(Steger, 2003: p. 37) With regards to the large supply of available work force in the labor 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. Prior to conclusion, reasons behind the need to implement and promote cultural diversity within the work environment will be tackled in details.
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