e-con 183 transcript

8/3/2019 E-con 183 Transcript

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BUSINESS COMMUNICATION (PART - 31)

ADAPTION TO THE GLOBAL BUSINESS

1.INTRODUCTIONHello studentsWelcome to the series of business communication. Today we are going tostudyThe adoption to the global business. In this we are going to cover

The global business practices The strategies to adjust with global practices The basic aspects of the multinational companies How they operate in global in global markets Their environments Basic socio-political system governing those practices The impact of IT and the labor forces on this market.

In words of Jack Welch,Globalization has changed into a company thatsearches the world not just to sell or to source but to find intellectualcapital, the worlds best talents and greatest ideas.

Globalization is a very big which is impacting the business practices whichhas shaped the communication to the new detail, the communication isalso by the strategies and the policies and the international laws whichgovern the businesses.

Strategy -How businesses take place are determinant or take shapeaccording to the design of the strategy, strategy is design in such a wayso as to create new markets, spot new products and to elaborate thebusiness diversifications to the new market.

The international growth in todays era is important because we are inthe

Era of globalization where the interconnected world is happening anew way of civilization

Through the internet and technology we have reached to themillions of the people


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The growth is through acquisition, mergers, and joint venturesmuch issue which impact the world processes.

The factors impacting the global business practices. The basic factors

are:- Political Social Economical technological

Political FactorsNow the political force is the biggest force. Before starting a business youdefinitely have to understand the political philosophy of a particularcountry. The political doctrine is important because this

Gives the stability to the business The basic ethics or the subsidiaries or the basic structure to the

shape is given by the policy of government

Any kind of political instability or terrorism or war like situation willput a negative impact on the businesses, so countries like Iran, Iraqor the American countries which are genuinely in the cold war erado think before they operate their offices over there.

Economical Factors

The economic factors are important because it is very essential to study tax system legal systems monetary policies fiscal policies commodity prices basic stock prices available over there Maturity of the financial markets available in a particular country

and the exchange rates.

Exchange rates would determine the price of a commodity indomestic and a host market in a different way.

Ethics of each country you can go for multilateral agreements ormultilateral trade relationships.


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Social FactorsSocial factors are important because business exists into a social context,which are designed by

values

Norms Practices Languages Cultural Religion.

Any product which puts a positive impact on the host population of thelocal design of the culture is accepted by the people, so any globalcompany also has to take into consideration the local concepts.

Technological Factors Technological factors do shape business to a very big stretch, the

technological impacts that

availability of the bandwidth in a particular country ownership of the PC impact of IT education over there Kind of awareness is there. The compatibility of technology in the host country is essential to

build up operating system in the foreign destination.

Now this is all about the factors which shape the forces of globalization,globalization is the system of interconnected economies and countriesworking together into a single kind of a market system where theproducts and principles and the system and services merge together togive you better services with better options.

2.THE WORLDS MAJOR MARKETSThe worlds major market places and their clustersThe world is divided into many parts:-

High income countries Upper middle income countries Low income middle countries Low income countries ( these are the developing countries )


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The total geographical clusters of the world are significantly:-

North American countries European countries

Pacific Asian countriesThis power relationship which the world shares, now this powerrelationship has changed in the course of time. After the post-worldwar-11 era, a new era of business and connectivity has been there. Peoplehave started realizing that the self-prosperity is dependent, if the othercountries are helping you and supporting you.So came the NAFTA (North American free trade agreement), nowaccording to this trade agreement, the trade barriers have been releasedor they have been eased out, the foreign investment and the tradebalances, they have been fair for people so as to do business with

connected countries. This kind of agreement or the NAFTA i.e. NorthAmerican free trade agreement was done between Canada, Mexico andUnited States.

The emergence of the European Unions- European countries cameconnected and they eased out

their barriers visa and passport regulations travel became free currency became one Business became very easy because by this the suppliers and the

stakeholders, the customers were connected by many countries puttogether.

This made the business practices very easy and the cost of supply ofgoods reduces. This is the new era of ethics of doing businesses.

The revolution which came into the business practices were the post liberalization era which changed the total concept of doing

business The emergence of GATT (General agreement on tariff and trade)

was a big kind of revolution, this was signed in which we has easedout the trade barriers and we reduced the tariffs and quotasystems.

the world trade organization which emerges in 1995 on 1st January,the WTO (World Trade Organization) came up so as to dictate fair


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practices to business world, so as to govern the policies of themultilateral relationship between various countries and to establishfair procedures, legal procedures in such a way that the businessesare shape by the best practices.

