Globalization and its Impact on Organizational Change

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Provides an overview of the social and economic forces that have combined to reshape modern organisations creating an imperative for change and renewal. The origins of globalisation are identified, …

Provides an overview of the social and economic forces that have combined to reshape modern organisations creating an imperative for change and renewal. The origins of globalisation are identified, and the heightened anti-globalisation protest activity at the turn of the century is highlighted.

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  • 1. Globalisation – And its Impact on Organisational Change(Lecture 2, Module 1)James HuntTrimester 3 2012GSBS6120: Managing Organisational Change
  • 2. Preliminary Notes – Aspects of Change• The increasing intensity of competition on a global scale; the Japaneseascendancy in the 1980s, the technology revolution of the 1990s.• New forms of employment, and changes in organisation: Shamrock Organisations• Organisational Development• Resistance to change• Approaches to change: structural, job-design, personnel, cultural change• Restructuring and change: two time horizons – short term, long term• Transition stages in the organisational change process: denial, resistance,exploration, commitment.
  • 3. Lecture OutlineModule 1: Background – Globalisation and its Impact on Organisational ChangeModule 2: Forces for Change - Hyper-competitiveness and Organisational ChangeModule 3: Four Frames for Understanding Change in Organisations.
  • 4. Globalisation – What Does It Mean ?Most definitions centre upon economic aspects of globalisation.But globalisation has many dimensions worth considering, because all of theminfluence and shape our organisations:– Socio-cultural dimensions: language, culture, value systems– Political dimensions: rules of national and international governance– Legal dimensions: international commercial law, patents, intellectual propertyrecognition.– Financial dimensions: currency controls, financial regulations, capital flows.
  • 5. Globalisation – What Does It Mean ?Some aspects of globalisation are relatively benign and free fromcontroversy:– The global postal system– The global airline systemOther aspects of globalisation are increasingly being disputed in terms ofwhether the benefits derived outweigh the costs incurred.
  • 6. Globalisation – A Brief HistoryThe beginnings of globalisation are very much a matter of debate and conjecture,depending upon one’s preferred time-horizon.Were the first real steps towards globalisation taken by imperial Rome? At the heightof its power, Rome’s influence in culture and commerce permeated much of the knownworld.Did globalisation begin in the 16thcentury with the first great expansion of Europeancapitalism, following the circumnavigation of the world?Some economic historians point to the sizeable expansion in world trade andinvestment in the late nineteenth century, before WWI and the Great Depressionintervened.Others have argued that globalisation really began in earnest between 1875 and 1925with the time zoning of the world and the establishment of the international dateline(and the near universal adoption of the Gregorian Calendar).
  • 7. Globalisation – When did it Begin?Some analysts view globalisation as a process beginning at the end of WWII. Thisperiod saw a significant expansion in the flow of investment capital, and theemergence of multinational corporations – looking to produce and sell in domesticmarkets in many countries around the world.Those with a more immediate time horizon, see globalisation’s direct origins gainingmomentum at one of the following points:– 1980: Japan begins its ascendancy as host nation to a number of significantmultinational corporations.– 1989: The fall of the Berlin Wall & the collapse of Communism: The apparenttriumph of Western capitalism, entrepreneurship, and the concept of creativedestruction.– The 1990s: The dawning of the information age: personal computers, widespreaddigitisation of information, the rise of Microsoft and the ubiquity of its products.
  • 8. Globalisation – Advantages & ChallengesProponents of the globalisation of world trade argue that intellectual, cultural andeconomic progress is dependent upon the relatively free flow of commercial activity.They argue that globalised trade and investment has the potential to raise thestandards of living of all those involved in the process; providing poorer countrieswith access to superior infrastructure and living standards; cleaner water, bettereducation, improved literacy levels, and better medical care.Proponents of globalisation also argue that globalisation as a process ismisunderstood by those who oppose it, often dismissing the protesters as a loosecoalition of misguided loony left radicals .Many proponents further argue that globalisation is here to stay, and that thoseprotesting against it are simply wasting their time and disrupting sensible debate withtheir civil disobedience.
  • 9. Globalisation – Protest Groups & their AgendasOpponents of globalisation have become more prominent and vocal, as well as morepersistent – particularly between 1999-2003, as globalisation itself became more real,more pervasive and more recognisable.In particular, the privatisation of government-owned entities (banks, airlines, railsystems, telecommunications companies, electricity suppliers) in many countriesaround the world, has produced visible shifts in pricing patterns of these services,angering large numbers of consumers.Industrial activity on the world stage has provided graphic examples of pristineecosystem despoilation, adding fuel to the cause of groups such as Greenpeace, andFriends of the Earth.Others have expressed concern over apparent exploitative labour practices in thirdworld countries, choosing to rally against globalisation as the driver of corporatemercenary behaviour.
