Good Understanding of the Globalization Process - Essay Example

The Extend wherein Modern Managers have a Good Understanding of the Globalization Process Total Number of Words: 2,511 Table of Contents I. Introduction ………………………………………………………………. 3 II. Literature Review ………………………………………………………… 4 a. General Information Including the Main Purpose of Globalization ……………………………………………………. 4 b. Reasons Why Modern Managers should have a Good Understanding of the Globalization Process ……………… 5 III. Research Question(s) ……………………………………………………. 6 IV. Research Plan: Importance of Strategic Questioning, Interview Techniques, & Evaluation………………………………………………... 7 V. Research Methodology ………………………………………………….. 8 VI. Analysis and Interpretation ……………………………………………… 9 a. Structured Interview Results …………………………………. 9 b. Quantitative Research Survey Results ……………………… 11 VII. Conclusion ………………………………………………………………… 12 Appendix I – Semi-Structured Interview Questionnaire ……………………... 13 Appendix II – Semi-Structured Interviews with Mr. White …………………… 14 Appendix III – Semi-Structured Interviews with Mrs. Brown ………………… 16 Appendix IV – Research Survey Result – Quantitative ……………………… 18 References ………………………………………………………………………19 – 21 Introduction Globalization is one of the biggest issues being tackled in the politics, business and academic world today. (Smith & Yaw, 2002: p. 1; Tierney, 2004) In 1990s, large-scale businesses are more focused on producing more goods using less investment on capital, human resources, and raw materials. Due to the rapid improvements on communications technology, economic freedom and the continuous promotion of trade liberalization (World Trade Organization, 2008), modern business trend has gradually shifted from multinationalism to globalization. Globalization is not only focused on the continuous global movements of goods and services from one country to another but also the global traffic of human resources. (Steger, 2003: p. 37) With regards to the large supply of available work force in the labour market, medium- and large-scale businesses are taking advantage of hiring competitive employees. Likewise, it is also crucial for businesses today to actively participate in the trading of goods and services in the world market. As part of discussing the valid reasons that makes it important for modern managers today to have a good understanding of the process of globalization, a literature review will be conducted in the study. To give the readers a better understanding of the subject matter, the first part of the literature review will discuss about the general information and the main purpose of globalization followed by analyzing the factors that makes it important for modern managers to have a good understanding of the globalization process. To determine how well modern managers understand the globalization process, a structured personal interview with two selected managers combined with a quantitative research survey will be conducted prior to conclusion. Literature Review General Information Including the Main Purpose of Globalization Globalization is “a process of interaction and integration among people, companies, and governments of different countries which is driven by international trade and investment through the use of information technology.” (The Levin Institute, 2008) Basically, the concept of globalization allows business people to maximize their available financial resources by taking advantage of the low-cost products and services that are readily available from developing countries. Because of the differences in monetary exchange rate, large-scale businesses from developed countries are able to purchase more homogenous products and highly competitive human resources at a much lesser price. Therefore, large multinational companies could easily compete with small-scale local businesses by being able to offer homogenous products to its target consumers at a relatively low market price. (Jain, 2003: p. 1 – 2) Upon analyzing the world market today, globalization plays a crucial role in strengthening the dominance of capitalism within the global economic system which indirectly erodes the importance of local cultures and traditions by establishing a single business culture around the world. (Stiglitz, 2002; Kellner, 1998 & 1997) Aiming to promote global trading, the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) among others have exerted a lot of effort in removing the global trade barriers to increase economic growth among the developing countries. (Mender, Baker, & Korten, 2001) The main purpose of globalization is to promote free trade across the world by removing all possible barriers that will prevent people from allocating the world’s resources more efficiently. (Nanduri, 2006) In the process of promoting free trade in the world market, big multinational companies are expected to earn a more profit by making use of the lowest paid human resources which are readily available in developing countries all over the world (Tasini, 2007). For this reasons, modern managers today are being challenged to have a better understanding with the business process behind globalization. Reasons Why Modern Managers should have a Good