How Does Globalisation Impact on the Management of Chinese Firms - Coursework Example

How does globalisation impact on the management of Chinese firms? Table of Contents Introduction 3 Discussion 4 Conclusion 12 References 14 Introduction Globalization and its impact on the management of firms have attracted an effective attention of the international business’ scholars in the past decades. Small family run private owned business organizations have been at the middle of various international discussions on the how the globalization impacts the management of the organizations. Liberalisation of markets, services, standardization and integration of economies are considered as the hallmark of the globalization. Opening of economy and increased interdependence on global market has contributed effectively to the economies of both developing and developed countries. China is considered as one of the emerging economies around the globe. The small family run private owned hospitality firms are achieving significant growth rate due to China’s open economy policy and globalization. On the other hand, it is quite challenging for an organization within this sector to manage the workforce and business performance inside or outside of the country. Recently china achieved potential economic growth rate due to globalization, open door policy and economic reformation. It is true that the business environment in China is becoming highly potential as well as competitive. Several organizations within the small family run private owned hospitality organizations are adopting different strategies in global market place in order to develop potential client base and gain significant competitive advantages. Despite the financial advantages, the management of these Chinese firms faces several issues in foreign market places due to globalization. Several Chinese small family run private owned hospitality firms are trying to aiming on global expansion strategy. However, globalization has several advantages and disadvantages on the management of these firms that will be discussed in the discussion part. This essay will determine the impact of globalization on the management of small family run private owned hospitality firms outside China. Discussion It s true that globalization and open door policy of China is motivating several small family run private owned hospitality firms to adopt and implement global expansion strategy. These organizations are considered as one of the important contributor of the economic growth of China. China is highly focusing on the growth of these business firms due to high potentiality and strong market demand. Therefore, the government of China is supporting these organizations to adopt and implement global expansion strategy. There are several negative and positive consequences of globalization on the management of these firms that are discusses below. Positive Impacts of Globalization Several leading organizations are trying to capitalize on the opportunities that are developed due to globalization. Government of China introduced open door policy. It helped the country to achieve significant economic growth as the demand for different products is increasing among the Chinese people. In addition to this, several organizations are focusing Chinese market to gain potential competitive advantages. The Chinese small family run private owned hospitality firms are contributing effectively to the economic growth of the country. These organizations are trying to focus on international market places due to different advantages of globalization. First of all, the organizations can create effective demand for their products and services after achieving significant success in Chinese market. China is considered as one of the largest consumer markets around the globe in which the buying and selling activities account more comparing to other developed and developing countries (Thai, Rahm and Coggburn, 2007, p.265). Generally the management of these organizations decides to implement global expansion strategy as the demand for a particular service among the global customers can be increased due to globalization. It influences the organizations to expand their business operation practices in global market place. It is important for an organization to maximize business profit by developing a potential client base in global market place after expanding business operations in international market. Globalization allows the organizations to take potential business advantages and help the organization to increase their brand awareness in international market places (House-Soremekun and Falola, 2011, p.243). Chinese family owned small hospitality firms used to maintain Chinese tradition in the business operation and customer service to satisfy the needs of visitors or guests. In addition to this, specialized Chinese food items in hotels are quite popular among the people around the globe. These organizations are developing potential client base with the help of maintaining traditional Chinese culture in each and every business operation process. It is true that several small firms used to adopt workplace diversity aspect in the organization due to its several advantages. Globalization allows management of the organization to recruit employees from different cultural background. There are several advantages of maintain multicultural workforce in business operation process. It is true that knowledge, skills and perception of people used to vary due to different cultural background. Effective knowledge sharing and collaborative work performance helps an organization to give effective solution to several internal and external issues that are effective for an organization in international market place. The hospitality organizations used to operate in the service providing industry in which effective customer services can be considered as major business growth driver for an organization (Sun and Lancaster, 2013, p.150). Therefore, multicultural workforce and knowledge of employees of different culture and languages can help the management of these firms to attain significant growth rate in the host country. Globalization helped several organizations to source effective technological resources for the purpose of effective business performances. The technological advancement allowed the Chinese small family run private owned hospitality firms to reduce overall business operation cost and time. In addition this, these aspects are helping the organizations to meet the market demand and satisfaction level of the visitors or the guests in the international market place. Several small China based hospitality firms are focusing on the implementation of e-commerce business strategy. It is important for an organization in global market places to use significant business resources to bring efficiency in each and every business operation process. This e-commerce tools and processes are helping the organizations to communicate effectively with the guests or visitors. Now-a-days, small firms are also providing facilities like online room booking and purchasing of holiday package. On the other hand, process of these