© Cambridge University Press 2012 AREA OF STUDY 2 UNIT 4 MANAGING PEOPLE AND CHANGE CHAPTER 15 GLOBALISATION THE MANAGEMENT OF CHANGE

© Cambridge University Press 2012 What is globalisation? Globalisation impacts on countries, organisations and citizens across the world.

© Cambridge University Press 2012 What is globalisation? (cont.) Globalisation is the removal of economic boundaries, which creates free international trade and movement of capital between nations. It also involves the integration of businesses and economies with enterprises competing with each other.

© Cambridge University Press 2012 Causes of globalisation A number of factors are responsible for the growth of globalisation, including people and capital moving between countries, reduced trade barriers, increased global media influence, cheaper and faster telecommunication, and technological advancements.

© Cambridge University Press 2012 Benefits of globalisation There are many benefits associated with globalisation, including gaining access to markets around the world, improved standard of living, increased rate of economic growth, increased opportunities to take advantage of economies of scale.

© Cambridge University Press 2012 Costs of globalisation As well as benefits, there are also costs associated 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 the competition.

© Cambridge University Press 2012 Costs of globalisation Domestic industries in poorer countries may find it difficult to survive against the competition.

© Cambridge University Press 2012 Costs of globalisation (cont.) Trade in goods with ‘cultural content’ may be 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 of sovereign governments.

© Cambridge University Press 2012 Globalisation as a pressure for change on organisations Globalisation impacts on many organisational stakeholders in the following ways: Suppliers – relationships may change. Customers – may allow consumers to access a wider range of goods and services.

© Cambridge University Press 2012 Globalisation as a pressure for change on organisations (cont.) Employees – employees may be transferred to another country. Trade unions – unions may be concerned about the impact of multinational companies on pay and working conditions.

© Cambridge University Press 2012 Globalisation as a pressure for change on organisations (cont.) Competitors – if a competitor expands into the global market, the organisation may have to develop similar strategies. Governments – policies may impact on trade barriers and restrictions, taxation, exchange rates and financial policies.

© Cambridge University Press 2012 Globalisation as a pressure for change on organisations (cont.) Organisational human resource management (HRM) policies may need to be developed to take into account cultural differences.

© Cambridge University Press 2012 Australian organisation and the global economy The impact on the Australian economy due to globalisation has been: The economy has become more internationalised. Productivity has increased. Living standards have improved.

© Cambridge University Press 2012 Australian organisation and the global economy (cont.) Tariffs have been lowered. New management techniques and skills have emerged.

© Cambridge University Press 2012 Australian organisation and the global economy (cont.) Outsourcing of non core business has increased. Increased specialisation. Increased use of technology.

© Cambridge University Press 2012 The impact of globalisation on organisations The impacts of globalisation on the structure and activities of the organisation include: a focus on core business the development of competitive advantage areas the development of quality programs

© Cambridge University Press 2012 The impact of globalisation on organisations (cont.) greater complexity of relationships with suppliers more difficult financial management changes required in HRM

© Cambridge University Press 2012 The impact of globalisation on organisations (cont.) global mergers, takeovers and horizontal and vertical integration may become necessary a number of social responsibility implications.