Understanding of the Globalization Process Globalization process is actually referring to the business practice that aims to integrate the world economy, culture, technology and business governance including the people who lives in different countries. (Lopez, 2000) Since globalization significantly involves the integration of people with different racial, ethnic, religious, and cultural background, globalization process is not only being powered by the existing technological changes, economic activities, and political forces but also the impact of dealing with a diverse culture that exists in each country (Mcfaul, 2006). Aside from the fact that globalization increases business insecurity, it also contributes to a significant change in the way traditional business processes are being conducted (Connell & Wood, 2005). The significant changes in the way businesses are being operated has shifted from the local movement of goods to a more rapid international trading of goods and services. The shift from a pure national economy into a globalized economy is made possible through continuous global trade, outsourcing of goods and services, foreign direct investment, the use of information and communication technology, migration, and the international capital flows. (Friedman, 2008, p. 49; Bhagwati, 2004) For this reason, Lopez (2000) stated that the “economic power of a country is no longer strongly associated with political power”. Instead of relying too much on political power, the World Trade Organization (WTO) in collaboration with other related agencies like the the General Agreement on Tarrifs and Trade (GATT), International Trade Organization (ITO), International Trade Relations (ITR), G-7/G-8, and the World Economic Forum among others are finding ways to strengthen the existing global trade policies in order to protect the international traders as more businesses are becoming activein the global markets (International Trade Relations, 2008; World Economic Forum, 2008; Barry & Honey, 2001; Anderson & Cavanagh, 1997). To ensure that more businesses are able to take advantage with the consequences of globalization, the World Commission has been made responsible in regulating the world economy in accordance with the social dimension associated with globalization (World Commission, 2003). Given that globalization process is bounded by the economic, polical, and social dimension of each developed and developing country (Lopez, 2000), modern managers are required to have a better understanding with regards to globalization process to enable them to have a better competitive edge as compared with other business people who are very much knowledgable on international trading policies. In line with this matter, modern managers has to be familiar with the continuously changing globalization and business law to avoid unintentionally violating the globally recognized criminal code on issues related to bankruptcy, intellectual property righs, banking procedures, and other related corporate law aside from the standard international trading regulations, rules and other related legal practices (Global Policy Forum, 2008). Research Question(s) For the purpose of this study, the following research questions will be used: How well do modern managers understand the globalization process? Is their knowledge on globalization process sufficient to enable them to represent on behalf of the company to compete in the global markets? Research Plan: Importance of Strategic Questioning, Interview Techniques, & Evaluation A strategic questioning is highly correlated with the accuracy and validity of the survey results such that the data that has been collected through a research survey study or a personal interview will the selected interviewee must always be aligned with the research question of the study. For this reason, it is necessary for the researcher / interviewer to carefully prepare the type of questions to be asked from each survey and interview participant respectively. (Thames Valley University, 2008; Richards, 2003, Chapter 2) The only way to achieve good quality questionnaires is by thorough proper understanding and analysis of the main purpose of the study. According to Keith Richard (2006), “understanding the research process is important when a researcher has chosen to adopt a qualitative research study in order to avoid heading into a wrong direction.” Once the researcher has already written a list of questions, it is essential for the researcher to go through the questions again in order to determine the specific questions that needs to be refined. The work of Keith Richards (2003) has a significant influence on the methodology part of the study particularly in the adopting the proper technique on how to successfully conduct a personal interview. There is absolutely no limitation as to how an interview should be conducted. According to Kvale (1996), the process of interviewing heavily relies on the researcher’s personal judgement rather than a “context- and content-free rules of method” (Kvale, 1996: p. 105). This statement was confirmed by Keith Richards (2006) who stated that “the personal dimension is the central to qualitative research.” In line