Globalization and Management

Globalization and Management

Important to Note
So, if you are asked to assess HOW EFFECTIVE globalisation has been you have to ask yourself HOW MUCH INTERCONNECTION AND INTEGRATION HAS TAKEN PLACE BETWEEN PEOPLE, THEIR IDEAS and THEIR ACTIVITIES in DIFFERENT PARTS OF THE WORLD

Examples of Globalization
The Internet Selling local products (e.g. OCK Curry Puff) in the global market (e.g. Malaysia, China, Indonesia, etc) Attending lectures by a British professor teaching in an American University via a web-conference in NUS

Examples of Globalization
People in different parts of the world: Wearing Made in China clothes Driving Made in Japan cars Sipping Australian Wine while watching the LIVE telecast of a soccer match in Germany

Key Driving Forces of Globalization

1) Developments in transportation and communications Enables globalization by encouraging it:
Transport systems are the means by which people, products and materials are transferred from one place to another Communication systems are the means by which information is transmitted from place to place in the form of ideas, instructions and images

Key Driving Forces of Globalization

1) Developments in transportation and communications Transportation
Improvements in transport technology has shrunk the world 19th century steam engine 20th century jet engine, large ocean-going vessels move people Containerisation moves goods fast and cheap over long distances (ships trucks)

Key Driving Forces of Globalization

1) Developments in transportation and communications Transportation
Increasing mobility of goods and people Countries have built efficient and integrated transportation infrastructure (e.g. airports, seaports, railways, highways to facilitate movement)

Key Driving Forces of Globalization

1) Developments in transportation and communications Communications
Faster and more convenient communication People all over the globe can communicate via telephone, e-mail, fax, video conferencing, etc Satellite technology allows for simultaneous communication Optical fibre systems can transmit large amounts of information and very high speeds

Key Driving Forces of Globalization

1) Developments in transportation and communications Communications
Internet has enabled consumers to access information instantly, conveniently and efficiently Internet has transferred the way people communicate, do business, obtain information and purchase goods and services

Key Driving Forces of Globalization

1) Developments in transportation and communications Communications
Transnational Companies can operate as information from the head office can be easily and effectively transmitted to every branch office anywhere in the world

Key Driving Forces of Globalization

2) Transnational Companies Large global firms that operate in a number of countries and have production and service facilities outside the country of their origin Example: Microsoft, Toyota

Key Driving Forces of Globalization

2) Transnational Companies TNCs set up operations in different parts of the world because:
Sourcing for new markets Lowering cost of production Production of different parts for products and assembly done in a variety of countries

Impact of Globalization
1) Economic Impact Improvements in Standards of Living Increased Competitions among Nations
Investment and Market Talent

Widening Income Gap between the Rich and Poor

Impact of Globalization
2) Social Impact Increased Awareness of Foreign Culture Loss of Local Culture

Impact of Globalization
3) Economic Impact Environmental Degradation
Deforestation and Related Problems Global Warming Environmental Management

Impact of Globalization
Economic Good Effects - Improvement in Standard of Living - Competition Among Nations (Investment & Market) Bad Effects -Competition Among Nations (Talent) - Widening Income Gap between the Rich and the Poor Social Good Effects - Increased Awareness of Foreign Culture Environmental Good Effects - Environmental Management

Bad Effects - Loss of Local Culture

Bad Effects - Global Warming - Deforestation and Related Problems

Impact of Globalization
1) Economic Impact Improvements in Standards of Living As countries trade and open their doors to foreign investment, they earn more revenue As a result, their citizens benefit from a higher standard of living Free trade allows for a larger variety of foreign goods for the consumer to choose from Better quality of life

Impact of Globalization
1) Economic Impact Increased Competition Among Nations
Investment and Market
Globalisation means more competition as TNCs source for the cheapest places to lower their cost of production Governments have to compete with each other to attract these foreign corporations to invest When China opened its doors to foreign investment in the 1970s, industrial cities like Suzhou, Wuxi and Dalian were formed

Impact of Globalization
1) Economic Impact Increased Competition Among Nations
Talent
Highly skilled people are in high demand all over the globe Globalisation allows people to move freely from one country to another in search of employment Advanced economies with stable or shrinking populations seek new talent pools Emerging economies seek back their best and brightest E.g. Indias Brain Drain (e.g. Computer)

Impact of Globalization
1) Economic Impact Widening Income Gap Between the Rich and the Poor
Due to rapid development in many countries and the spread of poverty in others Developed countries experience rapid income growth as they own most of the manufacturing activities

Impact of Globalization
1) Economic Impact Widening Income Gap Between the Rich and the Poor
These developed countries and their TNCs are able to attract investments, skilled labour and resources away from poor areas International trade has generated much revenue for them

