Effects of Globalization
Factors that drives the need for Globalization: Basically the three forces are widely known to steer the wheels of economic integration: (I) human migration; (II) application of trade of both goods and services ;( III) Movement of capital resource within the market arena. Human Migration; since time immemorial man has always been known to move around, majorly by of footing. It’s argued that man decided to move out of Africa so as to settle in the Eurasian landmass of North America and Asia. This movement brought with it platforms for interactions and different levels of societal integration. Factors such as the use of technological tools of that time facilitated this force of globalization. The technological advancement of the time was presumably the use of horses and other beasts of the wilderness. These societies also deployed the mechanism over which public policies were lessened so that there was a smooth way of conducting the trade. In modern times, the factor: human migration can be depicted in mass migrations that have commenced to occur out of wars and subsequent political commotions. Some individuals have been perceived to migrate due to economic reasons that affect them in their countries of origin. This has, in turn, steered globalization of the world as a whole.
Applied trade of both goods and services: this is taken to mean the easier movements of certain factors of production amongst national economies. The resultant improvements in the technology of transportation, as well as communication, acted towards bringing globalization to a point over which it is today. Artificial barriers of trade were minimized to a level that promoted easier movements of goods and services within boundaries of different neighboring countries. Capital movements in between financial markets: it’s true to bring to light that the capital markets in countries that are said to be developing are perceived to be integrating with the rest of the same financial markets in the world. With the recent advancements in technology, the most priced capital assets have constantly been sold to different bidders placed in different parts of the globe. This successive use of capital markets has been used extensively to drive economic integration of all interested countries of the globe.
The Role that Technology Plays to enable Globalization: Technology or as it is called nowadays, ICT, has immensely facilitated globalization as a whole. For instance, it has formed the major stamina for various business industries which ranges from, banking, airlines and manufacturing. Technology has also been considered to integrate crucial factor of consumer products that include: cars, mobile phones and television sets. Through computers and other technological gadgets, participants have successfully conveyed messages in and out of their localities at a very affordable cost. The use of technology has evidently increased the rate at which international business companies has applied the updated modes of operations, the division of labor and the improvisation of production processes. All in all, the use of technological advancements has facilitated the emergence of a new era of both managerial and productivity innovations which have in turn assisted the improvements evident at various levels.
Two Potential Benefits that Globalization Offers to Companies: The two potential benefits are: (I) an improvement in the way organizations make their important and essential decisions (II), a better way over which to attain and manage the already set rules and regulations. Having looked at the way ICT influences globalization, it’s arguably right to indicate that organizations that have embraced economic integration are able to deploy different tactics learned during their ensuing interactions with other larger and well-established organizations. In their continued urge for comparison, organizations are able to set goals that are easily attained as well as try to set realistic objectives for their respective companies which in itself steers the attainability of high levels of performance.
Two Types of Risk Associated with Globalization: There are basically two well-known risks that are attributed to globalization, that is, Political risk and Economic Risk. Political risks refer to those perils that affect the growth of economic integrations at a political level in that politics decides the order of the day so that commerce and informational conveyance between two economies is termed paralyzed. Better examples of political risks are war and acts of terrorism. An economic risk refers to a peril that acts towards paralyzing the value of different stocks invested upon by individuals. When the economy is at its lowest point, international investors are always on the verge of sinking with their investments. Good examples of an economic risk are inflation and the devaluation of currencies.
Organizational Change: It’s a normal phenomenon for organizations to undergo changes that is either meant for positivity or negativity of the issue at hand. Its considered important for organizations to undergo this changes so that they can survive and also retain the element of significance that the aforementioned organization has, particularly on competition, scientific upgrades and the ever-changing advancements in communication criteria. Organizational change refers to any noticeable shifts of actions that are meant to affect the way organizations operate their day to day activities. This change is sometimes considered to be deliberate meaning that there was no control over its happening while other changes are planned for as organizations effect it to meet certain goals set by decision makers. While some changes are considered small others are large but the fact of the matter remains that whatever the level of change, there is still considerable shifts in the application of strategies. The planned approach of change acts to assure the organization of its survival in the ever-changing market. External forces such as competition and intense demands by customers bring about positive results such as better service as well as products innovations. While change is meant for the first-rate productivity of the organization some individuals may fall victims of the same so that their jobs are eliminated or rather restructured to fit in with the new demands of the industry. An organizational change is always meant for the betterment and strength of the organization as a whole. The two types of pressures that drive organizations to change are: (I) the need for performance improvements and (II) the need for cutting costs. When organizations decide to embark with plans that will facilitate the maximization of wealth, then they have to change for the better so that a criterion upon which set objectives are met and executed well. Departments that are considered poorly run are cut out and replaced with better-performing ones. In order to cut costs, organizations embark on replacing old and costly techniques with advanced ones, for instance, an organization that stored its database manually will have to scrap off the job of the book-keeper when a new technology is embraced. At a wider depth, there are many reasons why employees resist change but the three major ones include: (I) the employees claiming that they were not aware of the fundamental need for the organizational change at hand, (III). rumors that there were to happen layoffs make employees embark on fearing change, (III) employees, at hand, perhaps feel unsecure for their skills in that they feel they do not possess the required skills over which they could use to commence with their careers. In order to manage change, effectively, managers are required to not only build relevant supports for the change but also determine the exact context for the same. They are also expected to come up with mentoring visions and objectives so that employees are encouraged to understand the need for change. I feel that Starbucks has to embrace the new advancements in technology in roasting its coffee so that in the long run their coffee is well received by customers, failure to implement this may mean that the organization might as well lose a substantial amount of customers that it may, in turn, lead it to close its operations and termed as a failed organization.