Globalization and Regional Strategies Essay Example for Free

Globalization and Regional Strategies Essay Executive Summary It is clear enough that in today’s era it is extremely critical for firms to adopt global and regional business strategies in order to attain sustainable competitive advantage. But the question arises regarding classification of a MNE (Multinational Enterprise) as a global firm. This essay critically analyses the work on regional strategy as a response to Osegowitsch and Sammartino and attempts to cover the following aspects in detail. Notion of Globalization and Global Strategy This section highlights the notion of globalization and way organizations today establish a global presence by adoption of unique business strategies. This part also details the three different kind of global strategies. Regional Strategy Analysis This part analyzes the theory and practice of regional strategy concept of Globalization in particular as a response to Osegowitsch and Sammartino (2008). It aims to justify that in today’s era very few global firms exists and secondly that sufficient amount of international business literature and theory is required to draw reflection on regional vs. global MNE’s (Multinational Enterprises) strategy. The Theory of the Regional Strategy This section explains the concept of regional strategy analysis and illustrates the various regional theories as explained by Osegowitsch and Sammartino. Introduction With the concept of globalization and internationalization gaining more and more momentum everyday, this essay attempts to critically analyse the work of Osegowitsch and Sammartino on regional strategy. It starts with explaining the concept of globalisation and global strategy and tries to justify that in today’s era very few global firms exist. Secondly, it tries to establish that significant amount of international business literature and theory is demanded in order to draw conclusion on regional vs. global MNEs strategy by exploring the theory of regional strategy. Notion of Globalization and Global Strategy Globalization can be defined as a complex concept which enables firms to operate in various continents and countries across the globe in order to improve and maximise their profit margins, sustainability, worldwide existence and economies of scale (Blyton et al., 2001). Globalization provides platform not only to consumers but also to organizations to help them satisfy their needs globally. According to Marquardt Berger (2003), Trade, Travel, Technology and Television are the four major developments that have resulted in Globalization. The four T’s of global development are the outcome of human brain and its creative innovations. These advancements have further encouraged and made possible continuous exchange of ideas, information and knowledge between human resources by breaking the barriers of distance. Moving ahead, Bratton Gold (2007) state that Globalization is a global process of political convergence, social economies and national sentiments, in which space, time and Government are not given much importance. The paragraph below will now highlight the three different views on â€Å"global strategy†. The First view states that the global strategy is one of the particular and specific forms of Multinational Enterprise (MNE) Strategy. Further, it highlights the fact that Globalization considers all the countries of the world alike (Levitt, 1983). The Second view considers global strategy as â€Å"International Strategic Management† (Bruton et al., 2004) which is no doubt wider concept than â€Å"global strategy† mentioned in the first view. Lastly, the third view describes global strategy in even broader term; The strategy of the firms that exist all over the globe and this can be concluded as the firm’s theory of how to become a successful competitor (Peng, 2006). Having discussed the various forms of global strategies which are adopted by firms today, this essay now moves ahead to analyse the theory and practice of regional strategy concept of Globalization in particular as a response to Osegowitsch and Sammartino (2008). It aims to justify that in today’s era very few global firms exists and secondly that sufficient amount of international business literature and theory is required to draw reflection on regional vs global MNE’s (Multinational Enterprises) strategy. The Regional Strategy Theories According to Rugman and Verbeke (2007), recent literature on globalization suggests that a firm is categorised as global if maximum 50% of its total sales are in its home territory (EU) and minimum 20% of sales in each of the NAFTA zone and Asia. He adds to it by bringing to surface the outcome of survey based upon this theory that indicated only nine global firms in Fortune Global 500 and also the orientation of numerous firms towards the home-region. In response to the above mechanism for classifying the firm as global, Osegowitsch and Sammartino (OS) (2008) have provided three basic criteria and comments that can be helpful in future classification of firms according to their geographic sales dispersion. Firstly, OS suggest that it is not appropriate to classify statistical data straightaway. It should be realised that since this is a growing area of research, usage of any kind of classification tool is open to criticisms as it is not simply the categorization of Multinational Enterprises (MNEs) following particular regional strategy theories. As an example, OS