Globalization Is an Opportunity for Companies to Utilise Labour, Intellectual Capital and Other Resources From Around the World to the Benefit of All
The world is increasingly becoming interconnected into a single global village because of the advancements in technology. This is also becoming a trend nowadays because of the way the global market is filled with interdependent products and consumers making it necessary for companies and labor to traverse the world in search of one another. Globalization has however not started in the recent past, it has been a practiced by the people of the ancient times, when they even had trade routes, for example the famous silk route ...view middle of the document...
Companies are known to apply and replicate their business models and processes throughout their corporation so as to maintain consistency. Consistency of a product creates a standard appreciated by clients making the product maintain its value (Sarin, 2013). When a company decides to venture into new markets, it might be forced to change its operation model to fit in with the demands of the new market. A good example is the global beverage making company coca-cola. Coca-cola has ventured out in the global market using different business models for different markets. According to Foster (2008), this has always been a challenge for the company because it seeks to maintain its parent product in markets which have different demands. The American market of coca-cola uses high fructose corn syrup which is cheaper than sugars used in other markets like Africa, this means that the cost of operating in America is different from that of Africa but the product has to come out as a standard coca-cola product.
Companies that venture out in new global markets are also faced with the challenge of staffing (Storey, 2007). This is because they are in various markets which have different cultural perspectives from the ones in the parent company. Since the position of top management is normally retained by employees who have an experience in the company, it becomes difficult to adapt to direct the new employees because of the cultural barrier aspect (Crawley et al., 2011). This becomes a challenge to the company as it tries to adapt to the new operational environment causing a delay in operations.
Despite the huge potential market in china, it has become very hard for most foreign companies to establish in that country. This is because of the very stringent measures that the People’s Republic of China has placed concerning matters dealing with intellectual property and intellectual capital. This acts as an impediment to globalization because most companies are not willing to disclose most of their intellectual property, especially not to governments. This is because of the fear of duplication of the patented property or forceful acquisition of the human capital and the intellectual property. This is the greatest challenge of globalization, because of the risk involved in exposing company’s blueprints to other people who might modify or steal that concept (Samli, 2007). The Chinese government has however loosened the grip on the stringent intellectual property laws so as to attract more foreign investment (Howell, 2004).
However, intellectual capital can also be used for the advantage of the company. This includes transportation of concepts and human capital into new markets to come up with solutions for the market using locally available materials (Weick et al., 2013). This includes setting up of research and development facilities in different countries. A perfect example of this capability made possible by globalization is the Hyundai motor...