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© Cambridge University Press 2012 AREA OF STUDY 2 UNIT 4 MANAGING PEOPLE AND CHANGE CHAPTER 15 GLOBALISATIO N THE MANAGEMENT OF CHANGE
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© Cambridge University Press 2012
AREA OF STUDY 2
UNIT 4MANAGING PEOPLE AND CHANGE
CHAPTER 15GLOBALISATION
THE MANAGEMENT OF CHANGE
© Cambridge University Press 2012
What is globalisation?
Globalisation impactson countries,organisations andcitizens across theworld.
© Cambridge University Press 2012
What is globalisation? (cont.)Globalisation is the removal of economicboundaries, which creates free internationaltrade and movement of capital betweennations. It also involves the integration ofbusinesses and economies with enterprisescompeting with each other.
© Cambridge University Press 2012
Causes of globalisationA number of factors are responsible for thegrowth of globalisation, including people andcapital moving between countries, reducedtrade barriers, increased global mediainfluence, cheaper and faster telecommunication,and technological advancements.
© Cambridge University Press 2012
Benefits of globalisation There are many benefits associated withglobalisation, including gaining access tomarkets around the world, improved standardof living, increased rate of economic growth,increased opportunities to take advantage ofeconomies of scale.
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Costs of globalisationAs well as benefits, there are also costsassociated with globalisation. Some of these are:• Operation of the organisations may impact
on the environment.• Domestic industries in poorer countries
may find it difficult to survive against thecompetition.
© Cambridge University Press 2012
Costs of globalisation• Domestic industries
in poorer countriesmay find it difficult to survive against thecompetition.
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Costs of globalisation (cont.)
• Trade in goods with ‘cultural content’ maybe at the expense of local cultures and traditions.
• Profits and wealth generated are taken out of the country.
• Global cartels may be outside the control ofsovereign governments.
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Globalisation as a pressure for change on organisations
Globalisation impacts on many organisationalstakeholders in the following ways:• Suppliers – relationships may change.• Customers – may allow consumers to access
a wider range of goods and services.
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Globalisation as a pressure for change on organisations (cont.)
• Employees – employees may be transferredto another country.
• Trade unions – unions may be concernedabout the impact of multinational companieson pay and working conditions.
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Globalisation as a pressure for change on organisations (cont.)
• Competitors – if a competitor expands intothe global market, the organisation mayhave to develop similar strategies.
• Governments – policies may impact on tradebarriers and restrictions, taxation, exchangerates and financial policies.
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Globalisation as a pressure for change on organisations (cont.)
• Organisational human resource management(HRM) policies may need to be developed totake into account cultural differences.
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Australian organisation and the global economy
The impact on the Australian economy due toglobalisation has been:• The economy has become more
internationalised.• Productivity has increased.• Living standards have improved.
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Australian organisation and the global economy (cont.)
• Tariffs have been lowered.
• New management techniques and skills haveemerged.
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Australian organisation and the global economy (cont.)
• Outsourcing of non core business hasincreased.
• Increased specialisation.• Increased use of technology.
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The impact of globalisation on organisations
The impacts of globalisation on the structureand activities of the organisation include:• a focus on core business• the development of competitive advantage
areas• the development of quality programs
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The impact of globalisation on organisations (cont.)
• greater complexity of relationships with suppliers
• more difficult financial management• changes required in HRM
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The impact of globalisation on organisations (cont.)
• global mergers, takeovers and horizontal and vertical integration may become necessary
• a number of social responsibility implications.