  • 10. Globalisation – Who are the Protesters?ANTI TRADE ACTIVISTS:Predominantly concerned with the socio-economic dimensions of globalisation:They object to what they see as the exploitation of workers in poorer, lessdeveloped countries.The International Forum on Globalisation is one such body which bears thehallmarks of an anti-trade activist group.These groups argue that developing countries are trapped in a ‘race to thebottom’, locked into abusive labour practices, poor environmental quality andpoverty-cycle wages.They argue that sweatshops do not represent a genuine economic opportunity forlabourers.From a social justice perspective, these arguments are deontologically valid – butcan be refuted along the lines of relying excessively on an “advanced nations”perspective of labour conditions, and for their reliance on emotive, altruisticpersuasive devices.
  • 11. Globalisation – Protest Activity
  • 12. Globalisation – Who are the Protesters?ENVIRONMENTAL GROUPS:Are extremely active in the campaign against the unrestrained advance ofglobalisation.Their central claims are that globalisation has a short but irrefutable history ofharming the environment.These groups generally lay the blame on global corporations for global warming,the depletion of natural resources, large-scale industrial accidents; Bhopal,Exxon-Valdez and the Gulf of Mexico oil disasters, the manufacturing of harmfulchemicals, and the degradation of organic agriculture.They view the damage that is done to the environment by large MNEs as theeffect of externalised cost. Businesses do not currently bear the full cost ofproduction in their commercial activities – a portion of the cost is borne by a thirdparty. Eg: Air pollution from factories, forest depletion by logging companies.These interest groups have had some success in changing corporate behaviour;DuPont (responsible for the production of 25% of the world’s CFCs).Motorola (recycles its rinse water used to clean pc boards).
  • 13. Globalisation – Protest Activity
  • 14. Globalisation – Who are the Protesters?LEFT ORGANISATIONS:Are highly suspicious of the unrestrained advance of capitalist models of business– largely because of the narrow perspective these models adopt.They argue that free enterprise needs regulating by an independent body,otherwise the pursuit of profit will override other more important societal concerns.These groups (along with non-leftist economists) challenge the actions of nationaland world governing bodies, including the WTO, the IMF, and the World Bank,along economic policy lines.
  • 15. Globalisation – Who are the Protesters?LEFT ORGANISATIONS:Their predominant concerns seem to centre on the growing acceptance of higherlevels of unemployment in the advanced nations.They argue that high unemployment is an unacceptable waste of per capitaproductivity, and that sound economic management would contain unemployment atmuch lower levels than are currently acceptable.In the 1980s and early 1990s, these kinds of views were dismissed by many asirrelevant. More recently, however, these perspectives are being taken moreseriously by moderate, non-leftist economists and business analysts.In 2001, Joseph Stiglitz, former World Bank Chief Economist, vehemently criticisedthe imprudent role played by the IMF in the 1997 Asian Economic Crisis, forexample.
  • 16. Globalisation – Protest Activity
  • 17. Globalisation – Heightened Protest Activity: 1999-2003Protests against globalisation escalated significantly between 1999 and 2003:Seattle, December 1999: 40,000 protesters took to the streets rallying againstthe World Trade Organisation. Skirmishes with police eventuated.Davos, February 2000: At the World Economic Forum a McDonalds store isviolently trashed.Washington, April 2000: A massive blockade by protesters threatens to disrupttalks at the World Bank and the IMF meeting, eventually causing lengthy delaysas delegates are initially advised of the danger of the hostile crowds.Prague, September 2000: A clash eventuates between 12,000 protesters andauthorities, again threatening to disrupt the World Bank-IMF annual meeting.Melbourne, September 2000: Activists barricaded delegates to a WorldEconomic Forum conference, again disrupting parts of the meeting.Nice, December 2000: Disruption of a European Union summit.
  • 18. Globalisation – Protest ActivityDavos-Zurich, January 2001: The World Economic Forum Meeting has to belocked down: Zurich gets trashed in the ensuing rampage.Naples, Italy, March, 2001: Thousands of anti-globalisation protesters clash withriot police. More than 100 people are injured in the violence.Quebec City, April, 2001: At the Summit of the Americas, tear gas and watercannons are used to control protesters.Barcelona, June 2001: World Bank cancels conference as activists stagemassive protests.Gothenburg, June 2001: Although 40,000 held a peaceful march, a core ofmasked anarchists wielding cobblestones created bloody mayhem at theEuropean Union summit in the Swedish port city.Genoa, Italy, July 2001: More than 500 people are left injured and one dead aftertwo days of intense clashes between riot police and anti-globalisationdemonstrators.Washington DC, September 27, 2002: IMF and World Bank summit marred byanti-globalisation protests.Cancun, Mexico, September 14, 2003: Fifth Ministerial Meeting of the WTOcollapses.
  • 19. Globalisation – Questions for the FutureIs globalisation, as some have argued, neither inherently bad, nor inherently good,but merely an emerging system requiring the management of a diverse set ofinterest groups and national agendas?Is globalisation being driven predominantly by multinational corporate interests, orrather, is it driving organisations to change and respond to new patterns ofcommercial and social activity?Can international economists effectively manage the process of globalisation, or isit really beyond the control of anyone, including the so-called global titans? Thisargument is advanced by Thomas Friedman in The Lexus & the Olive Tree. Acounter argument is provided by John Pilger in The New Rulers of the World.
  • 20. Some Further Reading:• Hunt, J. (2003) Chapter 1: The Anatomy of Organisational Change in theTwenty-first Century. In Wiesner, R. & Millett, B. (Eds.), Human ResourceManagement: Challenges and Future Directions, John Wiley, Queensland.• Semler, R. (1989) ‘Managing Without Managers’, Harvard Business Review,Vol. 67, Iss. 5 (September-October): 76-84.Thank You for Viewing these Slides