focus on building and having strong position in the region by illustrating that if the EU, NAFTA region and Asia represents 90% of the total world sales output, an absolute division would require all the three regional triads to have 30% sales each and not 33.3% in order to encourage the strategy of lower thresholds. In other words, a firm can be defined as global if it has at least 20% of the total sales in the two host-triad regions and without any kind of imposition on the maximum sales threshold in the home territory (Rugman and Verbeke, 2007). Additionally, it should also be noted that it is not at all relevant to categorize a firm as having strong position in the market if its threshold is lower than 20% of t he total sales. OS even conducted a simulation using threshold value as 10% of the net sales in order to identify a string position in the host region as it would result to USD $1 billion even for the smallest of the Fortune Global 500 firms. But unfortunately, it didn’t present a strong position and can by no means be considered as an essence for strategic decision making in the worlds largest organizations. OS clearly argues that using various thresholds is helpful in assessing the sensitivity of firm’s positions in the classification system but the main function should always be to provide an assessment of the Future Global 500 and to easily track firms whose thresholds are continuously changing from one category of threshold to another. A clear example of this is Nokia which encountered a 4% decline in sales in the year 2002. However, this change in sales pattern reflected a short term failure in inter-regional growth but OS criticizes that it cannot be simply neglected. Movement of Nokia from a global organization in 2001 towards a home based firm in 2001 was a remarkable concern. In one line, it can be stated that having threshold below 20% simply leads to generation of more bi-regional firms and which can’t be regarded as truly global organizations. Moving ahead, the second regional strategy criterion which OS highlights is that the sales variations are highly industry specific. According to OS, industry plays a significant role and all future researched should aim at exploring the regional vs global strategies at the industry specific levels and try to establish the difference. It is truism that a majority of firms are not properly internationalized and their sizes varies across regions but then its some of the world’s biggest MNEs that have constantly been regarded as capable of compens ating for the weaknesses of the other sectors in different regions of the world. The main point to be considered is that our analysis are independent of differential size of numerous industries that exist across the region, as MNEs are able to establish regional markets and to further develop insufficient markets. Lastly, in third comment it is argued that it would be irrelevant to prefer regional strategy over global strategy. Regional strategies come into existence when it becomes very difficult or impossible to adopt conventional global strategies efficiently, or when they fail to function, keeping in mind that global strategies cannot be evaluated in isolation. Further, it can be said that heterogeneous geographic space beyond the home country border is essential for most of the companies now if not all of them. Moving ahead, this section of the essay will now make an attempt to tackle the criticism formed by OS concerning the contribution of regional strategy to the international business theory. According to (Rugman and Verbeke, 2007), the regional strategy is structured around three simple but fundamental empirical observations which demand international business theory to be extended and enhanced. First of all, only a small number of MNEs have a balanced geographical sales distribution pattern across the global market, although it counts towards the risk diversification at the downstream end of the value chain. OS illustrate that a balanced and structured distribution of sales geographically would contribute towards enhanced global acceptance by the customers of the company’s products and services. With only the exception of resource-based industries, the triad comprising the EU, NAFTA region and Asia demonstrates a first cut though not certainly a fixed one mechanism to identify the extent to which an MNEs net sales are distributed worldwide. Further, this triad has gained so much importance as it is the home of world’s most large MNEs as well as the locus for a number of outstanding innovations in most industrial sectors. The triad also demonstrates the world demand pattern for most knowledge intensive services and goods. But it’s unfortunate to mention that only a small number of MNEs in the Fortune Global 500 are capable of performing equally well in each of the three regions of the triad. It is often observed that a strong position in the home-triad region is not supported with an equally strong position in both the other two remaining triad environments. Classification tools are now irrelevant as among the firms with international operations only a small percentage are truly global i.e. may be even less than 5% (Ghemawat and Ghadar, 2006). They further add to it and state that different firms rule in different parts of the world. Second wing of the regional strategy focuses on the fact that several MNEs have regional features in the organizational structure such as geographic