Executive Summary

Globalization has a wide range impact on various fields, including political, social, economical and cultural aspects. It is the means of bringing the world closer via the exchange of goods and knowledge. Through organizational behavior perspective, globalization influences the structure of organizations, roles of managers and interrelationship among employees. Globalization has drove greater challenges, but at the same time bigger opportunities internationally. The purpose of this paper is to discuss the challenges developed by globalization and how managers respond to those challenges. Also the main opportunities created by globalization will be analyzed, such as providing access to new technologies from around the world, which leads to improve organizations performance and increase outputs. That will be followed by the implications of globalization and how the consequences of it have affected companies that will be supported by relevant examples.

Contents

2 3 Introduction Globalization is one word stands for so many things to different people. Basically, globalization is a term involving a cycle of economic, social, technological, cultural and political changes. Furthermore, globalization has many effects on countries, including economies, social and professional life. The global world has offered free trade, global media, free movement of ideas, free exchanging of backgrounds and cultures and the ease of communication, all these are gains of globalization. Indeed, understanding and acceptance are now very valued, as people have been able to know each others. Furthermore, it is believed that globalization is the means for combating poverty and the essential of increasing the level standards.

The argument around globalization being positive or negative is an ongoing one. However those varying opinions exist, the only definite conclusion is that globalization is neither completely beneficial nor it is totally harmful to the international community as a whole.

From organizational behavior perspective, the process of globalization is when companies decided to establish themselves in foreign markets, adapting their products or services to cultural requirements of different nations. Regarding the changes of the entire structure of the workers and their behaviors in terms of the employees’ diversity.

The world has faced many changes since the world has become a global village. In fact, globalization confronts us with new challenges and provides us with great opportunities. In addition, during globalization phenomena, it is impossible to achieve economic success without respecting human rights, regarding labor diversity in organizations.

This paper discusses the impact of globalization at the business level, explaining the challenges and opportunities driven by globalization which managers might face, as well the implications of doing business globally.

4 The Challenges of Globalization Globalization is the ongoing process of greater interdependence among countries and their citizens is complex and multifaceted. Many of the problems that the critics of globalization point to are real. Some of them relate to economics. Others relate to non-economic, but no less important, aspects of life. And while some of the problems do stem from the process of global integration, others do not. Globalization business is influenced by five factors: political factor, social factor, economic factor and technological factor. Those previous factors create a lot of challenges for any organization to be a global organization. Countries’ policy is a barrier because of different policy and laws between them. That includes legislation governing the industry and trade, labor committees of the Ministry of Labor to resolve disputes between employers and employees , health and environment and standards, consumer protection associations, and finally international organizations (International Labor Organization, World Trade Organization, Amnesty International, human rights organizations, Transparency International, etc.). Second one is social factor which related to demographic environment such as age of customer, gender, number of family members, social class i.e. selling fancy cars in a poor country like Somalia, education, ethnic origins, nationality culture i.e. selling Scottish Tartan Kilts in Saudi Arabia, and finally general income. The third is economic which includes two sides, resources and pattern of consumer and the competitive environment in a specific country. If any organization wants to enter a foreigner market, it should study the number and type of competitors and overlapping and assess the strengths and weaknesses of competitors. In addition, economical field has many factors to study like supply and demand, high or low prices of goods and services, unemployment rate, exchange rates (affecting the purchasing power), high price of energy (increase in the prices of goods and services), rate of inflation (affecting the decline in purchasing power, depression (low prices for low purchasing power of consumers), economic growth, economic slowdown, and economic crisis, local and global. The last one is technology, it related to the technology’s level in a certain country and how marketing channels should be provided. The service and usage could be for the following: technology sales using credit card, technology sales via the

5 Internet, technology automatic payment (banking, government services), E-security technology, and follow-up technology clients and suppliers. An example of an organization which entered global market and still successful and survive is Stryker Corporation. Stryker Endoscopy is a division of Stryker Corporation, a global leader in the medical technology industry with more than US$5 billion in revenues and sales in 120 countries. Stryker Endoscopy is one of Stryker’s fastest-growing businesses and a key contributor to the company’s rapid global expansion. Globalization has been identified as one of Stryker’s four key imperatives for growth, and Stryker Endoscopy is leading the charge. It recommends that businesses wanting to pursue globalization follow these guidelines:  Be sensitive to local markets  Transform business processes first, then shift them abroad

