Globalization: The Collapse of Time & Distance
The world is now becoming a global village and it is time for e-commerce, which is now asking the world to focus on communications from transportation and avail the economies of scale by connecting the whole world through internet.
The World Wide Web has converted the world from number of countries to one big market where the sellers and buyers can connect through internet, thus creating a possibility where products produced will be cheaper and affordable to everyone however it also creates a disadvantage to the local labor which can be replaced internationally much cheaper on internet.
This globalization has provided an incentive to both large size companies and small size companies. The large size companies are growing more and expanding their services and product all over the world mainly by having a merger or forming partnerships with local companies. On the other hand the small size companies have also emerged increasingly because of ease of access to global markets and ease of changing the line of business.
You & global Management
Learning about the global management provides an edge of interacting with foreign clients or suppliers and it also provides an opportunity to hold a position which deals overseas. Effective managers are mostly geocentric, who know the importance of effective methods regardless of origin of the techniques.
Why & How Companies Expand Internationally
The companies are spreading their reach to the whole world because they wish to seek the advantages the globalization has to offer them; like suppliers, customers, reduced labor cost, easy access to financing, evading the boundaries of tariffs and import quotas. The companies are availing these opportunities by outsourcing; import, export and counter trading; giving out licenses and franchises; by indulging into joint venture; and wholly owned subsidiaries.
The World of Free Trade: Regional Economic Cooperation
Governments impose barriers to free trade to save the economy of their country with the help of measures like imposing tariffs, imports quotas and embargoes. However there are organizations which are promoting the free trade are World Trade Organization, The World Bank and International Monetary Fund, while the major trading blocs include NAFTA, the EU, APEC, ASEAN, Mercosur, and CAFTA.
The Importance of Understanding Cultural Differences
Understanding the difference in the culture gives the managers an edge to be successful because one needs to understand the local culture, the dimensions of their culture and perceptions which are a part of their language, interpersonal communication, space, time orientation and religion in order to communicate effectively and efficiently when operating globally.