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How Has Globalization Affected Corporate Strategy in the 21st Century?

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Introduction

How Has Globalization Affected Corporate Strategy in the 21st Century International Business Strategy Siobhan Connell In the last 21 years the notion of a multinational company has changed significantly. This is best demonstrated by the 1973 United Nations definition, which clearly stated an enterprise is multinational if it "controls assets, factories, mines, sales offices, and the like in two or more countries" (Bartlett, Ghoshal 2000 p.3). As we know a multinational corporation is much more then just that it controls foreign assets, it must also have a substantial direct investment in foreign countries, as well as engaging in some form of management of these foreign assets. The evolution of corporations over this time has been somewhat difficult and by no means is the process of change finalized. As with most things this evolution and learning process could be seen as being life long. The environment in which we operate clearly evolves each year and to stay ahead businesses are now required to stay ahead of developments to compete. Some of the slower players, such as Phillips (Bartlett 1999) merely lost market share through this evolution, others in the past and perhaps in the future will lose their businesses. To understand the importance of multinational corporations in relation to the world economy we see that they account for over 40 percent of the worlds manufacturing output, and almost a quarter of world trade (Bartlett, Ghoshal 2000 p.3). ...read more.

Middle

Bartlett and Ghoshal have gone beyond this to advocate the development of the transnational corporation. This takes the concept of global corporations one step further. Corporations to prosper in a globally competitive environment, should concentrate wherever possible on responding to cost pressures, leveraging of knowledge and information, whilst ensuring local responsiveness to consumer needs (1989 p.13). Cost reduction are imperative to ensure the ongoing viability of corporations. The sharing of costs globally for items such as R & D and mass production both provide examples of significant cost reductions, while enhancing learning and knowledge. By increasing the availability of information across the group you are more likely to also encounter a higher quality product as the innovation and knowledge is shared for the corporations greater good. Often companies forget that knowledge does not just reside in just the home country. Important information such as the local consumer market are often best to be determined by local managers so as to respond to local needs. In relation to local responsiveness Theodore Levitt (1983) provides a somewhat extreme view of the global market. His philosophy is that technological, social and economic developments over the last two decades have combined to create a unified world marketplace in which companies must capture global-scale economies to remain competitive. ...read more.

Conclusion

To win, a company must now achieve all three goals at the same time" (1989 p 25). REFERENCE LISTING Bartlett, Christopher A. 1983 "Case 6-1 Proctor and Gamble Europe: Vizir Launch", taken from Bartlett, Christopher A. & Ghoshal, Sumantra 2000 Text, Cases, and Readings in Cross-Border Management, 3rd Edn, McGraw-Hill International Editions, Singapore, pp 632 - 647. Bartlett, Christopher A. & Ghoshal, Sumantra 1989 Managing Across Borders: The Transnational Solution, Harvard Business School Press, Boston Massachusetts. Barlett, Christopher A. 1999 "Case 2 -4 Phillips and Matsushita 1998: Growth of 2 Companies", taken from Bartlett, Christopher A. & Ghoshal, Sumantra 2000 Text, Cases, and Readings in Cross-Border Management, 3rd Edn, McGraw-Hill International Editions, Singapore, pp 164 -180 Bartlett, Christopher A. & Ghoshal, Sumantra 2000 Text, Cases, and Readings in Cross-Border Management, 3rd Edn, McGraw-Hill International Editions, Singapore. Gomes-Casseres, Benjamin & McQuade, Krista 1991 "Case 4-1 Xerox and Fuji Xerox", taken from Bartlett, Christopher A. & Ghoshal, Sumantra 2000 Text, Cases, and Readings in Cross-Border Management, 3rd Edn, McGraw-Hill International Editions, Singapore, pp 418 - 443 Hill, Charles W. L & Jones, Gareth R. 2004 Strategic Management Theory: An Integrated Approach, 6th Edn, Houghton Mifflin Company, Boston, Massachusetts. Levitt, T. 1983 "The Globalization of Markets" Harvard Business Review, May - June, pp. 92 - 102. Srinivasa, Rangan V. 1985 "Case 3-1 Caterpillar Tractor Co.", taken from Bartlett, Christopher A. & Ghoshal, Sumantra 2000 Text, Cases, and Readings in Cross-Border Management, 3rd Edn, McGraw-Hill International Editions, Singapore, pp 259 - 279. ...read more.

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