Quiz 18: Globalization and Challenges for the Future

Business

Globalization involves integration of all the transactional activities across the world. It involves transaction of goods, services, knowledge and culture. Effects of globalization on the world economy and trade practices are given below: • Widespread access to goods from foreign markets. • Decrease in labor costs for companies as they transfer labor intensive processes to the developing countries with lower wage rates. • With profound increase in connections between the economies across the world, globalization has created an environment wherein the positive or negative circumstances of a country might affect the world economy. • Interconnectivity of economies across the world has resulted in creation of many unprecedented international trade agreements and laws. Thus, globalization has created an interrelated world economy that is beneficial for all the countries across the world.

One significant difference between the American and the Japanese work culture is the higher degree of loyalty expected from Japanese employees to their companies. This higher degree of loyalty implies dedication towards the company, sometimes at the expense of one's own personal life. Apart from this, Japanese culture values team work which is not present in American culture, as they give emphasis to the individuality. In America, promotions are based on performance , whereas performance appraisal in Japan takes place on the basis of seniority of employees. Due to these differences, administration style of a manager needs to be adjusted according to the work culture of Japan, as elaborated below: • The manager should motivate the employees by appealing to their sense of loyalty. • At the same time, he needs to become more familiar with the Japanese system of initiating projects by middle management. In America, management decision are participatory in nature , but in Japan upper management acts in a more supervisory and passive manner. • Finally, a worker's degree of dedication towards his job would indicate his work life balance. A person's life outside of work may be diminished, due to greater expectations of the organization. Hence, it is concluded that culture plays an important role in determination of the work practices.

Trade barriers are the restrictions imposed by the governments on international transactions of a country. The elimination of trade barriers between Country E to the companies of Country A would result in stiffer competition, faced by the native companies. As a result of which, the companies of country E would operate with greater flexibility without any tariffs or protections. Therefore, the foreign firms need to increase their efforts in order to maintain their market share in the European continent. Hence, companies of Country A need to develop new competencies for growth and survival.