Globalization

ABSTRACT

The human society around the world, over a period of time, has established greater contact, but the pace has increased rapidly since the mid 1980’s.The term globalization means international integration. It includes an array of social, political and economic changes. Unimaginable progress in modes of communications, transportation and computer technology have given the process a new lease of life. This paper is an attempt to outline the growth of Indian economy, effects, culture, technology, driving force and transformation that India is going through due to globalization, liberalization and privatization.

INTODUCTION

The world is more interdependent now than ever before. Multinational companies manufacture products across many countries and sell to consumers across the globe. Money, technology and raw materials have broken the International barriers. Not only products and finances, but also ideas and cultures have breached the national boundaries.
The concept of globalization was first introduced by Adam Smith, the father of modern economics in the year 1776 through the book titled, “Wealth of the Nations”, and since then the globalization has been liked yo-yo.

In the days of yore, British, Chinese, Indians and Mughals were involved in global business. The Chinese used to sell silk to the world and buy dynamites. The British used to come to India to buy condiments and in return India used to buy ammunition.

So, the point is that - globalization is not a new concept. In the good old days, globalization even more prevalent because Indian spices, silk handicrafts, gold, silver jewelry, etc., were ubiquitous everywhere in Europe.

GLOBALIZATION – GROWTH OF MNC’S

According to Guy Brainbant, the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNC's, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution. These processes are being driven by a combination of economic, technological, socio-cultural, political and biological factors.

Growing interconnections brought about by this process requires that both managers and organisations expand on traditional repertoire of roles. For organisational leaders as well, the challenge is to manage tradition and change. . Global firms take shape by borrowing best practices and new ideas from multiple cultures, but they must at the same time create an internal culture that infuses unity and provides direction.

Thus, global management skills and competencies are integral to all organisations. The most important competencies in handling it are –

1. Managing Self & across culture
2. Managing Communication
3. Managing Diversity
4. Managing Teams
5. Managing Change
6. Managing Ethics

Managing Self and Across Cultures

Globalisation has caused cultures of different nations to interact with each other. This heterogeneity has brought about changes in the organisational culture. However, such interactions can sometimes lead to cultural clashes if not handled delicately. At the individual level also, it may become evident when people from different cultures work with each other. Thus in this light managing, perceiving, appraising, and interpreting accurately oneself, others, and the immediate environment is very necessary. This in turn equips us with the ability to recognize and embrace similarities and differences among nations and cultures and then approach key organizational and strategic issues with an open and curious mind.

Example- Indians on a professional call accept gifts whereas Japanese consider gifts as an offence. Culture also frames our sense of right and wrong. Most cultures interpret behaviour depending on their own cultural frames. This can lead to cultural misunderstandings.

Managing Communications

Communication is an inevitable tool of globalization. In a global environment a company will have its own branches, franchisees or even an outsource partner in another country. The distance between the two countries might be large but because of advancements in the field of communication the decisions are taken and implemented simultaneously and therefore efficiency of the company increases.

Cross-cultural communication is a very important aspect of modern day businesses. The people of various countries have various cultures and languages. There are mainly two types of communication:

a) Verbal communication- It is mainly language based that is communication by speaking

b) Non-verbal communication- This include the body language and the speed of communication. It has maximum importance when it comes to cross cultural communication.

Example:- The Koreans exchange business cards even before they sit down but in Switzerland, there is no set time for exchanging business cards. Koreans greet by bowing while the Swiss do so by shaking hands. Swiss like to have direct eye contact while the Koreans use indirect eye contact.

There exist many barriers to cross cultural communication the major being, the physical barriers. These may arise due to differences in nationalities, skin colour etc. The onus lies with the managers to discourage such barriers in communication.

Managing Diversity

Today multi-national companies are keen on developing diverse human resource pools to transform themselves into true global organisations. The top leaders are passionate about this initiative because ideally diverse workforces make organisations alert and responsive. Moreover, such a workforce can always come with spectacular innovations. However, managing a diverse workforce is always a challenge, which has to be tackled effectively. Many leading organisations have taken excellent initiatives in this regard by:

a) Re-examining their traditional ways of functioning
b) Seeking value similarities and differences as sources of competitive advantages
c) Training people for skills that enhance a sense of inclusion.

Example:- For a certain project, Sun Microsystems had formed a team of 35 engineers, at their headquarters. These engineers hailed from 11 different nations. Some of these technical experts were not well versed with freewheeling culture of Silicon Valley.

For example, many of the Asian engineers could not tolerate conflicts and criticisms in meetings. Khans h Vu, the manager of this team, had the challenge of making these individuals function as one team. Vu formulated a strategy through which functioning of a team could be made smoother. He made the group realise that some of the topics are culturally sensitive and thus, should not be discussed in any conversation. However, it was made very clear to the team that work related opinions and criticisms should be taken in a positive way.

Marketing initiatives also need to be examined carefully for their globalization potential. A truly global marketing strategy would aim to standardize some elements of the marketing mix across the world, while customizing others. The correct approach would be to identify the various value chain activities within the marketing function and decide which of these can be performed on a global basis and which can be localized.

The following statement of Toyota about globalisation substantiates the same “Our global strategy used to centre on “world cars, “which we would modify slightly to accommodate demand in different markets. Today our focus is shifting to models that we develop and manufacture especially for selected regional markets.”