Globalization Among Technology: How Is International Business Affected?

Have you ever considered where your phone or computer came from? Each individual piece of the device takes work in production and assembly. There are many products that are made domestically, but the vast number of companies transferring their products to be produced in other countries is growing every day due to the expected profit increases. This is an example of globalization. Specifically, companies like Apple can produce their phones, computers and tablets in foreign countries for significantly less money than it takes to produce them domestically in the United States. New technology in companies such as Apple has allowed globalization to result in a negative effect on global business through factors such as location, consumers and competing organizations. Yes, international factories can produce parts inexpensively, but at what cost to global business?

The consumer is the main reason that businesses become successful. Without the consumer, companies would be wasting precious resources and capital to produce products or services that are not purchased. People around the world have become so mesmerized with Apple products that they spend outrageous amounts of money on them. The cost of these products does not change despite the country it is being sold in. However, if the consumer cannot afford the product, they cannot buy the product. This is especially true for those living in the United States if businesses like Apple, among many others, are moving their jobs overseas. Similarly, in foreign countries, those businesses producing the technology are being paid pennies on the dollar. This results in poor wages for the workers and the inability to buy products, in turn. Thus, expanding the technology internationally through globalization has a negative effect on the company through the volume of purchases by consumers.

Many companies initially manufactured their products domestically. The desire for greater return on investment has lured more companies to consider or commit to expanding these tasks internationally through globalization. Potential new businesses in America are not looking into manufacturing or creating new products domestically because they fear they will not be able to compete with international rivals or companies utilizing outsourcing. In result, this may be too much expansion occurring too quickly for a new business, and it could backfire greatly on their profits. Lack of opportunity to produce domestically has also lowered the amount of jobs and taken funds away from the economy in many ways. By not creating the physical product, but still consuming it in the United States, the economy is still essentially receiving the taxes from the creation or sale of the good. However, the economy is missing out on income taxes collected from factory employees, as well as money that those same workers would be spending to stimulate our economy if their job was not outsourced. This means that there will be less money spent by consumers on products that companies like Apple produce.

On the other hand, globalization in technology has negative effects internationally, too. This proceeds into affecting business on a global scale. As stated earlier, companies receive pennies on the dollar for the products they produce, which results in poor working conditions and wages for people employed in these jobs. Poor wages for workers is directly correlated to the inability to buy non-essential items such as iPads, MacBooks or iPhones. So, by utilizing globalization, Apple is technically limiting the number of products that they will sell. Continuing this thought, it is well-known that an alarming number of factory workers for Apple have committed suicide due to exhaustion in their situations. A negative stigma and reputation could be associated with Apple for the reasons behind this, causing additional units to not be purchased. This would be all thanks to the initial effects of globalization, and illustrates how complicated the issues caused by globalization can be.

Competing companies are also affected by globalization of technology. For example, when Company One sends the manufacturing of their products abroad, there are many negative impacts on similar businesses. There are missed sales opportunities for other companies because Company One is able to sell their product for significantly less due to domination in the market in consumer interest. The consumer seeks cheaper items with available supply. The supply tends to be greater because larger manufacturers can supply more product for less, driving the demand up even more. Company One is unable to be competed with because their cost to bring the product to market is significantly less.

The effects of globalization on business are so severe that more emphasis needs to be placed on the discussion of pros and cons when making a decision of outsourcing a company. Although it may bring a company more profit, they should consider what lengths they are willing to go to achieve this goal. They should deliberate the effects of globalization on their home country as well as international countries. While outsourcing may be positive for themselves, low wages, poor work conditions and deteriorating mental health are terrible repercussions for workers abroad. Likewise, the negative effects one one’s own economy and competitors should be considered. Money that should be stimulating and circulating through one’s own economy is now in another country. Additionally, competitors in the same industry will have trouble keeping up, and could be forced to cease business. Neither of these factors are positive for one’s country. Finally, the most important point about globalization would be the long-term effects on global business. Higher profits may be seen initially, but overall, globalization affects the consumer and all countries involved so much that sales volume will likely decrease as time passes. This blatantly cancels out the main goal of globalization for a company in the first place.

Getting There From Here – Global Leadership Adaptations

A recent television advertisement depicts workers standing around their personal data arrays bemoaning the messages they are receiving from other team members. They are bewildered and dismayed that the messages ask for their global business strategy. Looking among one another, they query if they even have a global business strategy. We almost have to conclude, they have none.

Of course, the ad is selling a communications product not business strategy. Yet, how did these professionals find themselves in this predicament? Were they aware that international business requires adaptations? Going global is a process that begins with leader vision and foresight and may take years to successfully accomplish. Leaders who actively scan the horizon for new opportunities also see the challenges the opportunities present. They see barriers, not as hindrances, but brief pauses in their forward movement. Like performing a force field analysis for change, leaders examine barriers for ways to minimize negative forces and maximize positive forces.