packages is quite economical comparing to other leading multinational hospitality organizations. Therefore, people prefer these hotels. In addition to this, visitors can get a traditional Chinese environment with their package. These aspects help the management of the Chinese small family run private owned hospitality firms to attract more number of target customers. It is true that several organizations are trying to implement niche marketing strategy in the business operation process to cover an untapped market to get potential competitive advantages. However, the Chinese small family run private owned hospitality firms are completely focusing on effective customer service. In addition to this, these organizations always try to adopt and implement cost leadership strategy in order to gain competitive advantages. Introduction of several unique differentiated and traditional food items in economic price level helps these small family run private owned hospitality firms to gain significant business growth rate in the international market place (Baldwin and Winters, 2007, p.367). The ability to acquire significant resources in the international market place are considered as an important benefit of globalization for the management of Chinese small family run private owned hospitality firms. These firms generally use significant business resources in foreign countries. They always import cooks and chefs from the native places as it helps to maintain the tradition in the food. On the other hand, in operation department the organizations always try to source effective employees to ensure better customer service (Hitt, Ireland and Hoskisson, 2009, p.228). The organizations always recruit people from host country in operation department due to language proficiency and knowledge about culture. This diverse workforce helps the organization to enhance effective collaborative workplace performance. In addition to this, it helps to develop a potential customer base. Globalization allows the management of the organization to increase the financial stability and business profit in international market places. In addition to this, globalizations helps these Chinese small family run private owned hospitality firms to make relationship with several international marketing communication agents. It helps the organizations to create significant brand awareness among the target customers. Through globalization, management of these organizations can find effective marketing communication and supply chain management channel (Guo and Guo, 2010, p.76). It helps the organizations to maintain effective business performance by ensuring the efficiency of supply chain management process. Globalization helps the management of the organizations to develop effective relationship with the suppliers and several external stakeholders. Overall its helps to reduce supply chain lead time and entire supply chain management cost. The management of the small family run private owned hospitality firms of China are trying to capitalize on these business opportunities to gain competitive advantages in global market places. Negative Impacts of Globalization It is true that organizations can gain several advantages from globalization, such as multicultural diverse workforce, financial profitability and potential client base. Despite these advantages the organizations face several difficulties due to globalization. Global business environment is becoming highly competitive as several organizations are trying to adopt and implement advanced strategies in the business operation processes. Global small family run private owned hospitality organizations are adopting several aggressive operation management strategies in order to gain competitive advantages. First of all, the Chinese small family run private owned hospitality firms face intense industry competition in the global market place. It is quite difficult and highly challenging for the management of these organizations to avoid the threat of intense competition in global market place (Taylor, 2012, p.114). Demand for hospitality services and products are significantly increasing among the people around the globe. These Chinese small family run private owned hospitality firms face huge competition for other domestic hospitality organizations or several leading multinational organizations in global market place. It is true that China is enriched with significant business resources. Organizations can source human resource and other raw materials in limited cost comparing to other developed or developing countries. But, these Chinese organizations have to face stiff competition in global market places as the globalization drastically increases cost of production, raw materials, human resource and entire supply chain management processes (Hay, Melelli and Shi, 2012, p.88). Several leading organizations try to maintain supply chain management cost by maintaining effective relationship with the suppliers. In addition to this, the leading multinational organizations in global market places already have good relationship with the marketing agents. It helps them to promote their products and services quite effectively that can help to attract the target customers. Availability of huge financial resources helps these leading hospitality organizations to implement aggressive marketing and promotional strategies that pose real threat for the Chinese small family run private owned hospitality firms in global market places (Alon, Fetscherin and Gugler, 2011, p.53). It is quite difficult for the management of these Chinese small family run private owned hospitality firms to compete with large multinational organization in global market place with respect to production, supply chain and marketing processes. It is highly important for these small family owned hospitality firms to ensure strong financial resources before the adoption and implementation of global expansion strategy. Financial resources are quite important to develop competitive strategy. It is quite difficult for these types of organizations to arrange capital for these business expansion strategies due to volatile economic conditions (Chen and Yao, 2006, p.94). Commercial banks always demand high value of security and securities against their provided loan capital due to global economic recession and financial crisis. Chinese small family owned private hospitality organizations of China face huge difficulty in finding financial resources. Inadequate access to credit facility is becoming a huge concern for these organizations due to globalization. It is true that these organizations were gaining success in global market places before the recession as several venture capitalists used to provide capital to these firms. But, this recent economic recession stopped several venture capitalists to invest in these firms due to critical financial risks. Different cultural conflicts and language barrier in workplace are the other issues that are affecting the performance of the management of the Chinese small family owned private hospitality organizations in several global market places. It is important for an organization to consider