Associated with the developing technology, globalization as a trend being increasingly incorporated in multinational companies leads to interdependence among the countries. The singular aim is, of course, expanding the business.
Where for some “underprivileged” citizens, globalization had been the blessing in disguise by merging differences and creating more opportunities in the world of business, others have felt its impact forcefully with a not-so-positive stance. The growth can be both exciting and dangerous depending on the way the risks are confronted.
To overcome the following common challenges that this phase includes, companies need to look for managers, with a strong awareness of and insight into both local and international processes of the respective industry, who can effectively turn these potential opportunities into profitable ventures within the global economy.
Challenge #1: Cultural Differences
You are aliens to them and, reciprocally, their culture unknown to you. It is not only the geographical location that influences these differences, although, that matters too specifically in terms of the time zones. The religious diversity and ethical considerations usually make people uncomfortable around and in conversation with each other despite working for a common objective.
There are more likely to contrary views than mutual agreements. Secondly, this aspect also covers the fact that they need to localize their products, giving it a cultural identity and, hence, diversifying their product offers, while serving their purpose in order to encourage consumerism in the particular region.
Challenge #2: Regulatory Problems
Globalization has indeed facilitated the rapid growth of industrial markets globally. Keeping in check with the safety protocols, individual governments, too, are not far behind to continually update and enforce regulatory policies. Increasing uncertainty, especially the environmental, energy and financial policies becomes a hurdle when the incoming profits are affected. They may even experience a hike in costs due to this.
Challenge #3: Resource Limitations and Supply Chains
Since a majority of companies are now hiring or outsourcing their individual projects for their cost-effectiveness and specialized skills, it tends to create a shortage in key functions. It does, in fact, create a better quality and an innovative, efficient, and dynamic workforce. For the survival in a globalised economy, however, the management should make sure that resources (raw materials, production, labor, and services) are available as well as leveraged properly.
Most companies working globally rely on small inventories to avoid losses due to uncertain demands. The planning for supply chains is further influenced by competition for raw materials, changes in commodity rates, and from the unpredictable weather changes. Encouraging people to be part of your entrepreneurship, allowing local and foreign workforce to develop through constant learning, and managing the environmental resources through proper planning can help achieve this.
In reality, there is an overload of information that needs to be converted into valuable information. With strategic thinking and problem solving ensuring training and improved communication within your global enterprise you save future embarrassments or errors. After all, globalization should not be treated as an excuse in the extremes of avoiding or exploiting new ways for the benefit of the industry.
