Importance of Globalization
Globalization refers to the expansion of the local businesses or economies into international or broader market. Through the mobile technology and internet, even the small companies have penetrated into the global environment since communication between countries and continents has been enabled (Bae & Rowley, 2001). Globalization of organizations or businesses is necessary because of the need of competition of companies. Because of the globalization of organizations, the world of business has been transformed entirely over the past few decades (Wiersema & Bowen, 2008). Local economies in various countries have been internationalized with citizens of different nationalities trading shares with each other across different countries in the world. Business has been diversified and made accessible to different cultures selling their produce. The intercultural business has led to integration and clear understanding of various cultures in the world. Interestingly, globalization has gone beyond its economic roots and has penetrated into social issues such as national security, human rights, and environment (Dunning, 2002). Organization globalization of today comes with their governance structures.
Approaches to Globalization
Information Technology
There are several approaches to organization globalization. Information technology has most influenced the parameters of most economies. Indeed the transformation of the world from the industrial era to the information age has led to the restructuring of the business environment, establishing of economic institutions putting in place macroeconomic system (Carr & Chen, 2002). With the internet, business firms can easily integrate the marketing and production of goods across borders. The business transactions which were initially conducted between local entities are now internalized within a multinational corporation or a substantial single regional firm. Thus, small organizations have been made big. The collapse of space and time information technology has kicked out the physical market and replaced it with the virtual market of the internet (Dale & Robertson, 2002). The existence of information technology has precipitated a significant facelift in the structures of the organizations. Against the hierarchical and rigid structure which existed during the industrial era, information technology has brought a more horizontal, flexible and integrated model in the workplace.
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Trade Liberalization
In the modern world, most countries have endorsed the idea of trade liberalization and signed on the economic rewards that come with it. Many countries have put in place policy commitment towards protectionism. The modern world envisions a global economy which promotes a free trade environment which in turn encourages trade across the world without any hindrance (Kose, Prasad & Terrones, 2003). In this light, the current state of the global trade promotes a robust agenda which not only includes payments and trade but the broad gamut of world transactions which create a competitive and stable business environment. The high volume of the capital flows has enhanced reliance on the international markets coordinating the demand and supply of the foreign exchange (Crane & Matten, 2016). As several countries adopted the idea of eliminating exchange restrictions, they created enabling conditions which are the conducive environment for international markets.
Entrepreneurship
Jenkins (2005) observes that innovation is what underlines the value of the enterprise to the business society. Entrepreneurship significantly engines growth and contributes to the wealth and resources of a country. There is a definite difference between entrepreneurship and management. While the manager has confined and limited static responsibilities in the daily operations of an organization, an entrepreneur is envisioned an economic opportunity (Stohl, 2008). An entrepreneur has more dynamic functions which include risk-taking, trying new concepts and new methods of doing business as well as production methods. In other words, a manager works on a company which has already been founded and established while entrepreneurs create corporations (Naor, Linderman, & Schroeder, 2010). On the face of many challenges, entrepreneurship has been of great significance. The private sectors have served as the engine of the world's economic growth. New ideas, innovations, directions have changed the dimension of business at the global level.
References
Bae, J., & Rowley, C. (2001). The impact of globalization on HRM: The case of South Korea. Journal of World Business , 36 (4), 402-428.
Carr, M., & Chen, M. A. (2002). Globalization and the informal economy: How global trade and investment impact on the working poor (pp. 92-2). Geneva: International Labour Office.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization . Oxford University Press.
Dale, R., & Robertson, S. L. (2002). The varying effects of regional organizations as subjects of globalization of education. Comparative education review , 46 (1), 10-36.
Dunning, J. H. (2002). Regions, globalization, and the knowledge-based economy . Oxford university press.
Jenkins, R. (2005). Globalization, corporate social responsibility and poverty. International affairs , 81 (3), 525-540.
Kose, M. A., Prasad, E. S., & Terrones, M. E. (2003). How does globalization affect the synchronization of business cycles?. American Economic Review , 93 (2), 57-62.
Naor, M., Linderman, K., & Schroeder, R. (2010). The globalization of operations in Eastern and Western countries: Unpacking the relationship between national and organizational culture and its impact on manufacturing performance. Journal of operations management , 28 (3), 194-205.
Stohl, C. (2008). Globalization of organizations. The International Encyclopedia of Communication .
Wiersema, M. F., & Bowen, H. P. (2008). Corporate diversification: The impact of foreign competition, industry globalization, and product diversification. Strategic Management Journal , 29 (2), 115-132.