divisions and having individual divisions for different regions is supported mainly by the concept of regional heterogeneity demanding idiosyncratic management. In this case, the intra-regional institutional and economic distance is not just smaller but also very different from that of the interregional. It has been observed that for most MNEs, managing operations and work system in EU is very different from functioning system of the NAFTA region or as compared with the work cultural of Asian environment. These differences may further be enhanced if the work unit is further subdivided into smaller units. Fratiannin (2006) states that these differences in work system signal the importance of regional level in the business strategy and structure of MNEs. Today, almost all big firms such as Toyota, General Electric (GE) have embedded regional elements in their business and operational strategies and these companies are often wrongly referred to as global organizations not just because of lack of balanced geographic distribution but also because of their world wide global operations and manufacturing (Ghemawat, 2005). Thirdly, it should be noted that more than fifty percent of the geographic area in terms of sales is normally the main source of the firm’s cash flows and the centre point of most of the firms both tangible and intangible assets. In the coming years, the concept of having more than 50% sales in the home territory would not be significant enough in EU and North America specifically but it would gain momentum in Asian region as intra-regional distance is minimizing and thereby driven by a reduction of investment barriers and trade. Competition among industries would be more prevalent at the regional level instead of the national level. OC highlight that attention should now be laid on the development of classification tool that will help bundle the home country sales with the sales in the remainder of the home territory rather than paying attention separately to the sales in the home region and remaining of the home region especially for MNEs based in Asia and EU. Moving ahead, the above discussed observations and theories clearly demonstrate the need for an extended international business theory. These observations are independent of specific categorization approaches to measure specific home-region vs. rest-of-the-world market position of MNEs. A trend has always been seen that all the MNEs are much stronger in their home regions as compared to that in other triad regions. These top MNE firms have formulated their organizational structures around the regional component and a varying market position in each region raises call for a regional approach rather than a global strategy approach. The paragraph below now will bring to surface the three main components for the extension on mainstream international business theory (Rugman and Verbeke, 2007). Firstly, it is noticed that impact of country border does not provide strong basis for distinguishing between non- location bound (or internationally deployable/exploitable) and location bound. In today’s period of excess regionalization, it is very easy for some companies to exploit and deploy their strengths throughout the home country border. Further, proxies for internationally transferable FSA’s such as firms level predictors of internationalization like firm’s level of RD do not hold much importance in explaining intra-regional expansion occurring in home region, given the distance gap between the home country and rest of the home region is very less. As a result of well-functioning trans-European transport and logistics networks enabling fast response and just in time strategies covering the whole continent, the significance of geographic distance has decreased in EU. The EU integration process itself has let to decrease in Institutional distance. Further, Economic distance has lost its relevance because of many reasons such as development of new services and products at par with European level, possibility of cross border shopping made possible by web based searches, continuous attempts made by many companies to gain scale and scope efficiencies at the European level and lastly, increased importance of EU as a geographic space to ascertain company’s conduct, structure and importance. Finally, decreased significance of conventional measures of cultural distance mainly in the business to business area as it is easy to get labour in Europe, considerable increase in use of English as the lingua franca inside the region. On sharp contrast between past and present position of conventional location bound FSAs it can be clearly stated that previously they allowed firm expansion only up to country borders but now it can be easily upgraded, and made deployable and exploitable even beyond the home country borders and also in othe r home region countries. Secondly, there is a need to reconsider the fact that non-location-bound FSAs like technological knowledge or brand can be easily exploited and deployed nationwide. Today also it is necessary to complement existing FSA bundles with an additional FSA bundle in high distance environments which implies distance still plays an important role. According to Ghemawat (2005), there are several ways to differentiate between low and high distance environments, one major distinction being that between home regions and host regions in a triad context. Moreover, it is clear that extension and scope of