“Globalisation is the process by which the world is becoming increasingly interconnected as a resultof massively increased trade and cultural exchange.” – BBC in GSCE Bitesize
Globalisation has stemmed all the way from the first Industrial Revolution back in 1700s, with the introduction of steam engines. Although globalisation has been around for centuries, it has sped up over the last few decades. Generally speaking, globalisation has contributed in the increase in international trade, the ability for a company to diversify its business to other countries, facilitated and ease the movements of capital, goods, information and services, and many more.
While globalisation has brought about immense benefit in the business landscape, it is not without its downside. This article will look closely into the impacts of globalisation, and how it has affected the outlook of the business landscape.
A consequence of technological revolution, Artificial Intelligence (AIs) are introduced to increase productivity in organisation, to take on dangerous roles in workplace to reduce casualty rate, reduce human errors in the course of production. Simply put, AIs are made to work and react like human in the form of – speech recognition, learning, planning and problem solving. No doubt, AIs will change the way we produce, manufacture and deliver, and eventually, possess the ability to be highly adaptable rather than being spoon fed (or programmed) with instructions.
In recent years, there are several controversies revolving around the rise of Artificial Intelligence (AI). Economists around the world are concerned that this technology will eventually lead to the widespread in unemployment as AIs are seen with the ability to undertake roles that are traditionally held by humans.
“Purposeful AI is about leveraging technology to amplify people. We can automate the repetitive mechanisable tasks… and in doing these things we can free people to put all of our creativity, passion and imagination into thinking about the bigger opportunities ahead of us.” – Vishal Sikka, CEO, Infosys for Forbes
Judging from how manpower can easily be replaced by AIs, countries worldwide are inevitably faced with the prospect of billions of people squeezed out of the workforce.
Globalisation has accelerated the mobility of human capitals due to low transportation cost and spread of new information technologies. In countries that are lacking in human resources, talented and well-educated/talented people are highly sought after, such as information technology experts from India and China, medical professionals from African countries and Philippines. In order to benefit from the low cost operation, companies are locating more of their core operations to developing countries.
“As offshoring steadily makes its way up the value chain, it is not only encompassing higher end white-collar work; it is fundamentally redefining the organisational structures and management practices of major corporations around the globe.” – in The Globalization of White-Collar Work
However, despite its benefits, it is not without drawbacks. Problems such as inexperienced managers, unmotivated employees and trouble with the local officials are some of the negative consequences faced by companies who offshore their operation. Hence companies have to put in more efforts in selecting the desired vendor, and also to work out strategies to ensure that personnel working offshore and onshore are working towards a common goal to avoid discrepancies in expectations due to differences.
By shifting certain operations offshore also means that companies can afford cut down on manpower onshore. However, by doing so, it can cause a drastic drop in morale in the employees, leading to a decrease in productivity and employee disaffection. New HR strategies ought to be thought out and well implemented to meet the challenges of changing business demographics.
Good business ideas stolen by ‘Copycats’
“Nothing breeds copycats like a successful business venture. When a new business idea is incubated and executed successfully, cloners naturally emerge and imitate.” – Ndubuisi Ekekwe in Harvard Business Review
Information exchange is one of the benefit brought about by globalisation. News of successful business ideas and ventures can easily accessed via internet, and this is bound to give rise to cloners who hope to have a share of the pie. Market liberalisation has created low barriers of entry to new business, and this inevitably facilitated the ‘copycat’ trend.
The only way to counter this trend is for companies to heavily invest in innovation and R&D, to maintain their competitive edge and to stay afloat in the market. Understanding what is relevant for your business to stay relevant in the market in important for companies to ward off such risks as well. Companies also need to be flexible in their business strategies and well receptive of changes to deal with challenges ahead.
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