with this matter, the personal experience of the researcher which includes the knowledge obtained by going through the process of a research study or by simple reading and assessment of the materials we have read. With regards to the gathering of data for the research survey study, the researcher adopted the technique that was presented in the official website of Thames Valley University http://brent.tvu.ac.uk/dissguide/hm1u3/hm1u3text3.htm. The said research technique enabled the researcher to formulate some useful ideas which was applied in the research finding based on the result of the survey questionnaires combined with my personal experience. Research Methodology Globalization is said to helpful to the economy because it widens the opportunity for local businesses to access low-cost yet high quality raw materials. It is also said that globalization can make the costs of labour cheaper since it increases the availability of manpower supply. For this reason, many people have concluded that globalization – as the business trend today, will help in the improvement of a country’s economy. One of the most important factors that will enable the modern managers to keep up with the challenges associated with globalization is to learn more about the globalization process. As part of determining the answers to the research questions, the researcher made use of a combined personal interview based on the structured interview questions that were formulated by the researcher and the research survey questionnaires which was distributed to a total of 100 selected managers who are working in small- and medium-scale businesses throughout the district of London. (See Appendix I – Semi-Structured Interview Questions on page 13) Using the data gathered, the researcher will interpret the result of the research survey and the structured interview results using a combination of quantitative and qualitative analysis. Analysis and Interpretation Structured Interview Results Structured interview questionnaire was used to determine how well the modern managers understand and knows about the globalization process. The first interview is Mr. George White who works as a purchasing manager at Garment Tech. Mr. White reveals that the company he works with is actively engaged in the importation of ladies garments including men’s and children’ sleeping clothes aside from under wears directly from India and China among other countries. Since Mr. White personally search for qualified sources of good quality garments from different countries all over the world, he personally considers knowing the globalization process as an important part of his chosen profession. Mr. White is directly involved in the ordering and outsourcing process of garments. For this reason, part of his duty is to learn how global business transaction works. Even before Mr. White can decide which company and which country Garment Tech should order the garments, part of his responsibility is to know the actual import tax and duties aside from other additional expenses that can be charged to the company. The second interviewee is Mrs. Jeanie Brown who works at Furniture Direct Ltd. as the accountant head. Furniture Direct regularly import high-quality furniture like bed, tables, and chairs by contracting qualified suppliers in developing countries like the Philippines and Malaysia. Similar with the case of Mr. White, Mrs. Brown also perceives and considers the globalization process as guidance when making important business-related decisions that significantly contributes to the business success of Furniture Direct. As the accounting head of Furniture Direct, Mrs. Brown is responsible in ensuring that the company is being charged with the right amount of import taxes and duties including other form of importation expenses like the insurance coverage of goods when transporting the ordered items to London. Likewise, she also monitors the price changes of imported items and consults the purchaser in case there is a huge discrepancy with the market prices of each item we purchase. As compared with Mrs. Brown, it is not clear whether Mr. White has a better understanding with regards to the standard international trading regulations. In line with this matter, Mrs. Brown explained very well that each country has its own legally accepted business practices. Since the international standards on trading regulations still needs to be strengthened, she noted that Furniture Direct still consider the local business practices that are legally recognize in each country the company deals with. Although Mr. White failed to elaborate on this matter, he explained that the management behind Garment Tech is very supportive in terms of giving them a quarterly training that will update them with the significant changes in the international trading regulations. Both Mr. White and Mrs. Brown acknowledge the fact that social issues significantly affect the success of a business’ international trading practices. In line with this matter, Mrs. Brown stated that there is ‘no fix rule when it comes to the proper way of dealing with cultural issues but it is a common knowledge that social aspects like cultural differences of