globalization

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Chapter 4
EFFECT OF GLOBALIZATION

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LEARNING OUTCOMES
- Define and understand globalization and importance.
- Understand international management philosophy.
- Understand categories of international managers
- Expertise to be possessed by an international manager

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What is Globalization?
 Defines as free movement of goods, service and
people across the world in a seamless and
integrated manner.
 It is to increase the organization’s base of
operations, expand workforce with minimal
investments and provides new service to a broad
range of consumers
 There are two sides of Definition :
 Mainstream Approach
 Critical Approach

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Organizational Behaviour
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What is Globalization?
 Mainstream Approach: The expansion of global
market improves the efficiency and living standards
of organization. From this perspectives, organization
can use adequate rational decision making to
resolve the increasing internationalization problems.
 Critical Approach: It exposes that need to concern
the cost of globalization. A few people who have the
power to influence on the process in terms of social
power and concentration of economic . And it reveals
that how groups are struggling inside the
organization.

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Effects of Globalization
 Industrial - Emergence of worldwide production
markets and broader access to a range of
foreign products for consumers and companies.
 Financial - Emergence of worldwide financial
markets and better access to external financing
for borrowers.
 Economical - Realization of a global common
market, based on the freedom of exchange of
goods and capital.

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Effects of Globalization
 Political – Some use “globalization” to mean the
creation of a world government which regulates
the relationships among governments and
guarantees the rights arising from social and
economic globalization.
 Cultural - Growth of cross-cultural contacts;
advent of new categories of consciousness and
identities embodies cultural diffusion.

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Effects of Globalization
 Competition – To survive in the new global
business, market calls for improved productivity
and increased competition. Industries must
upgrade their products and use technology
skillfully for facing the competition and
increasing their competitive.

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Organizational Behaviour
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Effects of Globalization
 Informational - Increase in information flows
between geographically remote locations. This
is a technological change with the advent of
fiber optic communications, satellites, and
increased availability of telephony and Internet.

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Importance of Organization
Operates Globally
 Enhances the individual’s involvement with
others in different societies.
 Brings unity among citizens using common
goals and awareness.
 Leads to global cultural, political and economic
integration.
 Gives ability to move and communicate easily
with others all over the world in order to conduct
business internationally.

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Importance of Organization
Operates Globally
 Promotes teamwork and multi-culture learning
and traveling

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What is International Manager
 International management involves
understanding international economics, leading
change in international corporations and
creating global business strategies.
 It is used to conduct business in more than one
country and requires familiarity with the
business regulations and the ability to carry out
transactions that may involve multiple
currencies.

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Expertise To be Possessed by
an International Manager
 Cope with cognitive complexity and understand
variety of issues
 Should have cultural empathy
 Should have emotional energy
 Should demonstrate psychological maturity
 Cope with the diversity of demands

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International Management
Philosophies
 Ethnocentric - staffing policy that is used in
companies that has primarily international
strategic orientation.
 Polycentric - hiring and staffing method in which
international subsidiaries of a country find team
members from the host country.
 Regiocentric - international recruitment method
wherein the managers are selected from
different countries lying within the geographic
region of business.

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 Geocentric - Involves a global view of the
organization's international operations.

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Categories of International
Manager
Informational
Roles Description Example
Monitor
•Seeks out and gathers
information relevant to the
organization
•Finding out about legal
restrictions on new product
technology
Disseminator
•Provides information where
it is needed in the
organization
•Providing current
production figures to
workers on the assembly
line
Spokesperson
•Transmits information to
people outside the
organization
•Representing the company
at a shareholders’ meeting

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Interpersonal
Roles Description Example
Figurehead
•Represents the company in
a symbolic way
•Cutting the ribbon at
ceremony for the opening of
a new building
Leader
•Guides and motivates
employees to achieve
organizational goals
•Helping subordinates to set
monthly performance goals
Liaison
•Acts as a go-between
among individuals inside
and outside the
organization
•Representing the retail
sales division of the
company at a regional sales
meeting

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Decisional
Roles Description Example
Entrepreneur
•Searches out new
opportunities and initiates
change
•Implementing a new
production process using
new technology
Disturbance handler
•Handles unexpected
events and crises
•Handling a crisis situation
such as a fire
Resource allocator
•Designates the use of
financial, human, and other
organizational resources
•Approving the funds
necessary to purchase
computer equipment and
hire personnel

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