Question

What you see as the challenges of globalization. Make sure that you mentioned at least three challenges and pick one of those challenges to go further in depth. Mention an organization that struggled within their globalization strategy and explain exactly why they failed. Additionally, you need to explain why the cultural, legal, political and economic systems will be different from one part of the world compared to another part of the world. When explaining this it is imperative to show statistical numbers such as GDP. Finally, explain what you expect to learn by the end of this course and what challenges you might face if you had to be a leader in globalizing your organization tomorrow.

Answer 1

Three challenges of globalization are as following:

1. Increased competition and productivity and efficiency of operation for domestic firms
2. Instability among smaller economies
3. Saving world from being a market place of few big companies that promotes digital and income divide

As far as globalization is concerned, it deals with the international trade among the economies. It opens the door for big MNCs to enter in to smaller countries that have industries in nascent stage. Industries of these economies have to compete with the product line of those MNCs who have big capital, superior technology and better human resource. Thus, local players are simply outplayed in comparison to them. Some of the local players survive as they are better prepared against new entrants.

Thus, globalization causes the increased competition. It has goods for the consumers but central agencies should draft policies to protect the interest of local industries.

There is a handicraft textile company that could not compete with the MNCs due to fundamental difference. MNCs are capital oriented with better technology that gives better textile products. But, the given handicraft textile company is labor intensive company with not so superior machinery. It works against their favor.

Human civilizations are developed differently in different parts of the world over a period of time. It has caused development of different culture, values and beliefs that differ from each other. Also, each part of the world varies in natural resources, manpower and development process. It shapes and reshapes their economy. That’s why countries differ in terms of culture, GDP, and economic policies. Bigger economies with bigger resources will have bigger output and vice versa.

As an organization leader, biggest challenge for me will be to make my organization ready for the challenges possessed by changing business environment due to globalization. I will adopt emergent change management strategy to make my organization ready for all the challenges.

References:

1. Arteta, Carlos, Barry Eichengreen and Charles Wyplosz (2001). “When Does Capital Account Liberalization Help More Than It Hurts?”, NBER Working Paper 8414.
2. Ben-David, Dan (1993). “Equalizing Exchange: Trade Liberalization and Income Convergence,” Quarterly Journal of Economics, 108 (3).
3. Bourguignon, Francois et al (2002). Making Sense of Globalization: A Guide to the Economic Issues, Centr for Economic Policy Research, London, CEPR Policy Paper No. 8