mainstream international theory is free from any scholars disagreeing with the concept of the triad region as the best proxy to discriminate between low-distance environments (in this case the home-triad region) and high-distance environment (in this case the two host-triad regions). High distance implies to making more substantial investments in order to complement its present FSA bundles, also ena bling maximum and profitable exploitation in the host region environment. Here, the apparent trade off becomes obvious: further the efforts to expand the high-distance environment may not be proved to be as successful and profitable as the expansion of low distance environment, even if it is suggested by macro-level parameters which measure the attractiveness of the high-distance environment that they have strong location advantages. As stated by Nachum and Wymbs (2007) in regard to global cities that FSAs and location advantages are dependent on each other. High distance bundles also has many risk factors along with it like melding the extant FSA bundles with newly developed or accessed resources in the high distance environment may lead to burdened with several operational problems, decreased or disappointing sales, as exemplified by the retreat of some of the world’s largest MNEs from high-distance contexts, for example, Wal-Mart’s exit from Germany and Korea. . Thirdly, the theoretical difference between the two FSAs namely location bound and non-location bound FSAs assume conventionally easy developments and profitable exploitation of FSAs (like brand names or technological knowledge of proprietary) across borders. Moreover, it is very essential to acclimatize the brief contents of these two concepts to the authenticity of regionalization. More particularly, the factors that determine the extent of FSAs are, its distance accompanied by its geographic, institutional, economic and cultural components. The level at which a FSA should be called location-bound vs non-location bound is estimated by decay in value across a space. On the basis of terms like region bound nature of FSAs and the liability of inter regional foreignness it has been highlighted that for international business other geographic borders hold more importance than conventional country borders in our previous study. After studying the concepts and theories of regional strategy, we now try to establish the extent to which Procter Gamble could be categorized as a global firm in terms of its business and operational strategies. The Case of Procter Gamble Procter Gamble Co. – One of the worlds leading consumer goods manufacturer such as Tide, Pantene, Ariel etc was established in 1837 from an original candle and soap company. The firm now operates in 180 nations with more than 138,000 employees. According to Lafley, A. G., Chairman of the Board and chief Executive Officer, PG, the firm has over 171 years of history and has always been driven by creativity and innovation. Additionally, improved sales and long term success have always been the strategic goals of this corporation. And it understands the fact that these goals can be attained by constantly appreciating changing consumer’s needs, innovation, branding and market needs. Depending entirely on skunk work such as acquisitions, internal RD and selective innovations has proved to be inefficient and insufficient for attaining the business target of $4 billion business in a time period of one year. It can be clearly seen that invent- it-ourselves model along with global research facilities and recruiting and holding of the best talent nationwide attained success till the year 2000 but nowadays satisfying high levels of top line growth has become a big challenge for an organization The approach through which the radical strategy of open innovation helped an organization attain its business mission and goal can be typified in the following lines. To face the challenge, PG adopted a brand new technique of innovation: Develop and Connect model in the year 2000 which lays great importance on searching good and new ideas and information outside and bringing them in, in order to give internal capabilities a boost and make most out of them. With the perspective of manufacturing improved and relatively cheaper products faster the business strategy involved in this model was to leverage assets of people, products and property available externally and applying it to their respective RD labs, purchasing, market capabilities and production. The foremost work of this strategy is to recognize top ten preferences and needs of the consumer. Moreover, it is very essential that the customers are fully satisfied by the products manufactured and which will finally result in increased sales and profit. Moving ahead, alike products or related technologies which already exist in the market and occupy good position are recognized. Lastly, analysing the influence of technological acquisition of one area over the other areas. Networking is the backbone of this approach. Along with having business collaborations with open networking companies such as InnoCentive and Ninesigma, the PG group has long chain of suppliers and technological entrepreneurs worldwide. They play a crucial role by finding solutions to PG internal problems in the outside world. Thus, by constructing such type of infrastructure PG has been able to reduce its investment in technology along with achieving stable top line growth and required