Global Organizations: Emergence and Challenges

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GLOBAL ORGANIZATIONS: EMERGENCE AND CHALLENGES

Subject: Term Paper of Organization Management

Written By:
Fernando Galicha
Entry No: 2010SMF20901

TABLE OF CONTENTS

NEED FOR GLOBAL ORGANISATIONS……………………………………………...3

CHALLENGES FOR GLOBAL ORGANIZATIONS……………………………………4

DEVELOPING GLOBAL MINDSET……………………………………………………6

KNOWLEDGE MANAGEMENT IN GLOBAL ORGANISATIONS………………..…7

FLEXIBILITY IN GLOBAL ORGANIZATIONS……………………………………….7

References…………………………………………………………………………………8

NEED FOR GLOBAL ORGANISATIONS

From the last two decades with the advancement of technology the globe has become getting smaller and smaller. Needs of one part of the globe are being catered by another part. In this era of globalization organizations sell products and provide service to international customers in different countries. And the maintenance of the product sold or service provided throughout the lifecycle of the product/service requires the system to be globally well acquainted. As such organizations have to set up globally distributed service to serve the customers based on different business needs. A commercial organization decision to setup multiple organizations spread throughout different regions depends on the global business needs.

The business needs which require setting up of multiple service organizations can be very diverse and may deal with different aspects such as:

Linguistic requirements of consumer market:
Linguistic aspects play a major role in affecting consumer behaviour. A central service organization serving customers throughout the world may not have service staff which can communicate effectively with customers which are based in foreign countries and speak local languages. Hiring local service staff with multiple language capability may not be a cost effective option. In this case, setting up service organization in the regions where local service staff can be hired at a reasonable cost is a good option.

Cultural diversity of the consumer market:
Different regions have their own culture of doing business dealings. Customers based in some regions are more comfortable in dealing with service staff which understand and practice their own way of doing business very well.

Service delivery requires frequent onsite visits:
It is not always possible to serve the products remotely depending on the nature of product or provide guidance for a service. In many occasions, providing service requires the visit by a service staff to the location where the sold product/service exists. In case of adopting a single global service organization, the cost of dispatching service staff to the location of the product may be too costly for both customer and the commercial organization. Urgent visits may involve international travel arrangements which may make it impossible to meet the deadline for completing the service as described in the service level agreements between the customer and the commercial organizations. In such scenario, it is common to have distributed service organizations in different regions which acts like a single virtual organization.

Customers are based in different time zones:
A single centralized service organization may not be able to serve customers based in different time zones due to the high cost of setting up 24 hours service organization using multiple shifts by the employees. It is sometimes more cost effective to setup a service organization which operates in the local time zone making it cheaper and easy to use the local resources.

Requirement of better visibility in the local market:
Setting up local service organization which employs local staff gives a better visibility to a commercial organization in the local markets, sometimes compensating the high cost of hiring local staff. Such local visibility also increases the chances of growing with the local market. Local visibility also helps increase the business transactions volume with the public sector. Local...
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