 Look at the number of suppliers you use to see if there is a potential to cut costs  Recruit and develop talent to achieve sustainable global advantage

The Opportunities of Globalization It is a general agreement that the social dimensions of globalization are about jobs, health and education, but it goes far beyond these. It is the dimension of globalization which people experience and live in their daily life and work. Globalization is a great opportunity to a better and secure life for people and organizations everywhere. Nowadays, the perspective of globalization has shifted from a narrow preoccupation with markets to a broader preoccupation with people; with more responsibility of the impact of globalization in organizational behavior rather than the profits that globalization might drive.

Many opportunities have been created through globalization, and most of them for countries to break out the traditional models of educating, producing and trading. The global citizen now is seen as a person who acts locally, by adapting values and behaviors, but at the same time he thinks globally. That means the consequence of globalization is to maintain cultural diversity, while giving a country’s citizens the benefits of globalization.

6 Globalization opportunities lie in meeting the demands of firms, labor force and seeking economic growth. It is a valued opportunity for countries in the first place; because globalization will lead to economic development, social development and environmental protection. Besides, globalization is a process of a far-reaching change that has numerous effects on everyone. It provides new technology and more open policies, as well as it creates an interconnected world.

From organizational behavior perspective, globalization could provide many opportunities to the organization, which assist reaching goals. One of the opportunities is to improve employees’ attitudes, and that through the diversity that the organization will have as a result of globalization. For example, as a result of globalization, hiring foreign qualified employees, that will help improving other employees’ attitudes and let them learn and support each other’s. Another opportunity that globalization might drive is an increase in the creativity and innovation within any organization. The group in the organization will be formed to combine different experiences, cultures, ideas and opinions, all that will lead the group to be more creative and innovative, in order to achieve the goals of the organization. Additionally, increasing groups of problem solving is an opportunity that globalization could offer to the organization and impact on organizational behavior. Since variety of individuals are working toward a common goal, that will enhance problem solving by coming up with several solutions and opinions to resolve any issue. One more opportunity that could be brought by globalization is an increase in productivity. Regarding the national experts with different backgrounds, experiences, and abilities that will effectively and efficiency leads to higher level of productivity and hence that is good for the organization as well as the economy. Moreover, globalization aimed to make the technologies and the knowledge flow easily all over the world, and that have affected organizations performance widely. The best example of that impact id Singapore, although it might be a small country, but yet it benefited its resources and supported globalization, which made it goes from stark poverty to affluence within 30 years. (Williamson, 1998)

In fact, problems caused by globalization can be turned into opportunities and that through the company's continued consideration and respect of the local cultures. Regardless of whether one considers a positive or negative perspective of

7 globalization relationship to organizational behavior, it is been revealed that the opportunities of globalization have been big association for organizations’ success.

The Implications of Globalization Globalization is a bi-edged army in which it has some advantages according to the point of view for adherents, in the other side the "pro-team" has totally opposite point of view in terms of that issue at many aspects of life: politically, socially, economically and culturally. Advocates – who are mainly from a capitalistic background-, acclaim globalization with upgrading global welfare, concord, constancy, and democracy.

So proponents defense their point of view from economical side, that opening markets upon each other, that going to reinforce big market-share holder entities to compete on international scale (which is in many cases higher than the local scale more or less according to the growth rate of this or that country), for example, Saudi Arabia had joined World Trade Organization (WTO) in 2005 – as a solution to unemployment problem-, in which it force local business in order to rise the performance level to match the standards that new foreign competitors entering the market , there for, aggressive competition – according to proponents will motivate labor for whom work best at.