The basic ethics which govern the international business and theglobalization practices were through exports and imports.

Exports- It is when you sell the goods in foreign countries.Imports-When you buy goods from foreign countries and sell in the hostcountry.This basic relationship of trade in terms of export and import governs thebalance of payment, if the balance of payment position is favorable, thenthe country is prosperous and the country is rich.If the balance of payment position is negative i.e. your imports are higher

than the exports, then the foreign exchange is less and the country facesproblem in terms of money requirements.Now the exchange rate of the country at a particular situation dictatesthe business rates.Suppose the foreign exchange rate or the value of currency is very high,so for this country it will be difficult to export because the cost ofproduction of goods is very high, so this country restore on import ofgoods from cheaper market.But if exchange rate is low i.e. the currency is weaker, in that market the

exports will be favored because you get higher prices and to import willbe really difficult.

3.GOING GLOBALGoing international- is a big way or it is an ethic which is done on thebasis when you haveSome business practices which do need better practices

better diversification

better markets better practices

When you enter into a domestic market and you see new opportunities,you try to export things.


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The first entry of going international is by establishing your branchoffices in foreign countries or though outsourcing or off-sourcing. Theseare the basic practices or the first step to go international market, theneither these business practices could be govern by exports you do, theimport you do or you establish your international firms and office there.

The basic agents who govern the market could be the supply agents orthe dealers or the commission agents which are in the internationalmarket which dictate the supply chain.

The strategic alliance or joint venture is a big way which businesspractices arrange because the cost of investment is very high and thetechnology transfer from two countries is difficult, so we form strategicalliance so as to reduce the cost of investment and have better practices

through better technology.

The FDI (foreign direct investment) is another way of opting businessesin foreign market, now lets see this diagram

this is

the international involvement through globalization there is high involvement in foreign markets through Foreign Direct

Investment

strategic alliances Branch offices.


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There is low involvement when you go for licensing and or forindependent agents.

The barriers to international trade still dictate the market because it is

a difficult practice to go global or to go international, you have the socio cultural differences the economic difference the legal impact which governs the business practices People who are able to overcome these barriers are able to work in

international markets and if the barriers could not be overcome,the practices can go wrong and you can enter into loses.

Legal and political difference -generally relates to

quota practices tariff system subsidies offered by various governments each country is different monetary and fiscal policies control of the ownership rights patent rights intellectual property rights

Everything is different so the business practices have to study the variouslaws of the host country and the guest country. Most of the times thethings became difficult because most of the practioners of the businessform cartels were they control the supply and the prices of the goods. Somay be the foreign prices are governed, not by government structure butthey are governed by free market economics where most of the playerscome into the market and try to dictate their own prices according to thedemand and the supply.

4.THE STRATEGY FOR GLOBALISATIONThe strategy to become global, first of allEstablish business in domestic aspect or must company in your own right.This company can go international by opening a branch office in foreigncountry and when the branch office is successful, it can become amultinational company.


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Multinational company the company manufacture designs and marketsthe products according to the various markets available in theinternational market, so the multinational company is a more complexbusiness where many markets are connected, where many strategies,where many advertisement strategies and many distribution channelswork on to sell the products.

The advantage of multinational company is they try to differentiate theirproducts in term of the local availability and work on cost ethics i.e. theybuy from the market where goods are cheaper and sell into the marketwhere goods are sold at higher prices.

The TNCs (transnational companies) - which go into the markets and

sell the same standardized products.International companies- are those companies who have the universalbrand working all over the world, like you have the Sony or you have IBMcompanies, selling the same products at all markets and at all regions.

Globalization - is a force where the national economies and the businesssystems are becoming interlinked in such a way that the basicdiversification takes place at specific needs according to the needs of thebusiness markets and the practices. The market economy has emerged in

such a way that the socialism and capitalism forces have become weak.The economic independence has become important, the technologicalconnectivity has become important, the dictation of market is not bypatriotism profits, the cost governs the ethics, and the total market islike a neighborhood, you buy things at lower cost and work on priceethics.


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Now the communication and the transportation cost which govern theglobal market are shown in this diagram.

Telecommunication which impacts the world market is the internet the satellite connectivity The wireless technology making the world like a global village.

The optical fiber is also impacting the business practices.

The factors of production in the global market, here the factors ofproduction

A.laborB.energyC.landD.capital are become universally available for people

The kind of legal barriers are decreasing, people can owned resources in

any country and at any point according to the prices which they have. Soglobalization of market is not only to share an idea or a product, it is atransfer of knowledge, knowledge portals, it is kind of an agenda or aforum where you are not only sharing products but you are operating,strategy are also being shared, your process is synchronized and brandnames are also working.


