Unit VIII Journal

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Course Learning Outcomes for Unit VI Upon completion of this unit, students should be able to:

3. Synthesize the role of leadership in strategic business planning. 3.1 Compile a presentation of possible problems and solutions for an organization.

5. Explain implementation, control, and measurement in overall evaluation of business strategies.

5.1 Evaluate the implementation of solutions to organizational problems. 5.2 Analyze the processes that influence control and management of an organization.

6. Assess the ethical parameters of strategic business models.

6.1 Explore the issue of motivating organizational employees. 6.2 Explain how to implement recommended solutions with professional and ethical integrity.

Required Unit Resources Chapter 10: Global Strategy: Competing Around the World MiniCase 10: Hollywood Goes Global, pp. 503–507 Unit Lesson Today the topic of discussion surrounds globalization. What exactly is globalization? How does it affect all of us? Is it good or bad? Is it here to stay? Rothaermel (2019) defines globalization as the exchange between different countries and people worldwide. Globalization as a whole has increased over the years, primarily as a result of advancements in technology and reductions in transportation costs and trade barriers. Globalization has increased the standards of living for many countries, and interdependence amongst countries is significantly greater than ever before historically. Globalization surfaces through multinational enterprises (MNEs), which are depicted by a company that utilizes or sells goods and services in at least two countries. The second area globalization is demonstrated is through foreign direct investment (FDI), which involves any type of financial investment with at least two countries. At the most basic of levels, why do companies expand internationally or globally? According to Cateora et al. (2020), the foremost reason is to gain access to a larger market. These companies can gain access to markets to which they may have not otherwise been exposed. Their products and services may already be maximized in their home country; thus, a new country would afford new opportunities. Additionally, companies can take advantage of economies of scale and scope by providing greater production efficiencies leading to financially lucrative efficiencies. A second reason is to potentially gain access to low-cost input factors. This could be in the form of less expensive raw materials or lower labor costs. Countries like China have increased their manufacturing power because of low labor costs and an efficient infrastructure. A third reason is to develop new competencies, which suggests that a company might locate a facility in a geographical location that could provide communities of learning. What this entails is benefitting from being located near a hub of information or talent that could enhance the company (Cateora et al., 2020). Are there disadvantages of companies expanding internationally? There are several potential disadvantages with the first being the liability of foreignness. Unfamiliar cultural and economic environments, as well as the long geographic distances, can create complexities. There could also be some loss of reputation as a company loses some level of control when conducting business abroad. Another potential disadvantage is the

