MGT_VIII

MGT 3301, Principles of Management 1

Course Learning Outcomes for Unit VIII At the end of this unit, you should be able to:

6. Explore the implications of competitiveness and collaboration in a global economy. 6.2 Identify the similarities and differences of competitiveness and collaboration in a global

economy. 6.3 Explain whether a competitive or collaborative approach is preferable for a small business.

Required Unit Resources Article: Do the Poor Benefit From Globalization Regardless of Institutional Quality? (ULO 6.2, 6.3) This article explores whether globalization can reduce international poverty (5 pages). Article: After Covid-19, the New Challenges of Globalization: A Case Study From the Wine Sector (ULO 6.2, 6.3) Many businesses suffered during the COVID-19 pandemic, and globalization changed as a result. This article explores these changes and the structural problems (18 pages). Article: The Market Impacts of Sharing Economy Entrants: Evidence from USA and China (ULO 6.2, 6.3) This article examines the role of ride-sharing companies in the collaborative economy and the affects ridesharing has on car ownership and sales (21 pages). Unit Lesson Lesson: Competitiveness and Collaboration in a Global Economy (ULO 6.2, 6.3) The Unit VIII Lesson brings into full circle the many aspects of principles of management. The last unit’s focus concentrates on both competitiveness and collaboration in a global economy. Many may not realize the difference in the economy and the global economy.

The Global Economy First let’s look at the difference in economy and global economy and then how the economy matters to organizational competitiveness and collaboration. The economy consists of businesses, government, or organizations that produce, distribute, and trade goods and services within a country. The global economy is similar, yet it extends internationally to all interconnected worldwide activities among multiple countries that have either a positive or a negative impact on the country that is producing, distributing, and trading goods and services throughout the world. Note: the global economy is often referred to as globalization. Economically, globalization is an interaction among companies and governments on a world scale that involves data and technology, goods and services, and funds and resources.

UNIT VIII STUDY GUIDE Globalization

MGT 3301, Principles of Management 2

UNIT x STUDY GUIDE Title

Competitiveness Versus Collaboration in the Global Market

According to the International Institute for Management Development (as cited in Tutorials Point, n.d.), competitiveness as a strategic analysis of information that allows for sound decision-making. These decisions are often creative and intent to optimize value and prosperity. Additionally, competitiveness also involves the desire of sustained high growth. On the other hand, a collaborative economy requires consumers to work together to meet their needs, rather than rely on large companies (Frankenfield, 2021). For example, consumers may use a marketplace to buy, sell, gift, rent, or trade items or services they need. Often, there is a web-based hub to arrange the transactions, such as Uber or eBay. In addition, a collaborative economy is referred to as a shared economy. Now let’s go further into the lesson of how the global economy works!

How the Global Economy Works Globalization has multiple parts and connects to organizations all over the world. Typically, globalization refers to an economic context, but it is also affected by culture, diversity, politics, and business products and trade. Trade and trading goods have been around since the start of civilization. Early globalization used what is called The Silk Road, a series of trade routes between Central and South Asia, the Far East, North, East, and Central Africa, and Europe (Peters, 2019). Globalization occurred on a grander scale with European exploration of the New World, transferring plants, foods, animals, and an array of different cultures and manufactured goods. Fast forward to more modern times, and with the rapid advancements in communication, technology, and travel, multiple opportunities and innovations arose rapidly. Political and economic stability also helped progress the global economy.