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The constraint of globalization forces -working into the internationalmarket where communication becomes difficult, we have shown you inthis diagram, first is

A.difference in the social culturesB.difference in national differences of the business systemsC.Differences in consumer behavior and the protectionist countries

which happen in the most global markets.

The challenges -before the management to overcome these forces ofglobalization are:

At entry level:-Managing people at multinational level with the workforce diversity in terms of cultural and language is becoming a veryserious issue, locating the activities available in particular market at local

areas which has to be studied and researched upon, the globalization,standardization and customization has to be done in such a way that itsynchronizes with the local need.Now the global standardization strategies which dictate the market, theyare

1.global standard strategies2.Customization strategies.

Standardized strategies -it is like treating the world market as one big

market. The way of process and system become standardized but thelocalization strategies would design the product according to the climaticconditions and according to the taste, needs and the religious perceptionof the people into the host market. So once you have to enter intostandardize procedure in terms of manufacturing, in term of quality,standards are important, international global strategies dictate thosestandards but in terms of selling things, you have to be very local interms of understanding the micro aspects of the consumers.

The e-commerce -is dictating the world market in a bigger way, how thecartels are connected or how the world markets are connected is throughthe e-commerce. You have three strategies

1) B2B (Business to Business)-Businesses are connected to suppliers,stakeholders and to the other people in the value chains.


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2) B2C (Business to Customer)-Retail shops and online shopping.3) C2C (Consumer to Consumer)-Online kind of auctions which takeplace or you want to sell a house, the customer can post tender on thecomputer, on website and another client can meet him on the internet,so this is C2C.

Global Capitalism- is a kind of free economy which is not just instantlyhappening, its becoming a big issue or big practices just because oftechnology, failures of socialism and the East Asia success. Now why EastAsia success is important because here most of the cheap labor isresident, this

1. labor has been educated2. labor has been connected3.Labor has been used by world economy which is dominating the cost

ethics of been business.

So the total scenario of the business changes in terms of internationalethics because now the outsourcing, the off shoring of business becomeseasy. The International business has millions of customers joined togetherto the CRM processes, cheap labor markets. The markets are flooded withgoods from various countries and various brands.The organizations have become more knowledge based i.e. its not onlythe physical assets are becoming important, knowledge in terms of know-

how is also becoming important i.e. the soft aspects of technology i.e. interms of loyalty, attitude, commitment is also becoming asset which mostof the organizations do value.

The shape of the organization today is like they are

well organized organizations self-disciplined organization full communication is existing they think globally and act locally

they have lot of employees who are empowered

So this is the biggest change happening into the organization which iscrossing the boundaries of the national ethics and working ininternational markets connected by computers.


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The organizations are overcoming these types of barriers by being more1. flattened in terms of hierarchy2.decentralized3. flexible in terms of the strategy4.more empowered

Empowered means that the employees are being more knowledge basedand they have more technical knowhow because they are into kind ofcollaborative systems where they have put the values, the ethics, theknowledge, the services, the products together into a bettercombination.

The global opportunity- which are connected with the world today areA.better work force diversityB.competitions in global marketsC.better managementD.better global delivery systemsE.Better connectivity through the transaction cost.

The emergence of digital firm has shaped the world markets in a betterway. The digital firm is firm which has got digitally enabled employeesand products sold online. The core business practices are synchronizedwith the world markets, you have the sensing techniques which areconnected through computers, and you have seamless flow of information

to the internet and the intranets.The Information is shared on the portal basis, so this is the role ofinformation which governs different ethics in different markets. Theglobal opportunities will make you in better positions and will also giveyou high operational excellence. They design new products and newservices in the knowledge based economy. The customer and thesuppliers are connected in better way, the improved decision makingpractices are the new ethics of the market. The competitive advantagesand the survival have become easy for the firms because you have rightcombination of thing set at right place. The effectiveness, efficiency and

the best practices are the result of the synchronization and thecollaboration. The strategic objective of the total business systems is tohave a competition, where the products are emerging with shorter andbetter life cycle products, you have to react to the turbulent market andcome up with new design, strategies and new design products, and youhave to expand the employee base.


