because their business operates from this context. This comprehension calls for the identification of people’s culture by the manager so that the members of the culture can effectively identify with services and goods that an organization offers. The services and goods that an organization offers ought to consider the people’s culture for it to be successful.
The manager’s attitude towards people’s civilization can determine a business’ failure or success. The culture of U.S is very unpredictable when compared to that of other countries like Indonesia, Saudi Arabia and Japan. A U.S firm operating in any of these countries ought to be sensitive to cultural details among the people or the society to prevent cases of misunderstanding (Harris et al., 1991). A company from U.S should consider local culture details while offering services and products in Saudi Arabia. Violating cultural details can lead to disagreement between the firm and the citizens of this Islamic state. The case might be different when a U.S firm is operating in Germany since there are similar cultures between Germany and the U.S to some levels.
A U.S company with a business venture within North America may require increased creativity due to cultural diversity of this region. Failing to be creative will make the company incapable of meeting the needs of the North American people. Here, the idea is to enlarge market coverage while considering the people’s cultural practices.
Communication across cultures
This communication refers to a communication in which a person faces the challenge that comes with living in a place that has cultural ways that differ from the ones that he/she is accustomed to. A person is required to communicate and interact with people who might not be like them in significant ways. This communication emphasizes on the essence of promoting sensitivity to differences in intercultural communication while providing skills and knowledge to the person so that they can interact with people of the other cultures successfully (Dunphy, 2012).
Cultural variables in Communication
In communication, language is considered as a cultural variable. Small variations in a language that is common among individuals can lead to communication difficulties among nations that are socially close such as America and Britain. Being unable to communicate using a local language and poor translation can cause language ineffectiveness. For instance, the watchword of Pepsi, “Come Alive with Pepsi”, means “Come out of the grave” when translated to the German language (Blanchard, 2006).
Attitude that is caused by ethnocentric and stereotypical mid-sets is another cultural communications’ variable. This attitude can hinder organizational communication. The manager ought to ensure that translation is availed in an organization to prevent the use of offensive words in slogans. In the Pepsis slogan above, it should be changed for any investment made in Germany to avoid a possible misinterpretation.
Time is another cultural variable. This can determine the use of language in communication. How people of a specific community observe and use time ought to be considered prior the start of a communication process. For instance, the approaches of comparative timekeeping communicate the essence of the parties involved while to the Middle East people, only Allah controls time (Blanchard, 2006).
This is a process that involves the evaluation of the existing strategies and goals of the organization in order to align them with the market needs. Strategies are often considered as the remedy to market competition. An organization’s management that intends to cope with market challenges should recognize the rich calculated substitutes in addressing critical stages of the process of formulating management and marketing strategy. Formulation of strategy requires the management to use exclusive ways within the market apart from copying other organizations (Segal-Horn, 1999).
Approaches to International Strategy
Before going international, any organization should consider several factors. The first factor ought to be the expected competition. A wider market has stiffer competition and an organization that fails to consider this factor will most likely be frustrated. International strategy entails knowing that there are several organizations that produce similar goods as well as the best way to capture the attention of customers. This ought to be the major concern when a company intends to become an international organization. Customers’ purchasing power within a market is also another factor. This should be determined while packaging goods and setting prices.
Factors for a manager to consider
A manger ought to consider the challenges that come with the new markets including government policies which can affect a company. The manager should also consider culture since this can affect an organization positively or negatively. Substitutes’ danger should also be considered closely by a manager.
Challenges in Implementing a Global alliance
An environment that is extremely competitive poses a threat to global alliance implementation. Several alliances have been unsuccessful due to unhealthy competition or when a partner in the alliance starts to assimilate and to dominate others. This worsens when several systems that interlock each other are concerned as well as the outlining of complicated networks.
The type of governments in place can also hinder the implementation of transnational alliances. The failure or success of a company can be determined by the government system. Political unrest and interference within an organization can make the implementation of global alliances hard.
Steps that are followed while implementing strategies also determine the success of a venture. Business entities that participate in alliances ought to decide if to engage long or short drawn transactions. This implies that licensing ought to be one of the initial steps on the basis of the conditions that a country has in place.
Authorization, licensing, joint manufacturing, long-term sourcing, joint business venture and associations that involve equity development are critical steps in the establishment of alliance sphere. Evidently, this was seen during the McDonalds and Coca-Cola alliance. Although this alliance was informal, a long-term alliance was established in the process.
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Dunphy, J. (2012). Communicating Across Cultures. Retrieved January 9, 2014 from: http://www2.klett.de/sixcms/media.php/10/A0802153517501_Communicating_across_cultures_LHB_EB.pdf
Harris, P. R., Moran, R. T., & Soccorsy, J. (1991). Managing cultural differences (Vol. 3). Houston, TX: Gulf Publishing Company.
Kelly, J., Schaan J., and Joncas, H. (2002). Managing Alliance relationships: Key Challenges in the early stages of collaboration. University of Ottawa. Pdf
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