The focus of this discussion is on adaptations organizations will face when going global. Adaptations suggest the company and its leaders have to become aware of potential barriers developing a navigation strategy to overcome them. Additionally, interpersonal relations among workers on a global plane will mean a different socio-technical climate.

Adaptations

Among businesses in the United States, small and medium operations may operate within the boundaries of a single state. They have to obey state laws governing the way they do business. On a higher level, some companies operate as interstate businesses. They have to adapt to laws of multiple states and obey federal interstate commerce laws. As muddled as those laws may be, operating within the company’s home nation is far less difficult than adapting to global demands.

Addressing adaptations U.S. organizations face upon going global begin much earlier than in college business schools. Elementary and secondary schools still teach a traditional curriculum of reading, ‘riting, and ‘rithmatic in much the same way as twenty years ago (Andrzejewski & Alessio, 1999). Therefore, the first adaptation hurdle to overcome is traditional education that remains mostly ethnocentric and nationalistic.

Conversely, the European Union wrestles with a new sense of supranationalism. Supranationals are cross-national or subnational citizens that do not claim “political identity and cultural membership” (Bridge & Watson, 2002). The business leader taking an organization global now has a hurdle that forces thinking beyond nation one and nation two toward a recognition of people living in one or another country but not feeling or being a part of the national culture.

The European Union grants citizenship rights to any national of the EU regardless what country they currently reside. However, granting of citizenship rights to foreign nationals is a complex issue and each member country decides on citizenship processes. According to Bridge and Watson, European cities have concentrations of foreign nationals from as low as about 14 percent in Paris to as high as 32 percent in Amsterdam.

Adaptation to global business, therefore, is not as simple as merging the culture and business practices of multiple countries. Adaptation is a learning process according to McCall and Hollenbeck (2002). The learning process goes beyond business, they say. International business is business; however, in cultural contexts, adapting to the culture is a harder lesson to learn without experiencing it as an expatriate.

Barriers to Adaptation

U.S. business has a long way to go to overcome barriers to adaptation. McCall and Hollenbeck (2002) provide a view of barriers in the form of lessons learned by international executives versus U.S. executives. Among international executives responding to overcoming the barrier of culture, they responded learning another language was the number one skill followed by learning about a specific culture and how to live in that culture. No U.S. executive felt these skills were necessary (Table 4-1, pg. 95). In addition, McCall and Hollenbeck’s research suggested that international executives are more aware of running a business while U.S. counterparts are concerned about technical knowledge. In leading and managing others, international executives want to learn to keep people motivated and committed while U.S. executives are concerned about directing and motivating followed by management values.
However, U.S. business ranks second among 59 nations rated on eight economic criteria for global competitiveness (Rosen, 2000). From this statistic, the U.S. business is open and financially secure, has the technology, labor force, and infrastructure appealing to international business.
Another barrier to successful global leadership, addressed above, is education and developmental experiences (McCall & Hollenbeck, 2000). Leaders cited education and developmental experiences third among 18 experience categories. However, global leaders cited it more often than U.S. domestic leaders. McCall and Hollenbeck discovered that more than one-third of developmental and educational competencies they rated came from high school, college, and graduate school learning. Senge (1990) took a step toward organizational learning in The Fifth Discipline and McCall and Hollenbeck take it further explaining that organizational learning must be active, have a global perspective, have high expectations, and reflect the global nature and cultures of the organization.

Socio-technical Environment

Rosen (2000) offers a view of the socio-technical environment starting with people. People are workers, supplies, and customers. Global leaders who understand relationships hire people who are flexible and work well on teams.

Hoffman (2007) wrote of networks that global workers have. One statistic he related is that among ten thousand workers, they likely have as many as fifty million interpersonal connections globally. Among these connections, some workers prefer what Rosen (2000) termed the “human touch in sharing knowledge” (pg. 132), while other connections across the globe by telephone, email, or other instant message communication process. Sarnoff’s Law (Smith and Skelley, 2006) states “the value of the network grows with the number of actors.”

The successful global leader recognizes the value of interactions within the socio-technical environment, recognizes that contemporary global operations do no exist within traditional office settings, and recognizes the power of global interactions to produce a network of knowledge and information sharing.

Global Market Adaptation

Smith and Skelley (2006) suggest to global leaders that their organizations have to evolve matching the pace of change and pace of innovation. Today, collaboration and networking make business competitive. Contemporary business no longer relies on suppliers and customers from small geographic areas. Truly global organizations have supply chain networks around the world. Customers exist for products not yet created.
Smith and Skelley, like Davis (1996) share that envisioning the future as though it is a present state helps business prepare for global markets. An example of global market adaptation is the Apple iPod, a global phenomenon. Another law shared by Smith and Skelley is Metcalfe’s Law. This law explains network synergy such that the value of combining networks is greater that the value of the two networks measured separately.
An interesting counter to Smith and Skelley comes from the Internet Center for Management and Business Administration, Inc. (2007). While they support innovation and collaboration, they also support the concept of extending the life cycle of products. Developed countries clamber for the newest and most technologically advanced product available. However, global business expanding into lesser-developed nations cannot put the latest greatest products into consumers’ hands when the country’s infrastructure does not support the technology. The result is continued profit from older technology over a longer period. Under-developed nations have time to catch up while developed nations continue seeking new technology.

