Globalization-and-its-impact-on-organization.pptx

it will impart knowledge regarding what is globalization and how it affect organization

1. GLOBALIZATION

2. Topics to be covered: What is globalization and its effects on organizations? Managing global organizations. Classic concepts in today’s workplace. Making ethical decisions in today’s workplace.

3. GLOBALIZATION AND ITS IMPACT An important issue that managers face is globalization. Globalization is the trend, which has increased significantly over the last two decades, of companies operating almost anywhere in the world. Managers need to adapt to be successful in this global environment and continue to foster an understanding of cultures, systems, and techniques that are different from their own.

4. GLOBALIZATION Globalization means “International Integration“. It is the process of unification of the whole world, which can be in terms of: Economic unification Social unification Cultural unification Technological unification and much more………

5. GLOBALIZATION Global village - boundaryless world where goods and services are produced and marketed worldwide Global Exchanging goods and services with consumers in other countries Using managerial and employee talent from other countries Using financial sources and resources outside home country

6. History of Globalization Globalization is not new phenomena. For thousands of years, people and civilizations have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road The advent of globalization can be divided into 3 eras : Pre-World War Era During World Wars Post world War Era Note : Globalization paced up after the World wars

7. Organization A group of 2 or more people who work together in a structured way to achieve a specific set of goals. For example -: a musical group, a cricket team or a civic organization etc. What is a Goal ? Purpose that an organization strives to achieve. It can vary from entertaining an audience to selling a product – depends on the organization

8. Types of Global Organizations Multinational corporation Any type of international company that maintains operations in multiple countries. MNC has three types; Multidomestic corporation Transnational organization Global corporation

9. Types of Global Organizations “Which product is right for you?” Multidomestic corporation: An MNC in which management and other decisions are decentralized to the local country in which it is operating. Rely on local employees to manage the business. Tailor strategies to each country’s unique characteristics. Used by many consumer product companies.

10. Types of Global Organizations “We don’t want people to think we’re based in any one place.” Transnational (borderless) organization: An MNC where artificial geographical boundaries are eliminated. Country of origin or where business is conducted becomes irrelevant. Increases efficiency and effectiveness in a competitive global marketplace.

11. Types of Global Organizations “This decision we’re making at headquarters has company-wide, world-wide implications.” Global corporation: An MNC in which management and other decisions are centralized in the home country. World market is treated as an integrated whole. Focus is on control and global efficiency

12. HOW ORGANIZATION GO GLOBAL When organizations go global, they often use different approaches, as we see here. Managers who want to enter a global market with minimal investment usually start with global sourcing(also called global outsourcing), which means purchasing materials or labor from the cheapest source in order to maintain a competitive edge. Moving beyond global sourcing involves more investment and risk for the organization. Exporting and importing entail less investment and risk than other steps in globalization.

13. What Do Managers Need to Know about Managing in a Global Organization? A global world brings new challenges for managers, especially in managing in a country with a different national culture. Parochialism is a narrow focus in which managers see things only through their own eyes and from their own perspectives; they don’t recognize that people from other countries have different ways of doing things or that they live differently. “ A person with a parochial attitude cannot succeed in today’s world.”

14. How Globalization effects Organizations ? The advent of Globalization has entirely changed the way in which an organization performs. Some of these are: Change in Planning strategy Change in Leadership strategy Change in Structure The various factors which resulted in these changes are: Cross cultural differences Workforce diversity Availability of level playing field Emergence of global managers

15. Changes In Planning Going global requires “an assessment of your plans”. There isn’t a ‘one-size-fits-all‘ strategy Every business requires approaches that should be backed by logic careful planning realistic assessment of capabilities For example: Case of Apollo International in China (2002)

16. Changing In Leadership Emergence of Global Managers Global Manager : A manager who can understand and respond to the needs of International Business Key attributes of a Global Manager: Geocentric mindset Sensitivity to different cultures Mental toughness Thorough understanding of company's corporate purpose Interpersonal and communication skills Willingness to travel frequently Selection of a manger depends on the type of market also. Emerging markets  Flexibility, entrepreneurship Large markets  Strong public relations skills Slow growing markets  methodical approach, analytical