MGT 3301, Principles of Management 3

UNIT x STUDY GUIDE Title

Pros and Cons of Globalization

Globalization provides businesses with a competitive advantage by allowing them to source raw materials where they are inexpensive, mass produce in developing countries with lower labor costs, and maximize profits through leveraging expertise and gain experience through the more developed countries. Management guru, Michael Porter, is known as the father of the MBA and strategy design (Gale, 2022). Porter is known for his research and extensive publications on strategy and competitive advantage (Gale, 2022). Note that globalization includes businesses, products, and services. Cell phone companies that outsource their call centers where labor costs are lower is an example of a competitive strategy. A positive side global collaboration is when the North American Free Trade Agreement, better known as NAFTA, included U.S. automobile companies to relocate to lower cost countries such as Mexico. This was a win-win, positive effect for both the United States and Mexico. The United States benefited by employing individuals at a lower wage cost, and Mexico residents, where many families could not find work, were provided a steady income of wealth in a country where jobs were scarce. This one action resulted in a higher standard of living in an impoverished country. The action also benefited the United States by decreasing the overall cost of production and manufacturing (International Trade Administration, n.d.). When considering all the pros of globalization, there must also be a few cons of globalization to consider. A downside of globalization is that the workers in the more developed countries, such as the United States, are now faced with competing (competition) for jobs with lower-cost markets. This type of competition can cause animosity and demotivation among workers who face the hardship of potentially losing their jobs to a labor force that will work at a lower wage and more hours with no benefits. For some underdeveloped economies that are undergoing rapid change, they are facing working conditions that often have been referred to as deplorable. Some workers are forced to work long hours in dilapidated buildings, some with no heat or air, and others where the surroundings and the building endanger their health. Many countries do not have laws in place to protect the workers or their health! An example of a negative working condition is in Bangladesh where the average worker earns less in a month that the same average U.S. worker earns in a day (National Geographic Education, n.d.). Other negatives of globalization are as follows:

• Struggling economies • Child labor (where many children are pulled from school to work) • Exploitation of workers, as many if not all workers in underdeveloped countries, do not receive

compensation if they are injured at work. Workers in these countries do not have safety measures, safety protection, insurance, tenure, pay raises, or most of the benefits that are required in the United States. This is a critical component of globalization that

MGT 3301, Principles of Management 4

UNIT x STUDY GUIDE Title

warrants further discussion and improvements. Lastly, globalization may be to blame for income disparity and inequality between skilled and unskilled workers and educated and uneducated workers (Biswas, n.d.).

Challenge to Each of Us There is much work to be done as nothing is ever perfect, but globalization is here to stay and will only increase in volume as more businesses and countries continue to collaborate and compete in the global economy. As countries, the economy, and globalization continue to grow, the collaboration among nationalities will hopefully continue to grow and benefit one another more and more. Perhaps individuals should lead the way in standing up and speaking about the benefits of collaboration far outweighing any of the negatives of competitiveness. The challenge for us all is to find a way where globalization is the mainstay in businesses, and we all strive to work progressively forward and work collaboratively to reap mutual benefits that contribute to a more perfect world for all!

References Andrea, S., Franco Luigi, F. P., & Valerio, T. (2022). After Covid-19, the new challenges of globalization: A

case study from the wine sector. International Journal of Management Cases, 24(2), 40–58. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=160356273&site=ehost-live&scope=site

Bergh, A., Mirkina, I., & Nilsson, T. (2016). Do the poor benefit from globalization regardless of institutional

quality? Applied Economics Letters, 23(10), 708–712. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=114607005&site=ehost-live&scope=site

Biswas, A. (n.d.). 9 Advantages and disadvantages of globalization. School of Political Science.

https://schoolofpoliticalscience.com/advantages-and-disadvantages-of-globalization/ Frankenfield, J. (2021, May 29). Collaborative economy. Investopedia.

https://www.investopedia.com/terms/c/collaborative-economy.asp Gale, M. (2022, October 11). A look at Michael E. Porter’s competitive advantage if it were written for 2023

and beyond. Forbes. https://www.forbes.com/sites/michaelgale/2022/10/11/a-look-at-michael-e- porters-competitive-advantage-if-it-were-written-for-2023-and-beyond/?sh=6a56bf901558

Guo, Y., Xin, F., & Li, X. (2020, September). The market impacts of sharing economy entrants: Evidence from

USA and China. Electronic Commerce Research, 20(3), 629–649. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=144801111&site=ehost-live&scope=site

International Trade Administration. (n.d.). North America Free Trade Agreement. U.S. Department of

Commerce. https://www.trade.gov/north-american-free-trade-agreement-nafta National Geographic Education. (n.d.). Effects of economic globalization.

https://education.nationalgeographic.org/resource/effects-economic-globalization/ Peters, M. A. (2019). The ancient Silk Road and the birth of merchant capitalism. Educational Philosophy and

Theory, 53(10), 955–961. https://www.tandfonline.com/doi/full/10.1080/00131857.2019.1691481#:~:text=The%20Silk%20Road %20as%20a%20Persian-China%20global%20route,innovation%20of%20paper%20and%20paper- based%20societies%2C%20and%20gunpowder

Tutorials Point. (n.d.). Global competitiveness.

https://www.tutorialspoint.com/international_business_management/global_competitiveness.htm

MGT 3301, Principles of Management 1

Course Learning Outcomes for Unit VIII At the end of this unit, you should be able to:

6. Explore the implications of competitiveness and collaboration in a global economy. 6.2 Identify the similarities and differences of competitiveness and collaboration in a global

economy. 6.3 Explain whether a competitive or collaborative approach is preferable for a small business.