Impact of Globalization
1) Economic Impact Widening Income Gap Between the Rich and the Poor
However, Developing Countries face trade restrictions put up by Developed Countries They are not capable of manufacturing better quality goods that fetch higher prices Poorer nations are only attractive for labourintensive and low-cost ventures

Impact of Globalization
1) Economic Impact Widening Income Gap Between the Rich and the Poor
The rich developed countries prosper with better opportunities while the poor developing countries face economic uncertainties like retrenchment Widening income gap can lead to social problems, increasing tension between the rich and the poor

Impact of Globalization
2) Social Impact Increased Awareness of Foreign Culture
Travel, the Internet, mass media (products of globalisation allow you to learn more about foreign culture

Loss of Local Culture

Global (Western) brands dominate consumer markets in developing countries Creation of homogenous culture across the world Spread of pop culture and erosion or loss of local culture Negative influence of youth Enforced beliefs

Impact of Globalization
3) Environmental Impact Depletion of natural resources by TNCs Concern over profits vs. protection of the environment Lack of funds to implement environmental protection Environmental Degradation
Deforestation and Related Problems Global Warming Environmental Management

Impact of Globalization
3) Environmental Impact Environmental Degradation
Deforestation and Related Problems
Rainforests cut to make way for development Rainforests cut down for industries, agriculture, housing, forestry, cattle ranches Planting of cash crops Projects to achieve higher level of economic development

Global Warming Environmental Management

Impact of Globalization
3) Environmental Impact Environmental Degradation
Deforestation and Related Problems
Soil erosion, extinction of flora and fauna, flooding and haze Loss in tourism (haze) Water pollution

Global Warming Environmental Management

Impact of Globalization
3) Environmental Impact Environmental Degradation
Global Warming
Large amount of greenhouse gases produced by increased usage of airplanes and ships Factories and transportation also emit greenhouse gases, contributing to the increase in world average temperature.

Environmental Management
Greater awareness Sustainable development is the key to further growth Source for alternative energy

Strategies to Maximise Opportunities and Overcome Challenges

Diversifying the Economy
Technology-Intensive, High Value-Added Manufacturing Life Sciences Regional Hub for Services (Education) Tourism (Integrated Resorts)

Strategies to Maximise Opportunities and Overcome Challenges

Diversifying the Economy
Technology-Intensive, High Value-Added Manufacturing
Life Sciences
Genetics, new medical treatments Gene therapy, new drugs, genetically modified food products Setting up of supporting institutions like A*Star IMCB (Institute of Molecular and Cell Biology) Help and support biomedical R&D capabilities

Strategies to Maximise Opportunities and Overcome Challenges

Diversifying the Economy
Technology-Intensive, High Value-Added Manufacturing
Apart from encouraging R&D, Singapore continues to attract TNCs to set up their high value-added manufacturing activities
E.g. Seagate (Generate jobs, affirms Singapores position as a manufacturing hub)

Strategies to Maximise Opportunities and Overcome Challenges

Diversifying the Economy
Regional Hub for Services (Education)
Complementing local universities, leading international universities have set up branches in Singapore
U Penns Wharton School of Business, Chicago Graduate School of Business, Shanghai Jiao Tong University Strong university sector which attracts talent

Strategies to Maximise Opportunities and Overcome Challenges

Diversifying the Economy
Regional Hub for Services (Tourism)
Generate economic growth
Two Integrated Resorts (IRs) will be built in Marina Bay and Sentosa Stiff competition from other countries as tourist destinations Singapore cannot offer natural tourist attractions and so must offer innovative man-made attractions to attract tourists Investment of capital by investors Jobs and economic growth

Strategies to Maximise Opportunities and Overcome Challenges

Nurturing the Growth of Small and Medium Enterprises (SMEs) Venturing Abroad Expanding Market Reach Through Economic Co-operation

Strategies to Maximise Opportunities and Overcome Challenges

Nurturing the Growth of Small and Medium Enterprises (SMEs)
Provide jobs Support operations of TNCs by supplying them with components (e.g. supplying thread, buttons to a garment factory) Enhance the attractiveness of Singapore as a regional manufacturing and services hub

Strategies to Maximise Opportunities and Overcome Challenges

Nurturing the Growth of Small and Medium Enterprises (SMEs)
Problems faced by SMEs
Unable to compete with big corporations due to a lack of resources (e.g. small furniture shop vs. IKEA) Lack expertise in using advanced technology Family-run business Shortage of skilled personnel Small domestic market

Strategies to Maximise Opportunities and Overcome Challenges

Nurturing the Growth of Small and Medium Enterprises (SMEs)
Helping SMEs
Loan schemes from banks Association of Small and Medium Enterprises (ASME) set up to provide enterprises with help Training, regular seminars and workshops Tax exemption for new companies

Strategies to Maximise Opportunities and Overcome Challenges

Nurturing the Growth of Small and Medium Enterprises (SMEs)
Problems faced by SMEs
Unable to compete with big corporations due to a lack of resources (e.g. small furniture shop vs. IKEA) Lack expertise in using advanced technology Family-run business Shortage of skilled personnel Small domestic market