sustainability. According to Huston and Sakkab (2000), by shifting to Connect and Develop model there has been a remarkable increment in our RD production by 60% and the progress rate of innovation has undoubtedly doubled. The Procter Gamble figures out how an organization can maximize its profitability levels by switching to new and innovative The Procter Gamble examples mirrors the way how switching to new and innovative approaches of using information and technology can help maximise profit margins. It is one of the organisations which has developed enabling infrastructure fabricated around innovation with a huge worldwide network combining human capital, ideas and technology. Conclusion This essay has brought to surface a number of strategies which can help firms to establish strong positions globally like having a threshold of 20% etc. The main aim which was to justify that a firm cannot be simply categorized as global based upon statistical data has been justified. A number of measures have also been illustrated which can help differentiate the firms regional strategy from the global strategy. References Blyton, P., Lucio, M., McGurk, J. and Turnbull, P. (2001) â€Å"Globalization and trade union strategy: industrial restructuring and human resource management in the international civil aviation industry†, International Journal of Human Resource Management, pp. 445-463. Bratton, J. and Gold, J. (2007) Human Resource Management: Theory and Practice (4th edn), New York: Palgrave Macmillan. Bruton, G., Lohrke, F. and Lu, J. W. (2004) The evolving definition of what comprises international strategic management, Journal of International Management, Vol. 10, pp. 413-429. Fratianni, M. (Ed.) (2006) Regional economic integration, Research in Global Strategic Management, Vol. 12, Oxford: Elsevier. Ghemawat, P. (2005) Regional strategies for global leadership, Harvard Business Review, Vol. 83, No. 12, pp.98-108. Levitt, T. (1983) The globalization of markets, Harvard Business Review, Vol. 61, pp. 92-102. Marquardt, M. and Berger, N. (2003) The Future: Globalization and New Roles for HRD, Advances in Developing Human Resources, pp. 283-295. Nachum, L. and Wymbs, C. (2007) The location and performance of foreign affiliates in global cities. In A. M. Rugman (Ed.), Regional aspects of multinationality and performance, Research in Global Strategic Management, Vol. 13, pp. 221-257, Oxford: Elsevier. Osegowitsch, T and Sammartino, A. (2008) Reassessing (home-regionalisation), Journal of International Business Studies, Vol. 39, No. 2. Peng, M. W. (2006) Global Strategy, Cincinnati: South-Western Thomson. Rugman, A. M. and Verbeke, A. (2007) The theory and practice of regional strategy: A response to Osegowitsch and Sammartino, Kelly School of Business, Vol. 2, pp. 1-7.

Reflection Paper on Living in the Land of Promise Article

Have you ever wondered what true happiness is? Or what is living in a Promised Land like? Or just wondering how can a priest live a happy life if they are to give up on a lot of things? Or have you ever wondered of your purpose on life? On why we are all here on Earth? I believe, each and every one of us, is living in this world with a purpose. It may be a great or a simple one but we are all called by God to fulfill certain tasks. And as we fulfill whatever that task is, we should always be ready to face all sorts of challenges along the way. Just like in the old days before Jesus walks on the surface of the Earth. There were a lot of people called by God to fulfill some mission, because He was preparing a promise for all humanity. Some mission He believes to be so important to accomplish to achieve a life of Eternity with Him. And these people who fulfilled all the tasks were all written in the history to have contributed a great deal in the realization of God’s greatest plan. A plan so important that we have now a chance to experience and that is to be able to live in the Promised Land. A land filled with happiness. I could just imagine all the obstacles or painful experiences the people of the past like Abraham, Jacob and Moses had to undergo in order to pave the way for us to enjoy the so called Promise Land. Sacrifices that ordinary people may deem impossible to surpassed. Just take for instance, the great test given to Abraham when he was asked by God to sacrifice the life of his beloved son Isaac, it was a huge test he was able to pass because of his obedience to the Lord. And since these people were given some tasks by our Lord that they greatly tried to accomplish, we can now be assured that as long as we follow ... ...ication or connection with the Lord is another key to live a happy life. A life guided by the Holy Spirit, is always a life of happiness. Surely, problems here in there will come your way yet once you are constantly in-touched with the Lord, you will be assured of the best possible way to handle problems. Happiness is an elusive dream for some, that is because a life without God is never fulfilled, and a life-filled with superficial happiness is not considered happy also. This is because this type of happiness, I think is fleeting. Things may not happen the way you like it, but the greater plan of God will always prevail. And this we should always keep in mind, we should always be an example to others by the way we live. Just like the famous saying, as we live our lives, we should always be a blessing to others, and that alone is a big purpose in life to live by.