Beside this the competition will result in a verity of choices of products in markets, with wide price and quality range in that case normal consumer will be the winner, a good example of this is telecommunication market in Saudi – which attracting the other gulf telecommunication company to invest in - the competition between the telecommunication businesses (STC, Mobaily and Zain) leads them to depend on value offers, - in which a normal Saudi citizen delighted with-.

Another defense is that globalization will provide equal opportunity for every one to grow and flourishing, a very good example of this China and India before and after globalization, where quality of life was boor due to economic closure, globalization upgrades level of living, it does a lot of job opportunities in which contributes in dilution social issues due to accession of education and expansion of using technology, in which also move them up from weak economies into strong and slide economies .

8 Opponents, however, assign to globalization a long list of societal ills, including rising tension and likelihood of war and so discrimination against races, poverty and scarcity. If we take a look into each aspect, we found that economic openness contribute to loosing many of cultural features, the entire world is almost uni-customized, in other words, people around the globe is almost carbon-copy of each other.

Another problem that people around suffer from –especially those in developing countries in Africa and Asia- is lack of resources due to the greediness of mega industrial countries, in which it causes to rise up unemployment, crazy inflation and starving rate, leading into endless wars to possession of what remaining of these fortunes underneath and above the earth.

And by the way of speaking about wars, that resulted in overturns in political strategies of countries that playing the most important roles in making decisions, e.g. what have recently happened in Tunisia and Egypt in particular. These turnovers also affected in demographical changes, in developing countries or so-called 3rd world countries such as southern America, Asia and Africa, by immigrating people from these countries to Europe and Canada where the environment is more stabled.

And if we back to dependency theory, and start to analyses the labor market today" under the effect of globalization we realize then who are the "real” losers and winners, in such if we take a sport shoe as an example, we found that leather from Argentina, shipped to contracting company in Philippines that cooperate with a manufactory in Ohio in The United States then we got something like a story of globalization", where 1% of people got 99% of the money, and the left 1% of fortune for the rest 99%.

Moreover, as a result of globalization in organizations, nowadays organizations have greater specialization of production, and the best example of that is Hewlett Packard where it’s specialized in digital equipment. Another example is India. India’s share of world merchandise exports increased from .05% to .07% over the past 20 years. Over the same period China’s share has tripled to almost 4%. India’s share of global trade is similar to that of the Philippines economy 6 times smaller according to IMF estimates

9 Also one of the sequences of globalization is the increase in outsourcing, where companies attempted to manufacture broadly. This has happened because manufacturing work is outsourced to developing nations like China where the cost of manufacturing goods and wages are lower. Programmers, editors, scientists and accountants have lost their jobs due to outsourcing to cheaper locations like India.

A recent article by the American radical, Kim Moody, is a typical example. He writes: "Most of the struggle against the structures and effects of globalization necessarily occurs on a national plane. That, after all, is where workers live, work and fight. ... The most basic feature of an effective internationalism for this period is the ability of the working class to mount opposition to the entire agenda of transnational capital and its politicians in their own 'back yard.' For this agenda, too, is ultimately carried out at the national level."

Country Population

1,347,350,000 China

India 1,210,193,422

United States 314,519,000

Indonesia 237,641,326

Brazil 193,946,886

Pakistan 180,855,000

Conclusion Globalization has many effects on countries, including economies, social and professional life. It gives rise to complexities such as inequalities, financial flows, labor and work, technological innovations, environmental sustainability, cultural

10 dynamics, and organizational strategies for global competition.

The bottom line of globalization has created an opportunity for businesses to expand revenue streams, diversify risk and increase brand equity. It shifts the work of global managers from managing a field of expatriates to collaborating with strategic partners across national borders and managing global offshore outsourcing vendors in multiple geographical locations.

Globalization also has generated many challenges, despite the polarization of views, globalization seems to present gains and opportunities to some and losses and challenges to others both within and among countries. Problems caused by globalization can be turned into opportunities.

That means the consequence of globalization is to maintain cultural diversity, while giving organizations’ managers and employees the benefits of globalization. The impact of globalization can be summed into this great quote said by Jack Welch “ Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital - the world's best talents and greatest ideas.”

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