Think Global – Acting Global

Black et al (1999) see business moving from thought to action on the global stage. Business is about profit; hence, business is about discovering market opportunities. Black et al tell global leaders to seek riskless “opportunities involving cost and quality differences in production inputs” (pg. 151). Beyond this, global leaders must seek new markets for their finished good and services while minimizing redundancies and maximizing efficiencies.

Managing inputs globally means, in part, seeking the most cost efficient high quality production sites. Labor costs in Germany, according to Black et al, is about $31.76 per hour while In the United Kingdom the same production costs are about $14.63.

Finding new markets requires global leaders to view the world in terms of gross national product. The U.S. accounts for about 25 percent of the world’s GNP and no other country exceeds that amount. Finding untapped global markets takes careful research; however, that research can result in increased revenues.

Finally, increasing efficiencies begins with reducing redundancies. Cost efficient production eliminates multiple locations for manufacturing. Reducing redundancies increases economy of scale for business. Additionally, business can exploit its size and negotiate lower prices from outside vendors.
Analysis

Adaptation to global markets recognizes barriers. How an organization and its leaders approach the barriers is critical to its global expansion. Forward thinking leaders utilize the barriers to their advantage. Rather than accepting want can’t be done, these leaders maximize what can be done.

One aspect of adaptation that global business recognizes is the need to change how students learn business in school. One adaptation in this area exists in many colleges and universities. Rather than having large full time faculties, universities turn to professionals working in business fields to serve as adjuncts. Further, there is a shift away from traditional pedagogy to andragogy, from lecture/exam content-centered to problem-centered/experience-based learning.

Business leaders in a global arena recognize the value of people and the power of people and the network webs they share. Adapting to these interpersonal networks of like-minded workers adds knowledge and information to business. These networks help business explore potential for global expansion into new markets, provide for economy of scale, and leads to global branding.

A final analysis of global adaptation tells leaders to have a sense of adventure, do not stop learning, and do not stop changing. Examine the globe as a market place; learn the position the organization holds in that market place, and work to become a transnational leader rather than an expatriate manager.

Globalization And The Government’s Need For “Knowledge Workers”

Globalization is indeed a potent force in the world today. Not only has it lifted barriers in communication and the cultural differences among nations, it has also affected economic, political and social trends. For instance, the technological breakthrough ushered in by the Internet and the World Wide Web has propelled changes in how people think, live and work. With these advancements, businesses, meeting and keeping up with friends and acquiring new and vital information can be done online. Globalization has brought forth a virtual world that has the power to influence policies and procedures of governments in almost all countries where the Internet is accessible.

In the United States, technological advances and globalization has shaped the hiring needs of the federal government. According to the Partnership For Public Service 2007 report entitled Where The Jobs Are: Mission Critical Opportunities For America, these two factors have continued the “shift from manufacturing to economy dominated by ‘knowledge workers’.” This means that analytical and technical expertise will be greatly valued along with reasoning, problem-solving, communication and collaboration skills. This is welcome news for those who are or have experience in the field of information technology, mathematics, health and education, among others, and are contemplating a career in public service. Opportunities in these areas span the needs of the whole government system – we’re talking of 15 cabinet-level agencies, 20 large, independent agencies and 80 small agencies here, whose manpower needs reach up to the hundred thousands. And an even more welcome piece of information for those who can honestly say that they are “knowledge workers” is that the hires in these areas are not limited to entry-level positions. They are also for those who are in the middle of their careers and want to try out government service as well as those for the already-retired who want to do a “repeat performance” of their work lives. And with many government workers already on the road to retirement, there are numerous slots that need filling up with young and experienced talents.

Thus, with this trend that is projected to continue in 2014, it is vital for those who wish to work in government to continuously improve themselves through trainings and further education on these areas if at all possible. Because of the high-level analytical and thinking skills needed for these occupations, working towards a college degree in any of these fields would certainly be a plus if you aim to work for government.

Knowledge is power. Nothing else is truer now when globalization and technology have fused together to create job openings in areas which were previously unheard or unthought of. Indeed, those with the proper training and technical know-how stand a much better chance of impressing the federal hiring authorities. Computer specialists, scientists, mathematicians, engineers, physicians, attorneys and management analysts are most happy, to say the least, at these recent turn of events in federal recruitment. In an era of globalization “knowledge workers” are the trend.