each individual can affect the global success of a company.” Upon explaining that it is not part of their duty to handle matters related to legal issues, Mr. White and Mrs. Brown admitted the limitation of their knowledge and understanding when it comes to international law particularly on topics related to bankruptcy and intellectual property rights among others. Quantitative Research Survey Results Majority of the research survey participants who are currently employed as managers from different companies located in London are male (69%). Out of 100 research survey respondents, 79 are working in a company that is actively engaged in international trading such as sub-contracting or outsourcing of goods and services from developing countries. Seventy-seven percent of the 79 respondents who are working with companies that are engaged in international business transactions are directly involved in the management of international trading. All of the 79 respondents strongly believe that cultural differences of each individual significantly affect the success rate of the companies’ international business practices. However, only 6% knows all the standard international trading regulations. Despite the fact that 65% of workers who work with companies that are engaged in international business transactions knows a little about the standard international regulations, the fact that as much as 29% do not know anything about issues related to the international trading regulations means that a lot of modern managers remain uncompetitive when it comes to understanding the globalization process. Conclusion In order to remain competitive within the global markets, modern managers are being challenged to learn more about the policies and regulations related to the way international business transactions are being conducted. Despite the era of globalization, the research survey combined with the structured interview results revealed that a lot of the modern managers who works in London remains unfamiliar with regards to the standard international trading practices and regulations. To enable modern managers to compete in the global market, corporate management should provide necessary trainings with regards to the globalization process. Appendix I – Semi-Structured Interview Questionnaire 1. Please tell me your name. 2. Where do you work? 3. Does the company you work with engage in international trading such as sub-contracting or outsourcing of goods and services from developing countries? 4. Are you directly involved in the management of international trading? 5. In what way do you consider globalization process important in your line of work? 6. Do you think that social dimension such as cultural differences can significantly affect the success of the company’s international trading practices? 7. How well do you know about the standard international trading regulations and other related rules? 8. Are you familiar with the recent changes in the globalization and business law concerning issues on bankruptcy, intellectual property rights, banking procedures, and other related corporate law? Appendix II – Semi-Structured Interviews with Mr. White Interviewer: Mr. White, thank you very much for allowing me to interview you. Can you just tell me your name and where you work briefly? Mr. White: I am George White. I have been working at Garment Tech for three years as a purchasing manager. Interviewer: Right. Ok. So, tell me. Is Garment Tech involved in any forms of international trading like sub-contracting or outsourcing of goods and services from developing countries? Mr. White: Very much. Since the company officially market ladies garments including men’s and children’ sleeping clothes aside from under garments, we basically order a large bulk of goods from other developing countries like India and China. Interviewer: I see. That’s good to hear. Let me ask you, are you directly involved in the management of international trading? Mr. White: Partly. I personally search for qualified sources of good quality garments from different countries all over the world. However, my duty and responsibility as a purchaser is very much limited with the search for qualified suppliers and the actual ordering based on the stocks we have at the warehouse. Interviewer: Okay. Since you are indirectly involved in the actual international trading, in what way do you consider globalization process important in your line of work? Mr. White: Even though I am not the only person involved in the actual trading process, globalization process is still quite important in my line of work. Since I am directly involved in the ordering and outsourcing of garments, part of my duty is to learn how global business transaction works. For instance, as a purchaser, I need to know the actual import tax and duties aside from other additional expenses that can be charged to our company before I can decide which company and which country Garment Tech should order the goods. Interviewer: I see. Do you think that social dimension such as cultural differences can significantly affect the success of the company’s international trading process? Mr. White: Of course. As a purchase, I am required to deal with