Required Unit Resources Article: Do the Poor Benefit From Globalization Regardless of Institutional Quality? (ULO 6.2, 6.3) This article explores whether globalization can reduce international poverty (5 pages). Article: After Covid-19, the New Challenges of Globalization: A Case Study From the Wine Sector (ULO 6.2, 6.3) Many businesses suffered during the COVID-19 pandemic, and globalization changed as a result. This article explores these changes and the structural problems (18 pages). Article: The Market Impacts of Sharing Economy Entrants: Evidence from USA and China (ULO 6.2, 6.3) This article examines the role of ride-sharing companies in the collaborative economy and the affects ridesharing has on car ownership and sales (21 pages). Unit Lesson Lesson: Competitiveness and Collaboration in a Global Economy (ULO 6.2, 6.3) The Unit VIII Lesson brings into full circle the many aspects of principles of management. The last unit’s focus concentrates on both competitiveness and collaboration in a global economy. Many may not realize the difference in the economy and the global economy.

The Global Economy First let’s look at the difference in economy and global economy and then how the economy matters to organizational competitiveness and collaboration. The economy consists of businesses, government, or organizations that produce, distribute, and trade goods and services within a country. The global economy is similar, yet it extends internationally to all interconnected worldwide activities among multiple countries that have either a positive or a negative impact on the country that is producing, distributing, and trading goods and services throughout the world. Note: the global economy is often referred to as globalization. Economically, globalization is an interaction among companies and governments on a world scale that involves data and technology, goods and services, and funds and resources.

UNIT VIII STUDY GUIDE Globalization

MGT 3301, Principles of Management 2

UNIT x STUDY GUIDE Title

Competitiveness Versus Collaboration in the Global Market

According to the International Institute for Management Development (as cited in Tutorials Point, n.d.), competitiveness as a strategic analysis of information that allows for sound decision-making. These decisions are often creative and intent to optimize value and prosperity. Additionally, competitiveness also involves the desire of sustained high growth. On the other hand, a collaborative economy requires consumers to work together to meet their needs, rather than rely on large companies (Frankenfield, 2021). For example, consumers may use a marketplace to buy, sell, gift, rent, or trade items or services they need. Often, there is a web-based hub to arrange the transactions, such as Uber or eBay. In addition, a collaborative economy is referred to as a shared economy. Now let’s go further into the lesson of how the global economy works!

How the Global Economy Works Globalization has multiple parts and connects to organizations all over the world. Typically, globalization refers to an economic context, but it is also affected by culture, diversity, politics, and business products and trade. Trade and trading goods have been around since the start of civilization. Early globalization used what is called The Silk Road, a series of trade routes between Central and South Asia, the Far East, North, East, and Central Africa, and Europe (Peters, 2019). Globalization occurred on a grander scale with European exploration of the New World, transferring plants, foods, animals, and an array of different cultures and manufactured goods. Fast forward to more modern times, and with the rapid advancements in communication, technology, and travel, multiple opportunities and innovations arose rapidly. Political and economic stability also helped progress the global economy.

