To compete aggressively firms must make considerable investments overseas- not only capital investment but also investment in well-trained managers with the skills essential to working effectively in a multicultural environment. In any foreign environment, managers need to handle a set of dynamic and fast-changing variables, including the all-pervasive variable of culture that affects every facet of daily management. Added in the behavioral software is the challenge of the burgeoning use of technological software and the borderless internet, which are rapidly changing the dynamics of competition and operations.
Global management, then, is the process of developing strategies, designing and operating systems, and working with people around the world to ensure sustained competitive advantage. Those management functions are shaped by the prevailing conditions and ongoing developments in the world.
Business competitiveness has now evolved to a level of sophistication that many term globalism-global competition characterized by networks that bind countries, institutions, and people in an interdependent global economy. The invisible hand of global competition is being propelled by the phenomenon of an increasingly borderless world. As described by Kenichi Ohmae, “The nation-state itself-that artifact of the eighteenth and nineteenth centuries-has begun to crumble, battered by a pent-up storm of political resentment, ethnic prejudice, tribal hatred, and religious animosity.
As a result of global economic integration, extrapolation of current trends wills lead to world exports of goods and services. t is clear that world trade is phenomenal and growing and, importantly, is increasingly including the developing nations.
Almost all firms around the world are affected to some extent by globalism. Firms from any country now compete with your firm both at home and abroad, and domestic competitors are competing on price by outsourcing resources any where in the world. It is essential, therefore, for managers to go beyond operating only in their domestic market because by doing so they are already behind the majority of managers who recognize that they must have a global vision for their firms and that vision starts with preparing themselves with the skills and tools of managing in a global environment. Companies that desire to remain globally competitive and to expand their operations to other countries will have to develop a top management cadre who have experience operating abroad and who understand what it takes to do business in other countries and to work was people in and form other cultures.
As another indicator of globalism, foreign direct investment has grown more than three times faster than the world output of goods. The European Union (FU) has now caught up with the United States to...