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Global business challengesGlobal business challenges are beautifully displayed in this diagram, seethese modules in this you have the

A.Global IT business strategiesB.Global business architectureC.Global information issuesD.Global systems

These are the total management areas which are governing the worldmarkets. The IT strategy would be connectivity through the internet andintranet. The enterprise architecture is the emergence of virtualorganizations which are only available on the physical spaces of thecomputers.The global information system is again the connectivity through the

various internets and the global system development is like you had acollaborative process which synchronizes various markets.Now the business practices which are governing the world market,depends on the nature of the industry, it also depends on the competitivefactors and when the environmental factors available in the particulareconomy, if these factors are favorable then only this system can emergebut then there are many business where these practices are notprevailing and the customers are depending on the local services and thelocal products. So the basic drivers for governing the businesses could be

better because you have a market synchronized by the drivers.Drivers-Let see in this particular diagram.


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the global customers wanting better products and better servicesbecause they are more

knowledgeable aware educated, these are the urban markets, The global products- global products design and shape by

international practices, better quality and better kind oftechnology.

Global operations and resources is every country has a resource which isnot available in other countries, so you have geocentrically, geographicalconditions dictating the resources; the cost is differentiated because ofthe availability of a particular resource at a particular country.This results into global collaboration- Global collaborationist partnershipwere the connectivity in terms of resources is done so you have a betteredge to do business, now the governance and the compliance isimportant, governance is a method or a system of governmentmanagement to control the business practices, compliance is the act ofconfirming or it is the act of accountability, when you are in internetworld, your accountability is important because if customers pay moneyand you are not able to comply the company will definitely loose animage or brand.

Integrating the global system -is a big way and its a big dimensionimpacting the world markets, the global systems are important for yoursurvival, they are revolution for the organization.

The impact of these systems on the strategies is, here is the beautifuldiagram where each dimension is projected into

strategy integration of business is through technology business strategy which is the result of market evolution financial resources because of better financial forecast availableinto the market and better financial institutions prevailing into the

market


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Infrastructure governed by the technological evolution, better is thetechnological advancement, better is the bandwidth, and better is theinfrastructure connected.

Human resources emerged or better transfer of human resources takesplace because there is a knowledge transfer, the technically advancedpeople with many skills in terms of knowledge, technical abilities and interm of character are getting connected.

Information systems because opportunities are available into themarkets, you have processes but they are standardized, standardized ismost of the business practices are done in such a way that they impactfor the betterment of the total system.

Organizations which are designed according to the culture and climate ofthe particular situation, then you have projects which are completed on

priority basis, so this is the total system of the global markets where youhave integration of strategies and systems to emerge into practice whichdictates the global market in a better way.The international business is becoming easier but still, it is more complexbecause you are dealing with lot of diverse skills, diverse languages anddiverse customers, the stakeholders are too diverse in many markets


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The 21stcentury organization trends are impacting the business in such away that

innovation is becoming important learning is becoming important

knowledge transfer is becoming important Technology is becoming indispensable.

Lets see this diagram in which the innovation passes the various phasesto dictate the market practices

when you find a competitive edge into the market, assemble theinnovation practices.

reward the risk takers celebrate the diversity of the workforce available look around to the world also and mix practioner and developers

together to design better products and better services,

This is how we work into the world market because innovationdictates the world ethics in terms of new products, new services,and new technology.

Sharing the customers from all over the world and millions gettingconnected on over computers but in this all aspects of governance andconnectivity is designed by


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social responsibility corporate policy Corporate social responsibility. The ethics are important sustainability are important The total eco system of green revolution or of building the

environment with better quality of awareness is also important.

The business practices are designed in such a way that social issuesrelated to women empowerment, child workforce is important thatis we dont have to use children in our business practices and givethem a better life.

These are world ethics, values, integrated into systems to design amarket which is virtually connected by people in terms of

computers.

5.THE VIRTUALISATION IN THE GLOBAL WORLDVirtualization is a new trend impacting the world markets. Virtualizationis a frame work of dividing the resources of computer into multipleexecution of environment, virtualization software allows multipleprograms on a single machine and move programs from one computer toanother computer, so this virtualization is most of the operations aretaking online, the organizations are virtually getting connected because

of the social networking.Lets see in this pyramid where social networking has given advantages tothe organizations, you have


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A.passive searchB.boomerangsC.Marketing networks.