17. Cultural & Workforce Diversity Culture : acquired knowledge used to interpret experience and generate social behavior ; it is acquired by learning and experience workforce diversity : Similarities and differences among employees in terms of age, cultural background, physical abilities and disabilities, race, religion, sex, and sexual orientation. Difficulties in policy designing & implementation Dimensions of Organizational Culture given by Geert Hofstede: 1.) Power Distance 2.) Individualism 3.) Uncertainty avoidance 4.) Masculinity

18. Managing in a Global Organization One of the most influential approaches to analyzing cultural differences among countries was developed by Geert Hofstede  in the 1970s and 1980s.Hofstede surveyed more than 116,000 IBM employees in 40 countries about their work-related values and found that managers and employees vary on five value dimensions of national culture:

19. Hofstede's Five Dimensions of National Culture Power distance, which is the degree to which people in a country accept that institutional power is distributed unequally Individualism versus collectivism, which is the degree to which people in a country prefer to act as individuals or as members of groups. Quantity of life, which values assertiveness, materialism, and competition, versus quality of life, which values relationships and sensitivity and concern for others’ welfare

20. Hofstede's Five Dimensions of National Culture 4. Uncertainty avoidance , which is the degree to which people in a country prefer structured over unstructured situations and whether they are willing to take risks. 5. Long-term orientation,  which is the degree to which people look to the future and value thrift and persistence, versus short-term orientation , which  is the degree to which people value the past and present and emphasizes respect for tradition andfulfilling social obligations.

21. GLOBE Project GLOBE stands for ‘ Global Leadership & Organizational Behavior Effectiveness ‘ – a cross cultural research effort. Conceived by Robert J. House in 1991, GLOBE involves : 170 ‘country co-investigators’ 62 Societal cultures & 10 Societal Clusters Collection of data from 17,300 middle managers from 951 organizations 27 research hypothesis were tested 3 phases of GLOBE research project : Phase I - the development of research instruments Phase II - assessed nine cultural dimensions, of both societal and organizational cultures & their impact on societal cultures Phase III - Study of effectiveness of specific leader behaviors on subordinates’ attitudes and performance. 

22. Societal Cultures & Clusters Societal Cultures - All the business-oriented societies ranging from Albania to Zimbabwe are divided into 62 groups Further grouped into 10 Societal clusters Anglo – 8 Latin Europe – 6 Nordic Europe – 3 Germanic Europe – 5 Eastern Europe – 8 Latin America – 10 Sub-Saharan Africa – 5 Middle East – 5 Southern Asia – 6 Confucian Asia - 6

23. Standards Of Measurement 9 Cultural Dimensions : Performance Orientation Uncertainty Avoidance Humane Orientation Gender Egalitarianism Future Orientation Power Distance Institutional Collectivism In-Group Collectivism Assertiveness conceptualized in two ways:  practices  or “as is,” and  values  or “should be.”  

24. Ethics Ethics commonly refers to a set of rules or principles that defines right and wrong conduct. While most people recognize that something illegal is also unethical, what about questionable “legal” areas or strict organizational policies? Suppose you managed an employee who worked all weekend on a rush project. You told the employee to take two days off sometime later and mark the days as “sick days” because your company had a clear policy that overtime would not be compensated for any reason. Would that be wrong? As a manager, how will you handle such situations? To better understand what’s involved in managerial ethics, let’s look at three different perspectives on how managers make ethical decisions.

25. The utilitarian view of ethics says that ethical decisions are made solely on the basis of their outcomes or consequences. The goal of utilitarianism is to provide the greatest good for the greatest number of people. In the rights view of ethics , individuals are concerned with respecting and protecting individual liberties and privileges such as the right of free consent, the right to privacy, and the right of free speech. Under this view, making ethical decisions is simple because the goal is to avoid interfering with the rights of others who might be affected by the decision. Lastly, under the theory of justice view of ethics , an individual is equitable, fair, and impartial in making decisions. For instance, such a manager would pay individuals of similar skill, performance, or responsibility level the same wage and wouldn’t base that decision on gender, personality, or favoritism.

26. Determines Ethical Behavior Morality Values Personality Experience Organization's culture Issue being faced