workplace diversity for the management of any organization before adopting and implementing global expansion strategy. It is true that culture of people used to vary from a country to another country. The small family run private owned hospitality firms used to receive several foreign customers (Wong, 2008, p.41). On the other hand, it is true that the lack of ability of the staffs to communicate effectively with foreign customers can affect the customer service management process. Customers always want customer friendly services from their hotels. Lack of integration of these things can affect the employee satisfaction level. It can ham business performance of an organization in global market places. Employee motivation is key quite important aspect to consider for an organization. Language barrier and cultural conflicts in a workplace can ultimately affect the performance level of the organization’s management. Organizations have to adopt workplace diversity in foreign market place as it is quite difficult for an organization to source employees from the home country due to several problems. First of all, it can create difficulty for the employees to understand the language and culture of the people in international market place (Caprio, 2012, p.317). It is essential for the organizations to recruit employees from the host countries too. The Chinese small family run private owned hospitality firms always adopt workplace diversity strategy in the international market place to communicate effectively with the customers. It is true that chances of cultural conflicts and language barriers always presence in a multicultural diverse workforce. In addition to this, conflict between workforce and top management are considered as common issues in the multicultural workforce (Davies and Nyland, 2004, p.97). The concept of multicultural workforce generally came from the term globalization as these organizations used to recruit employees from the host country to gain more competitive advantages. In several cases employee discrimination, biasness, inadequate performance appraisal affect the performance management process of the small family run private owned hospitality firms in international market places. It actually affects the overall business performance of an organization. Employees are considered as an important business growth drivers of the organizations as the significant business performance of a hospitality firm highly depends upon the sills and competencies of employees. Therefore, it is quite important to retain effective, skilled and experienced employees in order to gain significant competitive advantages (Guthire, 2012, p.97). It is true that management of the organizations used to implement effective motivational tools for the employees in order to increase their performance level. Each and every employee within an organization tries to expect some effective social recognition or rewards against the effective performance level. It is true that high employee turnover is becoming a major concern for small family run private owned hospitality firms in global market places. Generally the Chinese firms used to provide limited salary to the employees in international markets due to limited financial strength comparing to the other organizations (Fung, Pei and Zhang, 2005, p.79). In addition to this, lack of knowledge about the international business operation and multicultural workforce management force the employees from the host country to switch over other organization. Employee and their performance management is an important thing for the management of any organization in international market place in order to get attain positive business growth rate. But, lack of these mentioned aspects affecting the management performance of the Chinese small family run private owned hospitality firms in global market place. Hotels or hospitals are considered as the organizations within the service providing industry (Yeung, Xin and Pfoertsch, 2011, p.69). The business performance of organizations highly depends upon the efficiency of the workforce. Skills and competencies of customers help the organizations to meet the satisfaction level of the target customers. The Chinese small family run private owned hospitality firms fail to motivate the employees. Therefore, they face issues like high employee turnover and serious workplace conflicts due to lack of effective leadership and managerial skills. Different rules and regulation in different countries are affecting the performance of the management of the organization. It is true that each and every organization has to face several types of legal barriers if the organizations wish to enter in the potential market places. Several issues, such as employment regulations, environmental policies, safety measures and distribution rules can affect the business performance level of the organization. It is true that the Chinese small family owned private hospitality organizations are facing similar issues in global market place due to different government regulations and policies. Conclusion It is clear from above discussion that globalization has both positive and negative impact on the management of the Chinese firms. The essay discussed about the impacts on the management of Chinese small family run private owned hospitality firms outside of the country. Several organizations are trying to expand their business operation practices in outside of the country in order to achieve several benefits, such as business profit maximization, potential global client base and several significant business resources. Each and every organization is adopting global business expansion strategy due to globalization as it influences the management of the Chinese small family run private owned hospitality firms to gain competitive advantages outside of the country. In addition to this, the organizations are trying to adopt workplace diversity aspects in the business operation process in order to enhance effective collaborative workplace performance. Despite the advantages, globalization can affect the management performance of the organization. Diverse workplace culture can create several conflicts of ideas and employee biasness in a workplace that can affect the business performance of an organization. In addition to this, intense market competition can affect the growth of the organizations in global market place due to high brand image of the leading competitors. Lack of effective supply chain network, financial resources and skilled human resources are considered as other negative impact of globalization can harm the management process of the organization. References Alon, I., Fetscherin, M., and Gugler, P., 2011. Chinese International Investments. London: Palgrave Macmillan. Baldwin, R., and Winters, A., 2007. Challenges to Globalization. Chicago: University of Chicago Press. Caprio, G., 2012. The Evidence and Impact of Financial Globalization. New York: Academic Press. Chen, J., and Yao, S., 2006. Globalization, Competition and Growth in China. New York: Psychology Press. Davies, G., and Nyland, C., 2004. 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