The Jones Corporation’s Logic of Globalisation
The term globalisation connotes the integration of national economies into a single worldwide economic system. Globalisation has spruced the markets, competition and the free flow of knowledge, services, goods and capital. Globalisation has bestowed quicker development, easier access to novel technical know-how, and offers cut-throat competition through cheaper imports. Globalisation has in fact nurtured the world economy to function more proficiently and has generated millions of jobs as in the case of India and China. At the same time, critics argue that Globalisation has left behind many underdeveloped countries and it has impacted both developed countries as well as developing countries. For example, due to globalisation, China has increased approximately 375% in real GDP while India has achieved approximately 98% increase in its real GDP.
Supporters of globalisation are of the view that it promotes free trade between nations thereby eradicating poverty and guaranteeing overall development and market instruments like intellectual property rights are essential to safeguard the environment and to usher in overall development.
Globalisation can be explained as the process of widening, deepening and gearing up the global-scale collaboration influencing all parts of current social life from financial to spiritual and from cultural to criminal.
Globalisation is concerned with the development of a vibrant global system creating opportunities and limiting controls. Globalisation breaks and liquidates political boundaries and is concerned with the redistribution and destruction of political and social-economic space.
Economic globalisation means consolidation of national economies into the single international economy mainly through direct foreign investment by multinational companies, removal of trade barriers on export and imports, maintaining uniform excise duty structure throughout the globe, abolition of trade protectionism, an international movement of workers, short-run capital inflows and transfer of technologies.
The globalisation process consists of the following:
- Concerns with the economic trend towards marketisation. In other words, freedom from command, restrictions, class monopolies and status.
- Political decisions involving democratisation, liberalisation and the decentralisation of power.
- Cultural trends towards universalisation, the generalisation of standards and values to a very high degree of generality that will allow extreme intensities of cultural specialisation.
One of the main objectives of the World Trade Organisation (WTO) is to accomplish a laissez-faire trade system. Hence, WTO put a lot of effort into minimising the barriers to free trade. Though WTO has been christened as a democratic institution in actual parlance, WTO is dominated by the developed countries and by the mighty multinational corporations of these rich nations. Hence critics argue that developing nations have little articulation within the WTO framework.
Some studies expose that in spite of globalisation, poverty rates tend to scale and wages continue to drop whereas investment and trade obstacles still linger in developing and poor nations. Globalisation has in fact configured the world economy more resourceful and has created millions of jobs as in the case of China, Brazil and India. Globalisation also endeavours to implement global assimilation by intensifying product market thereby integrating trade liberalisation and has resulted in a shift in less skilled to more skilled labour.
Thus, globalisation means ‘a method of eradicating government-enforced restrictions on flows between countries so as to create a “borderless”, “open” world economy.’
Responding to demands of present corporate governance demands, Jones Corporation’s management seems to be perusing an optimistic perception of globalisation. As we have already seen, globalisation will strive to achieve and promote competitiveness on an international level, as it demands dramatic transformations in technology, strategy, management styles and working system. A transformation in the stratagem demands a thorough knowledge of the set of values, behavioural patterns and convictions that influence the day-to-day performance of a company. Dowling and Schuler’s replica is based on four broad approaches through four phases of global development namely polycentric, geocentric, ethnocentric and regiocentric.
Since Jones Corporation is having business operations in a host of nations, they are witnessing confronts of relocation of ‘ethnocentric’ philosophies and thereby rationalising the significant practices and policies in their communications with their local managers, externalities and other employees.
One another alternative is the espousal of polycentric approach to numerosity of business system parameters which managers operating from specific host nations will, in turn, require to rationalise to dominate stakeholders like investors and corporate management streams.
Jones Corporation’s strategy as regards marketing in other nations within their provincial groupings like where an Australian manager works in Japan whereas a retail manager from Japan is presently carrying out a 30 days’ task in Australia demonstrates the regiocentric approach of global development. It may offer both to the group and to the individuals to recognise material advantages in internalising a “win-win” philosophy.
Such espousal may be specifically open to follow hybrid organisational practice by understanding the corporate philosophy in modes that may appear to mirror reciprocal organisational espousal.
Thus, Jones Corporation’s strategy of exchanging international assignments like a UK manager in Germany and his German colleague similitude work in the UK symbolises this approach.
Thus, the outcomes that strain is forthcoming in coping with the needs of exchange of knowledge and operational supervision of new business formations, compelling an afterthought of where senior managerial skills may be sources from and deployed to which is more akin to the geocentric approach of global development.
Further, Jones Corporation if it really wants to be called a multinational company should initiate steps to become a chief world leader in its sector by penetrating into some target retail markets “China, India, Brazil and Argentina “as these are fast-developing economies and has about 40% of world’s population. Jones Corporation by selecting apt locations of expansion can reap many advantages like the minimisation of exchange risks, improved leverage and arbitrage opportunities, benefits offered by multiple sourcing strategies or by a hedged marketing strategy, benefits derived due transfer price manipulation etc.