MGT 3301, Principles of Management 3

UNIT x STUDY GUIDE Title

Pros and Cons of Globalization

Globalization provides businesses with a competitive advantage by allowing them to source raw materials where they are inexpensive, mass produce in developing countries with lower labor costs, and maximize profits through leveraging expertise and gain experience through the more developed countries. Management guru, Michael Porter, is known as the father of the MBA and strategy design (Gale, 2022). Porter is known for his research and extensive publications on strategy and competitive advantage (Gale, 2022). Note that globalization includes businesses, products, and services. Cell phone companies that outsource their call centers where labor costs are lower is an example of a competitive strategy. A positive side global collaboration is when the North American Free Trade Agreement, better known as NAFTA, included U.S. automobile companies to relocate to lower cost countries such as Mexico. This was a win-win, positive effect for both the United States and Mexico. The United States benefited by employing individuals at a lower wage cost, and Mexico residents, where many families could not find work, were provided a steady income of wealth in a country where jobs were scarce. This one action resulted in a higher standard of living in an impoverished country. The action also benefited the United States by decreasing the overall cost of production and manufacturing (International Trade Administration, n.d.). When considering all the pros of globalization, there must also be a few cons of globalization to consider. A downside of globalization is that the workers in the more developed countries, such as the United States, are now faced with competing (competition) for jobs with lower-cost markets. This type of competition can cause animosity and demotivation among workers who face the hardship of potentially losing their jobs to a labor force that will work at a lower wage and more hours with no benefits. For some underdeveloped economies that are undergoing rapid change, they are facing working conditions that often have been referred to as deplorable. Some workers are forced to work long hours in dilapidated buildings, some with no heat or air, and others where the surroundings and the building endanger their health. Many countries do not have laws in place to protect the workers or their health! An example of a negative working condition is in Bangladesh where the average worker earns less in a month that the same average U.S. worker earns in a day (National Geographic Education, n.d.). Other negatives of globalization are as follows:

• Struggling economies • Child labor (where many children are pulled from school to work) • Exploitation of workers, as many if not all workers in underdeveloped countries, do not receive

compensation if they are injured at work. Workers in these countries do not have safety measures, safety protection, insurance, tenure, pay raises, or most of the benefits that are required in the United States. This is a critical component of globalization that

MGT 3301, Principles of Management 4

UNIT x STUDY GUIDE Title

warrants further discussion and improvements. Lastly, globalization may be to blame for income disparity and inequality between skilled and unskilled workers and educated and uneducated workers (Biswas, n.d.).

Challenge to Each of Us There is much work to be done as nothing is ever perfect, but globalization is here to stay and will only increase in volume as more businesses and countries continue to collaborate and compete in the global economy. As countries, the economy, and globalization continue to grow, the collaboration among nationalities will hopefully continue to grow and benefit one another more and more. Perhaps individuals should lead the way in standing up and speaking about the benefits of collaboration far outweighing any of the negatives of competitiveness. The challenge for us all is to find a way where globalization is the mainstay in businesses, and we all strive to work progressively forward and work collaboratively to reap mutual benefits that contribute to a more perfect world for all!

References Andrea, S., Franco Luigi, F. P., & Valerio, T. (2022). After Covid-19, the new challenges of globalization: A

case study from the wine sector. International Journal of Management Cases, 24(2), 40–58. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=160356273&site=ehost-live&scope=site

Bergh, A., Mirkina, I., & Nilsson, T. (2016). Do the poor benefit from globalization regardless of institutional

quality? Applied Economics Letters, 23(10), 708–712. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=114607005&site=ehost-live&scope=site

Biswas, A. (n.d.). 9 Advantages and disadvantages of globalization. School of Political Science.

https://schoolofpoliticalscience.com/advantages-and-disadvantages-of-globalization/ Frankenfield, J. (2021, May 29). Collaborative economy. Investopedia.

https://www.investopedia.com/terms/c/collaborative-economy.asp Gale, M. (2022, October 11). A look at Michael E. Porter’s competitive advantage if it were written for 2023

and beyond. Forbes. https://www.forbes.com/sites/michaelgale/2022/10/11/a-look-at-michael-e- porters-competitive-advantage-if-it-were-written-for-2023-and-beyond/?sh=6a56bf901558

Guo, Y., Xin, F., & Li, X. (2020, September). The market impacts of sharing economy entrants: Evidence from

USA and China. Electronic Commerce Research, 20(3), 629–649. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=144801111&site=ehost-live&scope=site

International Trade Administration. (n.d.). North America Free Trade Agreement. U.S. Department of

Commerce. https://www.trade.gov/north-american-free-trade-agreement-nafta National Geographic Education. (n.d.). Effects of economic globalization.

https://education.nationalgeographic.org/resource/effects-economic-globalization/ Peters, M. A. (2019). The ancient Silk Road and the birth of merchant capitalism. Educational Philosophy and

Theory, 53(10), 955–961. https://www.tandfonline.com/doi/full/10.1080/00131857.2019.1691481#:~:text=The%20Silk%20Road %20as%20a%20Persian-China%20global%20route,innovation%20of%20paper%20and%20paper- based%20societies%2C%20and%20gunpowder

Tutorials Point. (n.d.). Global competitiveness.

https://www.tutorialspoint.com/international_business_management/global_competitiveness.htm