the cultural differences in other countries before I can officially close a business transaction with them. Interviewer: Second to the last question. Are you familiar with the standard international trading regulations and other related rules? Mr. White: I know some basic information with regards to the standard international trading regulations since Garment Tech provides us a quarterly training with regards to the significant changes in the global international trading. Since the company I work with is very much dependent on our importation of final goods, Garment Tech management see to it that we are being updated with the latest information concerning the global trading practices. Interviewer: It is good to hear that the company you work with is very supportive when it comes to updating you guys with such important information. (Smile…) For the last question, are you familiar with the recent changes in the globalization and business law concerning issues on bankruptcy, intellectual property rights, banking procedures, and other related corporate law? Mr. White: I know about some issues related to banking procedures but not the bankruptcy, intellectual property rights, and other related corporate law since the company lawyer handles sensitive issues related to legal problems. Interviewer: Alright… Well, Mr. White, thank you very much for your time. Mr. White: You’re welcome. Appendix III – Semi-Structured Interviews with Mrs. Brown Interviewer: Good morning, can you tell me your name and a little information about where you work? Mrs. Brown: Good morning. I am Mrs. Jeanie Brown. I work as an accounting head at Furniture Direct Ltd. Interviewer: Okay. Does the company you work with engage in international trading such as sub-contracting or outsourcing of goods and services from developing countries? Mrs. Brown: Yes. We actually import high-quality furniture like bed, tables, and chairs by contracting qualified suppliers in developing countries like the Philippines and Malaysia. Interviewer: I see. In what way are you personally involved in the management of international trading? Mrs. Brown: As the accounting head of Furniture Direct, I see to it that right import taxes and duties including other form of importation expenses like the insurance coverage of goods when transporting the ordered items to London among others are being charged with the company. I also monitor the prices changes of imported items and consult the purchaser in case there is a huge discrepancy with the market prices of each item we purchase. Interviewer: Okay… Do you consider globalization process important in your line of work as the accountant head of Furniture Direct? Mrs. Brown: Oh yes. Globalization process is very important in my line of work. I actually based a lot of import daily business decision-makings from the globalization process. In my case, globalization process serves as guidance in making the right choices when doing international business transactions. Interviewer: I see. Well, do you think that social dimension such as cultural differences can significantly affect the success of the company’s international trading practices? Mrs. Brown: Yes. There is really no fix rule when it comes to the proper way of dealing with cultural issues. However, it is a common knowledge that social aspects like the cultural differences of each individual can affect the global business success of a company. This is one reason why social issues can change the international business practices. Interviewer: Mrs. Brown, are you familiar with the standard international trading regulations and other related rules? How well do you know about this matter? Mrs. Brown: Each country has its own standard business practices based on their own local business regulations. However, there is also a set of international standards when it comes to the multilateral trading system. Up to the present time, the existing international trading regulation is still weak since we have just recently entered the era of globalization. Since international authorities like the WTO is still in the process of strengthening the existing international trading regulations, ‘we’ at Furniture Direct still consider the local business practices that are legally recognize in each country we deal with. Interviewer: Thank you for that wonderful explanation. For the last question, are you familiar with the recent changes in the globalization and business law concerning issues on bankruptcy, intellectual property rights, banking procedures, and other related corporate law? Mrs. Brown: I am familiar with the banking transactions and procedures since I am directly involved in managing the company’s finances. With regards to the bankruptcy, intellectual property rights, and other issues related to law, I do have an idea with regards to this matter but I admit that I will have to either do my own research work to update me with the changes or simply seek professional advice from qualified lawyers who specializes on international law. Interviewer: Thank you very much Mrs. Brown. It was wonderful to have you as part of the study I am working on. Mrs. Brown: It is my pleasure. I do hope I was able to contribute some