Globalization and its Effects on Organizational Structure and Management
Unmistakably, the topic of globalization has received profound attention since the early eighties. This is evidenced by the increased discussions on the topic in conferences and scholarly debates. The mainstream media and other debates and articles continue to focus on the issue, identifying the dynamism of the topic. Consequently, it is arguable that globalization is an issue that carries great significance on the contemporary society. Furthermore, the topic has also assumed centrality in terms of the relationship with other disciplines including economics, cultural studies, sociology, business management, et cetera. Unfortunately, the issue of globalization has received less focus in relation to business and management in general. This article seeks to identify globalization as an important subject in management. It seeks to argue that globalization greatly affects organizational structures and that the future of management is to a great extend founded on globalization.
What is globalization and what are the dimensions of the issue? Globalization is the integration of global activities like goods and products exchange, integration of information around the globe, exchange and integration of knowledge and culture. These form the main structure of globalization as a global phenomenon. As stated earlier, globalization affects every subject and topic of human endeavors. Like the rest, organizational management is not left out. Considering the major pillars of globalization mentioned above, how can business organizations be affected by globalization? The following sections elucidate on the way business organizations are greatly impacted by globalization. To achieve this, the main pillars of globalization, which include integration of knowledge, communication, goods and products exchange, information and culture will be analyzed in relation to business organization and management. It will examine how information flow can be organized in business organization and how it can be made to reflect on the issue of globalization. Management of knowledge and cultural diversification will also be examined as the world continually becomes a global village.
As the world continually enters into the globalization sphere, conventional criteria in organizational structures need to be reformed. Prasad and Prasad (2006) point out that for any successful operation of an organization, internal restructuring must be done to ensure that the organization’s structure incorporates the global thinking element. They also argue that monolithic view of certain regions should be put to an end. Specifically, developed countries need to view each developing country specifically and not generalizing them and assuming that they are inconsequential.
Organizational structure and information flow
Economics of comparative advantage points out that a good flow and utilization of information is integral to success of any business organization. Through an appropriate information system management, the organization would be in position to identify the needs of the market and hence develop products that meet the international quality and standards. Through this an organization spreads its markets beyond their boundaries. International operations thus offer the organization an opportunity to widen its market while at the same time increasing their access to resources. Among the most important resources that an organization stands to gain is knowledge. Considering this, it is arguable to say that information systems of an organization plays the central role in operations and hence the definitions of success for the organization. This means that an organization operating beyond boundaries must have an appropriate strategy that will offer a competitive advantage. This, according to King and Sethi (1999) can only be reflected in their information system.
This makes globalization one of the areas that are greatly implicated by globalization. With globalization, new challenges have been witnessed in management of information. Unlike the conventional approaches to information system management, globalization calls for a more dynamic approach that puts into consideration contemporary challenges. Particularly, the contemporary organization of information systems must reflect the issue of cross boundary management. With businesses operating beyond a given boundary, organization of information systems requires that cultural diversity is considered. In addition, the organization must also reflect an appropriate organization structure and business process that will promote information system management and organization.
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