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Free «Impact Of Globalization on Management» Essay Sample

Globalization is the growth of the economy to a worldwide scale. It is an increase flow of resources and goods between nations and across borders plus the emergence of organization bodies that manage the vast network of transactions. Globalization has greatly influenced the methods of management which in turn, has led to intense competition in the economic market.

Globalization has increased market competition and managers cannot rely on thinking they are the only ones in the market as numerous other managers appear in the international market every day. This makes managers think out of the box to stay at the top.

More markets have become open to international organizations since the total expenditure of operating across borders has greatly reduced due to globalization. Organizations can now access readily available resources such as finances and a vast supply of labor. This makes goods being produced to cost less in the market and also provides a great market for the goods.

The globalization has increased technological advancement in the communication industry. The internet has provided a colossal global village where managers and business persons transact deals as if they are seated in the same place. Applications such as Skype, Google + allow for video conferencing from anywhere in the world. Mobile phones have also adapted with increase globalization, with electronic transfers being incorporated into them making money transfers very fast and readily available. It is not even certain what potential these hand held gadgets have yet.

As globalization continues, organizations are getting brought closer to the clients or customers and management of businesses has to change to fit in. Organizations that employ use of management methods that make most of the opportunities, provided by globalization always succeed and survive in the international market.

Organization changes due to shift from labour-intensive to technology intensive production and service delivery methods

Labour-intensive methods of production are those methods that rely mainly on manpower in the production of good or delivery of services. Technology-intensive methods, on the other hand, are those methods where machines are used in the production of goods and delivery of services. The changing technology is impacting in several ways in the ways of production and service delivery. Technology-oriented methods seem to be having more advantages than labour intensive methods. All sector of the economy have shown shifts from labour-intensive methods to technology-intensive methods. In almost all parts of the word, there is evidence that technology has been embraced in many organizations. It is evident in many parts of the word that indeed technology has been embraced globally.

In the transport sector, we find that machines have broadly been used to offer services. Instead of having people pay and be given receipts in order to travel, they swipe their cards. In that way a machine produces the receipt. No one has to be there to give the receipt or to give back the change. The customers balance is electronically relayed to his/her bank account. Food vending sector id another sector that largely uses technology based methods. In the past, people had to be there to receive the money and give the customer the product. This is no longer the case. Today, a customer just has to swipe his/her smart card and key in the code of the product that he/she wants. In this process, the product is automatically delivered to him/her trough some conveyor belt mechanisms.

Effects of the shift from labour-intensive to technology intensive methods

The shift from labour-intensive to technology intensive methods of production and service delivery has had many effects on the society. These effects have been both social and economic. They are also both positive and negative.

Despite the fact that it is expensive to put in place the technology for operation in a company, the long term effect of technology is positive. The maintenance cost for machinery is far much less than the salaries that would have been paid workers. It is worth noting that unlike manpower, technology does not attract other expenses. With manpower, salary is paid at regular intervals. Employees also need other support programmes like training so that their productivity can be kept high. Machines do not need all these. Apart from the maintenance cost, machines do not attract other expenses. Machines are not paid, neither are they motivated or trained.

The shift has made the process of production of goods and delivery fast and accurate. This has led to a significant increase in the quantities of goods produced by various producers. When the amount of goods produced by a manufacture increases, the amount of goods available for sale also increases. This increase leads to higher income and higher profits. Increase in profits makes it possible for companies to expand. Increase in incomes also result in the increase in employee income, employees earn more and thus, their economic status improves.

The shift from labour-intensive to technology –intensive methods has led to unemployment to many people globally. This is because one machine replaces a high number of employees. This has made many employees lose their jobs. The economic statuses of many citizens have, therefore, worsened. If people face economic challenge, there will result many social problems. People may be forced to engage in illegal activities such as stealing so as to earn a living. This leads to social problems like insecurity in the society. Technology, therefore, has both positive and negative consequences. Proper decisions should be made so as to maintain a healthy society.


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