useful information with regards to your research study. Appendix IV – Research Survey Result – Quantitative Total Number of Respondents: 100 Question Frequency Percentage 1 How old are you? (%) 26 - 35 23 23 36 - 45 29 29 46 - 55 48 48 2 Gender: Male 63 63 Female 37 37 3 Does the company you work with engage in international trading such as sub-contracting or outsourcing of goods and services from developing countries? Yes 79 79 No 18 18 Maybe 3 3 Note: If yes, kindly proceed to the next question 4 Are you directly involved in the management of international trading? Yes 61 77 No 18 23 5 Do you think that social dimension such as cultural differences can significantly affect the success of the company’s international trading practices? Yes 79 100 No 0 0 6 How well do you know about the standard international trading regulations and other related rules? I know all information regarding international trading regulations 5 6 I know some issues regarding international trading regulations 51 65 I don’t know anything about the international trading regulations 23 29 7 Are you familiar with the recent changes in the globalization and business law concerning issues on bankruptcy, intellectual property rights, banking procedures, and other related corporate law? Yes 9 11 No 48 61 A little 22 28 References: Anderson, S., & Cavanagh, J. (1997). Foreign Policy in Focus. Retrieved October 18, 2008, from World Trade Organization: Vol. 2, No. 14: http://www.fpif.org/briefs/vol2/v2n14wto.html Barry, T., & Honey, M. (2001, July). Foreign Policy in Focus. Retrieved October 18, 2008, from G8 and Global Governance: http://www.fpif.org/briefs/vol6/v6n27g8.html Bhagwati, J. (2004). In Defense of Globalization. New York: Oxford University Press. Connell, R., & Wood, J. (2005). Globalization and Business Masculinities. Men and Masculinities , 7(4):347 - 364. Friedman, T. (2008). The Dell Theory of Conflict Prevention. Emergin: A Reader. Ed. Barclay Barrios. Boston: Bedford, St. Martins. Global Policy Forum. (2008). Retrieved October 18, 2008, from Globalization of Law : http://www.globalpolicy.org/globaliz/law/index.htm International Trade Relations. (2008). Retrieved October 18, 2008, from Official Website: http://www.internationaltraderelations.com/ Jain, S. C. (2003). Toward a Global Business Confederation: A Blueprint for Globalization. Praeger. Kellner, D. (1997). Intellectuals, the New Public Spheres, and Technopolitics. New Political Science , Vol. 41, No. 42, pp. 169 - 188. Kellner, D. (1998). Multiple Literacies and Critical Pedagogy in a Multicultural Society. Educational Theory , Vol. 48, No. 1, pp. 103 - 122. Kvale, S. (1996). Interviews: An Introduction to Qualitative Research Interviewing in Richards K. (eds) Quality in Qualitative Research Keith Richards IATEFL Research Sig Newsletter. August 2006. Issue 18. pp. 1 - 4. Lopez, C. (2000). United Nations Chronicle Online Edition. Retrieved October 17, 2008, from Managing the Globalization Process: THE UN IN THE NEW CENTURY. Vol. XXXVII, No. 4 : http://www.un.org/Pubs/chronicle/2000/issue4/0400p19.htm Mcfaul, T. (2006). Religion in the Future Global Civilization: Globalization Is Intensifying Religious Conflicts. What Will Happen in the Years Ahead? The Futurist , Vol. 40. Mender, J., Baker, D., & Korten, D. (2001). Does Globaization Help the Poor? International Forum oon Globalization Bulletin , Vol. 1, No. 3. Nanduri, R. (2006, March 10). Radiff News. Retrieved October 17, 2008, from Globalization, 30,000 Feet!: http://www.rediff.com/money/2006/mar/10guest.htm Richards, K. (2003). Qualitative Inquiry in TESOL. Hampshire, UK: Palgrave Macmillan, Ltd. Richards, K. (2006). Quality in Qualitative Research. Keith Richards IATEFL Research Sig Newsletter , Issue 18, pp. 1 - 4. Smith, I. G., & Yaw, D. A. (2002). Globalization, Employment and the Workplace Diverse Impacts? Routledge. Steger, M. B. (2003). Globalization: A Very Short Introduction. Oxford University Press. Stiglitz, J. (2002). Globalization and Its Discontents. New York: Norton. Tasini, J. (2007, May 24). Retrieved October 17, 2008, from MSM Discovers: Globalization Creates Inequality: http://www.huffingtonpost.com/jonathan-tasini/msm-discovers-globalizat_b_49222.html Thames Valley University. (2008). Retrieved October 18, 2008, from Primary Data Collection Methods: http://brent.tvu.ac.uk/dissguide/hm1u3/hm1u3text3.htm The Levin Institute. (2008). Retrieved October 17, 2008, from What is Globalization?: http://www.globalization101.org/What_is_Globalization.html Tierney, W. (2004). Globalization and Educational Reform: The Challenges Ahead. Journal of Hispanic Higher Education , 3(1):5 - 20. World Commission. (2003, February 4). Retrieved October 18, 2008, from World Commission on the Social Dimension of Globalisation (WCSDG): http://trade.ec.europa.eu/doclib/docs/2004/july/tradoc_118268.pdf World Economic Forum. (2008). Retrieved October 18, 2008, from The Global Enabling Trade Report 2008 : http://www.weforum.org/en/initiatives/gcp/GlobalEnablingTradeReport/index.htm World Trade Organization. (2008). Retrieved October 17, 2008, from What is the World Trade Organization: http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm Read More