Value Chain Management - Essay Example

This can go a long way in providing sustainability and giving them economic independence. All this has basically been accomplished by outsourcing. Developed economies with their high quality of life and wage rates, are facing problems of producing profitably locally. This is also because many tax laws and limited raw materials make it impossible to remain competitive locally. With advent of faster communication system it becomes easy to control organizations from thousands of miles away. This also helps in establishing close links with the managers working in remote ventures.

Another development which has made this trend towards globalization possible is WTO. The World Trade Organization encourages free trade among countries. Previously it was not possible to import unlimited amount of good from foreign countries. With the advent of WTO it has become possible to actually outsource because WTO has abolished the quota system. Therefore corporations try to outsource as much as possible from countries where there are high levels of human resources, raw materials and energy.

This automatically helps developing nations to prosper because when corporations outsource they become part of a ‘value chain’. The addition made by them to this value chain gives them their share of the profit thus bringing them income prosperity. This phenomenon has given birth to a new form of economic entities called emerging markets. The current emerging markets include Brazil, India, China, Russia, Mexico etc. This globalization also has a dark side. It is also widely believed that globalization has increased income disparities at the global level.

The smaller economic corporations operating from underdeveloped countries which lacked resources to go global have found it almost impossible to survive. Their small local markets have been attacked by global corporations. The corporations achieve significant cost advantages due to