Question

Write in your own words minimum 500 words

1. Please give some examples of how the management function and decision making strategy would change with a company dealing with globalization.

Please include the references

Answer 1

In the changing scenario where the world has become a new global village, many organizations are also turning global. In this process of transition from national to international organization several organizational changes takes place. These changes should be made in a way that they minimize cost and resistance within employees while they ensure that the effectiveness of change efforts is maximized.

In order to remain competitive, and to survive in today’s business environment globalization is a key. While the organizations are in the phase to globalization, it is important to bring in the required change in several business functions. The demand for change arises as the legal, competitive, technological, and economic environments changes with global market. This also impacts management function and decision making strategy.

In order to cope up with global standards and gain long term success it is important to bring change in management function and decision making strategy. One example of such a change is General Motors. In order to survive in global market General Motors took some decisions that demanded major change in their management functions and were in favour of their global success. GM started manufacturing their vehicles in China rather than their country of origin. Several factors derived this major change in GM.

Decision making strategy also needs to be changed as per the requirement. The laws related to labour and resources are different in different countries. They have impact in the way decisions are made. One example is from U.S.; when in spring of 2018, Trump increased the tariff of many Chinese goods, and in turn Chinese government increased tariff on import of American goods. In this case Chinese companies have lessened their import from U.S. manufacturers and this has increased the warehouse cost of U.S. companies and the decision relating the production of goods have to be changed as per the new demand.

Another example is of Ernst & Young (EY) that provides their services globally. They have to stick to international and local regulatory framework while performing business outside the country of origin. With the change in country their management functions change however, their decision making is centralized. They follow the aim of providing quality in their services and doing what is right.

When the organization is dealing with globalization it is important that they bring transition in their management function and decision making process as per the requirement of new culture. This is important to ensure their success in long term.

Reference:

• Thomas S. Bateman and Carl P. Zeithaml; 1993; Management: Function and Strategy; Irwin; 2^nd Edition.
• Patrick Gleeson; 2018; How Does Globalization Affect an Organization's Business Approach?