Strategies to Maximise Opportunities and Overcome Challenges

Venturing Abroad
Due to limited resources, Singapore has to look overseas to achieve further growth Regionalisation Investing in countries with land, labour and new markets
Allows Singapore and the host country to grow and promotes development in the region China (Suzhou) India (Karnataka)

Spread investment across the world allows for Singapores growth to be maintained even if markets and investment opportunities in one country / region is weakened

Why Karnataka?
Strategic Location

Karnataka
Encourages Government Foreign Investment and Supports Businesses
Supportive

Near Mumbai, Chennai and New Delhi

Skilled Manpower

Skilled IT Professionals

Strategies to Maximise Opportunities and Overcome Challenges

Expanding Market Reach Through Economic Co-operation
Due to our small population, we have a small domestic market Economic and trade ties must be established with other countries to enable local companies to sell their goods to overseas markets
Sign Free Trade Agreements (FTAs)

Strategies to Maximise Opportunities and Overcome Challenges

Expanding Market Reach Through Economic Co-operation
Benefits of FTAs:
Enjoy more choice in goods and services Standards will improve with increased foreign competition Singapore companies can sell their goods overseas and increase their profits Local companies find it easier to venture abroad

Strategies to Maximise Opportunities and Overcome Challenges

Expanding Market Reach Through Economic Co-operation
Establishment of Special Economic Zones (SEZs)
A geographical region in a country where there are less stringent economic laws Zones of rapid economic growth by using tax incentives to attract foreign investment

Strategies to Maximise Opportunities and Overcome Challenges

Managing Resources Efficiently
Developing People Attracting Foreign Talent Managing the Environment
Managing Limited Land Resources Co-operation with Regional and International Organisations Public Education

Strategies to Maximise Opportunities and Overcome Challenges

Managing Resources Efficiently

Developing People
Promoting Local Entrepreneurship and Technopreneurship
With globalisation, business competition will increase Singapore needs more local entrepreneurs to take risks and come up with products to compete with global competitors

Strategies to Maximise Opportunities and Overcome Challenges

Managing Resources Efficiently

Developing People
Promoting Local Entrepreneurship and Technopreneurship
Amending bankruptcy laws to allow failed entrepreneurs to start again Recognising outstanding entrepreneurs

Strategies to Maximise Opportunities and Overcome Challenges

Managing Resources Efficiently
Developing People
Promoting Continuous Learning among the Workforce Globalisation will render some jobs obsolete Singapore Workforce Development Agency (WDA) established to ensure workforce remains competitive Skills Upgrading (Employability Skills Systems ESS) Equip workers with skills to cope with new demands and job environments Skills Development Fund (SDF) financial assistance to employers to encourage training and skills upgrading

Strategies to Maximise Opportunities and Overcome Challenges

Managing Resources Efficiently
Attracting Foreign Talent
Declining birth rate and requires new skills in a knowledge-based economy
Need to attract foreign talent to meet manpower needs Foreign Talent also brings in foreign business investment potential Create more business opportunities More Jobs Adds diversity to our cultural landscape and makes us cosmospolitan Foreign Talent with specialised skills

Three Pillars of Sustainable Development

Environmental Preservation Economic Development Social Progress

Strategies to Maximise Opportunities and Overcome Challenges

Managing the Environment
Managing Limited Land Resources
Singapore is small (680km2) so land planning is important to maximise land use Challenging not all land can be developed Land use planning must ensure that high-standard facilities for housing, transportation, recreation, commerce, defence and education must be built to ensure sustainable growth

Strategies to Maximise Opportunities and Overcome Challenges

Managing the Environment
Managing Limited Land Resources
Preservation of nature sites Singaporeans can enjoy natural environment Waste Disposal Current facilities on Pulau Semakau landfill will last up to 2030 Need to prolong lifespan while sourcing for alternatives Infrastructure includes waste disposal plants at Tuas, Ulu Pandan, Tuas South and Senoko

Strategies to Maximise Opportunities and Overcome Challenges

Managing the Environment
Co-operation with Regional and International Organisations
Co-operating with ASEAN to solve the haze issue Helping Indonesia detect forest fires with satellite imaging Hosting ASEAN Ministerial Meeting on Haze Globally, Singapore signed agreements to restrict the use of harmful ozone depleting substances Phased out the use of chlorofluorocarbons (CFCs)

Strategies to Maximise Opportunities and Overcome Challenges

Managing the Environment
Public Education
For effective long-run environmental protection, Singaporeans must adopt environmentally-friendly ways and be instilled with a sense of responsibility and personal interest to keep their surroundings clean Education in schools and for the general public Recycling and waste minimisation Clean and Green Week Bring Your Own Bag Day