How I Would Change The Immigration Healthcare Reform Essay

The debate over a comprehensive healthcare package has continued to rage on even after Obama signed the healthcare reform bill on May 4, 2010. Decades of rift and bad blood had finally culminated in the legislation of the healthcare reform. The stage is now set for the implementation of the long awaited savior of the masses. However, the healthcare reform package is not to be entirely loved, in as much as there is conflict in the aspect of immigration and healthcare provision, and the issue of immigrants and denied access to health insurance cannot be over sighted- at least for the illegal ones. That illegal immigrants would not be included in the federal health insurance scheme is a time bomb waiting to explode, as even documented immigrants were shorn of access to Medicaid in their first five years of residence, in the past. One can argue that it would not be right for tax payers to subsidize healthcare benefits for illegal immigrants who probably contribute less to the national income, but what about those who are earning well and have a secure source of livelihood. Whether â€Å"well to do† illegal immigrants would be allowed to purchase their insurance on the health insurance exchange is another matter to consider. As the keyword of this tenure has been change, there should be no frets when I put myself in the shoes of the president on how I would change the immigration healthcare reform. The fact is that, depriving illegal immigrants’ access to healthcare insurance would only increase numbers in emergency rooms, invariably service provision and pressure on resources. In view of this, I would allow illegal immigrants to access full government healthcare benefits, and if that is so difficult, I would permit those that have the financial capacity to purchase their healthcare insurance outright. After all, good healthcare should be available to everyone.

History Of The World. Arguement Throughout All Of Human

History of the World Arguement: Throughout all of human history, each major revolution or major event has lead to an even more important event or more significant revolution following it. During the Paleolithic period, humans grouped together in small societies such as tribes, and survived by gathering plants and hunting wild animals.The Paleolithic is characterized by the use of stone tools, although at the time humans also used wood and bone tools. Humankind gradually evolved from early members of humanity, who used simple stone tools. They transformed into fully behaviorally and religious modern humans or Homo sapiens during the Paleolithic era. During the end of the Paleolithic Revolution or the Upper Paleolithic, humans began to†¦show more content†¦The earliest known empire appeared in Egypt called the Akkadian Empire, it was an early Mesopotamian empire. The Achaemenid Empire (550–330 BC), also known as the first Persian Empire, covered Mesopotamia, Egypt, Greece, the Middle East,Central Asia, and part of India. In India came the Mauryan Empire ruled by the Mauryan dynasty from 321–185 BC.Under Emperor Asoka the Mauryan Empire became the first Indian empire to conquer all of the Indian Peninsula. In the reign of Asoka Buddhism spread to become the dominant religion in ancient India. In China of the Axial Age, the era of the Warring States ended in 221 BC with the l conquest of Qin.The Qin Dynasty was soon was overthrown by the Han Dynasty (207 BC - AD 220) which became one of the most long lived dynasties. In the Second century the Han Empire expanded into Central Asia. The Ottoman Empire was a successor of the Abbasid Empire and it was the most powerful empire to succeed the Abbasi empires at the time, as well as one of the most powerful empires in the world. The Ottoman Empire centered on modern day Turkey, dominated the eastern Mediterranean, overthrew the Byzantine Empire to claim Constantinople. The Silk Road was an ancient network of trade routes that were for centuries central to cultural interaction through regions of the Asian continent connecting the East and West.Though silk was a major trade item exported from China, many other goods were traded, asShow MoreRelatedManagers Can Be Developed, but Leaders Are Born, Not Made.1683 Words   |  7 PagesManagers can be developed, but leaders are born, not made. 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