The Impact of Globalization on Organizational Performance and Productivity
The increased rate of debates regarding globalization has reinforced the need to analyze and assess its impact on organizational performance and productivity. The trending issues are associated with whether the concept of globalization has significant benefits to companies or it causes adverse impacts on the firm’s productivity.
The Concept of Globalization
Globalization has been a significant business trend over the past half-century. Globalization, therefore, entails the increasing rate of national economies and activities expansion beyond the border of the state. The integration of globalization in organization signify the manufacture, sales, and distribution of a company’s products and services across borders of the state in which it operates.
Analysis of Globalization Impact
The paper addresses the concept of globalization, and it affects the performance and productivity of an organization as well as possible challenges that likely to be encountered by international companies. The author analyzes, evaluates, and responds to the various business articles including, Walls Street Journal, Forbes, Fortunes, and Harvard Business Review. The paper rests on the premise that globalization is an integral part of organizational performance and productivity as well as an approach that spawns adverse consequences to the performance and sustainability of local enterprises.
The Need for Maintaining Globalization
Hannon, in his article “Slowing Globalization Threatens Economy, U.N Warns” advocates for the need to integrate initiatives to maintain or escalate the rate of globalization in nations in order to reduce the likelihood of decreasing economies. Governments should support business operations across nations by minimizing regulations on nations that conduct business globally to reinforce further expansion. The article asserts that globalization stimulates international economic growth as it enables identification of the most efficient and potential competition among enterprises resulting in potential maximizations. In particular, globalization helps in spreading new technologies in nations that lack the skills to develop advanced devices used in organizations. Therefore, businesses are predicted by the UN to invest approximately 10%-15% which will reduce the flow of foreign direct investment (Hannon).
The Negative Impacts of Globalization
Similarly, an article written by Murray, 2016 regarding the hard truth of Globalization, the issues is one of the critical trends in business enterprises ascertaining that globalization has significantly contributed to the loss of employment by most individuals in many nations. The author asserts that globalization was the key antecedent in causing international civic convulsion referred to as Brexit. Globalization has negatively impacted the economy of many nations including China and U.S. In particular, the strong currency resulting from globalization has a negative influence on American companies (Murray). On the other hand, Ignatius in his article “The Truth About Globalization,” affirms that international flow of trade and activities has both negative and positive consequences. The author reveals that the management team in an organization tends to overestimate the degree of international business flow and underestimate the potential gains. The author thus advocates for the need to have comprehensive insights regarding both the negative and positive impacts of globalization in order to integrate policies that minimize the adverse impacts as well as maximizing the full potential of the positive effects of globalization (Ignatius).
Advantages and Disadvantages of Globalization
Furthermore, Collins, (2015) in his essay “The Pros and Cons of Globalization” substantiates Ignatius claims regarding the advantages and the disadvantages of globalization as well as the need to address the gap by understanding challenges resulting from the international flow of businesses and fully utilizing its benefits. The author reveals that expansion of business has facilitated the developing countries get access to advanced markets and export of cheap products that are locally produced thereby contributing to the economy of less developed nations. Free trade across nations reduces barriers including tariffs, subsidies, and value-added tax. Consequently, the approach reduces the rate of unemployment and poverty among developing nations. However, the author also articulates the negative impacts of globalization as increasing disparities between developed nations and poor countries. Furthermore, there exist barriers that prevent many nations in engaging in international business operations. Moreover, citizens of developed nations risk unemployment as companies expand their operations in impoverished nations (Collins).
Evaluating Globalization and its Impact
It is evident that globalization and its impacts on companies and nations are a heated issue in the media as well as among academics. I believe that globalization is a double-edged sword that requires comprehensive evaluation by the organization before making decisions of expansion in other countries. The concept of globalization significantly affects business organizations thereby forcing companies to integrate the dynamics of change associated with internationalization. Failure to adapt to new changes that are fueled by the international flow of business, some companies collapse and cease to exist. Therefore, based on global changes due to globalization in economic, social and political spectra it is imperative to develop strategic responses of organizations to keep abreast with the ever-changing business environment. Globalization offers various benefits to specific organizations around the world by increasing the rate of competition, making markets more efficient, spreading wealth more equally, and limiting military conflicts among nations.
Conclusion
In conclusion, globalization remains to be an integral part of company performance as it enables enterprises to achieve economies of scale, facilitates international direct investment, and technological innovations. The benefits have seen many organizations stay competitive in the market thereby enhancing sustainability. However, several risks have also been associated with globalization including interdependence, national sovereignty, and unequal distribution of globalization benefits among participating organizations and nations.
Works Cited
Collins, Mike. The Pros and Cons of Globalization. 6 May 2015. 2018. .
Hannon, Paul. Slowing Globalization Threatens Economy UN Warns. 6 October 2016. 2018. .
Ignatius, Adi. The Truth About Globalization. August 2017. 2018. .
Murray, Alan. The Hard Truths of Globalization. 21 July 2016. 1 November 2018. .