UNIT VI STUDY GUIDE Global Strategic Management

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loss of intellectual property because differences in business operations in different countries become apparent. Another potential disadvantage lies in the outsourcing of jobs through the hiring of lower paid workers from other countries. In the United States, this dilemma has been batted around the boardroom as Americans losing jobs to foreign workers contributed to the unemployment rate. In spite of this, it is hard to ask companies to pay significantly higher labor rates for U.S. labor. This leads to higher overall product costs, causing more expensive product prices for consumers. One area that clearly demonstrates this is technology and/or call center outsourcing where U.S. companies have outsourced information technology (IT) jobs to India and China. This might be an experience that we have all dealt with as we look for phone IT or customer service assistance. Four countries—Hong Kong, Singapore, South Korea, and Taiwan—are referred to as the Four Asian Tigers because of their exceptionally high growth and expansion rates (over 7% growth rate) during the period between 1960 to 1990 (Perreault et al., 2017). These countries experienced such rapid industrialization that they quickly moved to developed country status. Singapore and Hong Kong hold a significant competitive advantage in the financial area with Taiwan and South Korea leading in the electronic components area. With the idea of emulating this model and achieving similar growth patterns, the Tiger Cub Economies developed. Countries included in this movement are Indonesia, Malaysia, Philippines, Thailand, and Vietnam. Most scholars and business managers well-versed in the art of successful international trade will agree that collaboration and trade agreements leading to solid partnerships are the basis of efficient and effective strategic globalization efforts (Hill & Hult, 2018). There are a significant number of organizations and agreements that have been established over the years to encourage collaboration and partnerships between nations. This quick activity will help you to learn more about some of the most long-standing, impactful organizations. The alternative format for this activity is also available. Each of these collaborative organizations encourage economic growth and prosperity for its members through a joint partnership. Some apply to certain geographic areas (i.e. the Asia-Pacific Economic Cooperation [APEC]), which takes into consideration the specific needs of those within the Asia-Pacific area. The interesting characteristic about this region is that more than half the population of our entire planet resides in this area, and the economies of the countries in this region are growing at an incredible pace. Economic growth and prosperity have been linked to innovative thought and levels of technological advancement within an organization. Assuming this to be true, a report compiled by U.S. News & World Report is of great significance (Radu, 2019). This report suggested that technological expertise levels are highest in Sweden, Switzerland, Russia, Singapore, United Kingdom, Germany, China, South Korea, United States, and Japan. If someone was starting a new technology company or looking for a new branch of a technology company, he or she would probably consider one of these areas to ensure proximity to the highest level of talent. In dealing with these countries or any foreign countries, organizational leaders should think about inventive communication methods. Cultural diversities within countries should be embraced and stereotypes shelved. Language barriers, nonverbal behaviors, values differences, and decision-making process differences all contribute to the effectiveness of foreign communication/negotiations between businesses. What does this mean to foreign leaders attempting to work through business dealings? Besides the obvious language barriers, nonverbal behaviors are unique in different cultures. For instance, the Japanese communication style includes less eye contact, few facial expressions, and more periods of silence than what is practiced in the United States. If conducting business in Saudi Arabia, it is important to research the culture and religion and to learn how to show respect to these aspects of the business culture. Nigeria has challenges including corruption, cyber threats, terrorism, and political risks. Hong Kong has been viewed as an ideal location for foreign investment (Mourdoukoutas, 2006). In spite of this, with any foreign country dealings, it is appropriate to understand their financial position, currency fluctuations, taxes, and other allowances and fees. Take a look at the World Business Culture website, which enables you to insert any country into the search bar and learn about common business practices. Think of the value of a tool like this if you were to conduct a business meeting in a foreign country. It is important to understand and embrace the practices of the country in which you are looking to conduct business. This will ensure a smooth and effective global business arrangement.

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In conclusion, globalization has created enormous efficiencies and opportunities within businesses around the world. Cited advantages include lower opportunity costs, economic growth, and reduced market volatility. Advancements in technology have become a platform for sharing innovative thought and embracing worldwide partnerships that are mutually beneficial. Under-developed countries have advanced their overall economic conditions towards developed country status. While debate still arises as to the overall impact of globalization, one thing is certain: it is here to stay. As a strategic leader within an organization, understanding the implications of foreign partnerships and aligning with the overall mission of the organization is crucial in adopting a strong global strategic plan.

References Cateora, P. R., Gilly, M. C., Graham, J. L., & Money, R. B. (2020). International marketing (18th ed.).

McGraw-Hill Education. Hill, C. W. L., & Hult, G. T. M. (2018). International business: Competing in the global marketplace. McGraw-

Hill Education. Mourdoukoutas, P. (2006). Business strategy in a semiglobal economy.

https://libraryresources.columbiasouthern.edu/login?url=http://search.ebscohost.com/login.aspx?direc t=true&db=e000xna&AN=199735&site=ehost-live&scope=site

Perreault, Jr., W. D., Cannon, J. P., & McCarthy, E. J. (2017). Essentials of marketing: A marketing strategy

planning approach (15th ed.). McGraw-Hill Education. Radu, S. (2019, February 1). Top 10 countries for technological expertise, ranked by perception.

https://www.usnews.com/news/best-countries/slideshows/top-10-countries-for-technological- expertise-ranked-by-perception

Rothaermel, F. T. (2019). Strategic management: Concepts (4th ed.). McGraw-Hill Education. Suggested Unit Resources In order to access the following resource, click the link below. The souvenir food market in Indonesia is so flooded that many businesses are failing. Therefore, businesses in this industry have had to research and try many different strategies. This article explores this topic and gives a real-life example of how strategy can make or break a company. Nofrizal, Soviyanti, E., Khairani, Z., Ciptono, W. S., & Hanafi, M. M. (2019). Finding most effective strategy for

MSMEs food souvenir in Indonesia. Academy of Strategic Management Journal, 18(2), 1–14. https://search-proquest- com.libraryresources.columbiasouthern.edu/docview/2238481597?accountid=33337