Now passive search is a search through computers of the employee andthe people who have the best capabilities connected together, see likeGoogle search is designing a Wikipedia where knowledge is required, soall the experts from all over the world who have knowledge can getconnected, write and send they are paid electronically. So this is how

passive search starts with people to look into the knowledge areas whichare more specialized expertise areas and research based but the world isconnected anywhere you are sitting you can connected.Boomerangs is an efforts or a strategy designed by the company in such away that the websites try to search for the employee who have work forthe company previously and want to return back, if they come back tothe company, it will be at a lesser cost because the hiring cost is less andthey are generally updated with all techniques of the markets.


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Networking is kind of connectivity where you are advertising productsthrough social networking, the word of mouth publicity becomes veryimportant for people to sell the products through networks

The virtual trade is important because lets see in this diagram, youhave

the virtual organization in terms of the virtual market two primary types of virtual trends which governed the market are

the

Virtual worlds Virtual workforce.

We have shown you in this diagram, we have virtual organization put intothis cup which has virtual workforce dictating and taking the connectivityfrom the worlds markets. Now the virtual workforce is a workforce who isworking anywhere in the world at any situation whether it is rural orurban but any kind of technical aspects gets connected through thecomputers. This has impacted the businesses because it is more realisticin term because it is convenient and it has reduced the mobility of the

people. It has catered to their personal life styles, it had designed thebusinesses with virtual communications to better strategies, it haspersonalized products, personalized work tailored schedules and havedesign products to customized each customer needs. You have multipleservice options and you have minimum maintenance. So this is the kind of


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trends which are coming into the work markets designing the life styleand the working styles of the people.

Globalization kids are also dominant by the virtual nation, where thenations get interconnected through their policies and procedure also,each nation when come into bilateral agreement has to design a policy insuch a way that it suits the policy structure of other nation, then onemore country get connected it becomes multilateral. So you have virtualnations connected by the virtual effect of the computers.

The corporate life is becoming more flexible because the people workinginto the companies are big assets. Any company which is valuable isvaluable because their employees are important in terms of knowledgeand technical know-how. Companies not only have physical assets, which

added to the accountability of the company in their books value but thecompanies total assets value is also estimated by the knowledge of theemployees.

knowledgeable employees are important because we have to dealwith the technology transfer

global supply chains where you getting connected to thestakeholders also

joint venture in terms of connectivity is becoming important free trade agreements which need to studied by legal practitioner Mergers and buyouts or takeovers where knowledgeable people

work in a better option.

Lets see this new world where the markets are connected, you haveA.home countryB.guest country


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Lets see this diagram how they are connected.

Cultural frame of the home country, the foreign country

sender and the receiver these are connected by the ethnocentrism culture, false attributes,

stereotype, etiquettes in terms of non-verbal behavior, time andplace also impacts, the status and the power styles of the people

impacts and the language impact the business practices.

When you are working online or offline both these practices involve hostmarket becomes important and a new the need for effective HRsupportive is required because you have to train people in all theseaspects, whether it is body language or it is the style or language in termsof oral communication.


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Lets see in this diagram where you have1.on Y axis - the operational maturity2.on X axis - the organizational maturity

The strategy develops into the skills for

Marketing products services organizational design into resource management It enhances the shareholders value.

So this diagram explain you how from each steps from strategy, how youget enhance shareholders value in terms of last output, so an importantglobal strategic driver which helps to design a markets in a better way.The global market trends in terms of reality what is happening to theworld markets

organization in terms of connectivity are increasing the speed of change is impacting in a better way cost of transaction is reducing technology is impacting the interconnected markets are increasing the customer based demand is tailor made the new market creation in this diagram is shown because all the

companies need to create and design products for differentmarkets, you have

the customer based today


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the unexploited opportunity the unexploited markets It is important to create new markets

The leadership challenges -i.e. it changing into new economy, in the oldeconomy it has incremental change where the leader has to deal withlittle changes.

The new economy the constant and the radical changes happening in sucha way that leaders definitely have more pressure to deal with thischanges.

The business concept of innovation design in such a way that thebusiness models in terms of innovative practices have to be built in abetter way, the adoption to the global business is a vast topic whichrequires immense skills on part of employees and on part of customer toget connected into a world which is designed and dictated by the globalforces of liberalization and free trade. This free trade is boon to theIndian customers and to the foreign customers because you are getting

better products Better services at cost which is much lower than the decades

backs.


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The only cost which is impacting the economy is the energy costotherwise most of the products have had a cost which is affordable bymost of the customer not only in urban areas but into the rural markets.This is a magical world of global connectivity where the adoption of thebusiness practices has paid life better for people.I hope the students must have understood the impact of the globalstrategies in terms of connectivity and how you can connect or adapt tothe global business practices, thank you students.

e-con 183 transcript

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