Globalization

Myths about Globalization

Global connotes a holistic, integrative strategy. There are some myths about globalization that need to be avoided:

• Globalization is simply a presence in other countries, without any connection between the activities across countries.
• Global strategy means doing things the same way everywhere.
• Globalizing means becoming a stateless organization with no national or community ties.
• Globalization requires abandoning country values.
• There is no need for integration when acquiring or merging with foreign companies.
• A global strategy must involve sales or operations in another country.

In fact, globalization is not about the preceding list. Rather, it is about global integration, and not about internalization.

Global Organizations

Multinational companies are the dominant players in the global business environment. Some researchers consider MNCs to be the most important institutions of modern societies, because they are more than just businesses. These companies shoulder a huge responsibility for generating wealth by continuously improving their productivity and competitiveness; and their responsibility for defining, creating, and distributing values makes these corporations one of society's principal agents of social change. Members of these organizations, although coming from different cultural backgrounds, have to share common goals and meanings and coordinate their activities to gain a competitive advantage for their company in the global market. The shared meaning and understanding of what it means to be a member of a global corporation, which crosses cultural borders, reflects the global corporate culture.

A Global Corporate Culture

Although each MNC may have its own unique organizational culture, global corporations share some common characteristics that reflect their being part of the global business environment. Global corporate values facilitate the adaptation of individuals and organizations to the global work environment.

Competition is a key characteristic of the global market. To gain a competitive advantage in the global market, companies must be performance oriented, emphasizing time to market, cost effectiveness, and customer satisfaction, while also being more [Page 277]innovative. Furthermore, the global business context is characterized by rapid changes and high uncertainty. Therefore, companies must be flexible and open to accept changes. Global corporations need to coordinate and mobilize resources within and across geographical borders. Therefore, high interdependence is an important characteristic of global corporations. The high diversity of the global workforce increases awareness of cultural variations, and acceptance of cultural diversity has become crucial for effective cooperation across cultural borders. A major proportion of the work in the global environment takes place in global multicultural teams, where cultivating trust is critical for team accomplishments. In sum, the global corporate values emphasize competitive performance orientation; flexibility, adaptation to changes, and innovation; high coordination and interdependence; acceptance of diversity; and trust and transparency. The level of agreement on these values among corporate members from different countries is an indication for their being global rather than local values.

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