This paper provides an analysis of changes in the business environment in our continuously globalizing world. It begins by taking a look at the historical roots leading up to the globalizing world we have today. As organizations and businesses look to expand internationally in our increasingly interconnecting world, workforce demographics begin to change accordingly and with it are business practices. Human Resources adjustment becomes increasingly important, as its functions are important to the flow in information within an organization. Finally, in a world where borders are becoming more transparent, shifts in international law and ethics need to be made to regulate the externalities of international commerce. All in all, information technologies like the Internet greatly enhance our communication abilities and prepare our world for a period of growth and development unprecedented in human history.
Since the conclusion of World War II, the world has experienced an unprecedented level of interconnectivity known as globalization. International organizations like the United Nations and World Trade Organization have played a fundamental role in organizing the means to promote interconnectivity. Another major contributor to the phenomenon of globalization is what is known as the information revolution. The rapid spread of Internet has made it possible for information to be transmitted around the world in an instant. As the world experiences this major shift in structure and roles, the business environment will have to adjust accordingly. Entire organizational structures need to adjust to increasing diversity within the workplace as well as increasing diversity in external business affairs. Adjustment will require making changes in the organization’s HR practices. In an increasingly interconnecting world, ethics and legal obligation becomes increasingly important for the business’s executives. Several common sense steps can prepare an organization for the global shift our world is transitioning into. These steps include making adjustments to employee demographics, organizational function, HR practices, legal and ethical value as well as preparations. First and foremost, it is important to address which changes due to increased globalization are in fact being made and what the resulting changes in workforce demographics are.
The origins of our modernized society come from early European expansion during the 15th and 16th centuries. As European powers set out to colonize around the world, major shifts were made in the social and economic structure of the world. Initially, the western societies practiced feudalism in which the population worked for a king to provide social order. During the period of the late 17th century known as “The Enlightenment”, theorists like Thomas Hobbes and John Locke set the foundation for modern democracy (Heywood, 2012). The United States was the first society to fully break away from European colonial rule to form a representative democracy. However, impacts from European expansion had already begun to take place in what is known as the “Triangle Trade”. The triangle trade involved European colonists setting out and acquiring slaves from Africa either by trading weapons to their leaders or simply capturing them. The Europeans would send the slaves to North America, where they would provide their labor for free under harsh conditions. The goods produced such as cotton, tobacco, hemp and indigo were sent to Europe for consumption by upper socioeconomic class (Diamond, 1998). This point is the beginning of higher living standards in the west as opposed to lesser-developed countries in the south and east. Similar forced impacts were made as Spanish conquistadors conquered Central and South America, Portuguese colonized Brazil and England expanded throughout around Africa, India and Asia. This is the foundation of modern-day international trade.
Standard economic theory incorporates the supply and demand of a product on a shared graph relating the price and quantity of a product. The producer and supplier exchange the good with the consumer and demander of the product for an agreed price. According to economic theory, there is benefit for both the consumer and producer exactly at the price of exchange. This line divides the producer and consumer surplus (Pindyck, 2005). Because slavery was essentially free labor, the cost of producing agricultural goods was very minimal. And when the owners of these would sell the products, almost all of the revenue accumulated was profit. Profit accumulation and thus resource stockpiling put the colonist European societies far ahead the production capabilities of any other in the world heading into the period of industrialization. The period of industrialization was followed by World War I and World War II, both of which were costly wars that greatly hindered the process of development. To avoid another catastrophic world war from taking place, the United Nations and other international organizations were created to provide a forum for international affairs to take place instead of war and global anarchy. The creation of these organizations sets the stage for the modern shift in global economic activity towards interconnectivity.
It has generally been agreed upon that there is mutual growth in trade. It is also traditionally accepted that the removal of trade barriers such as quotas and tariffs increases benefit and growth for both parties involved (international economics). Having understood this, international forums like the United Nations and World Trade Organization have been working towards removing such restrictions and the collective international effort to promote trade and growth was created. Since then, trade has only become easier in almost all industries such as agriculture and clothing as tariffs have been virtually eliminated (Martin, 2007). With technological advancement in travel and communication, there has been tremendous opportunity for venture capitalists to utilize the resources and work forces around the world. Because of the resource imbalanced created during the period of European expansion, only wealthy capitalists in pre-modernized societies have the opportunity to travel to lesser developed countries in Asia and Africa to utilize resources for production. The same does not take place the other way around. As a result, a lot of economic production activity has shifted to lesser-developed countries, leaving working class populations in these countries to deal with the impact of these moves. The venture capitalists utilize the sophistication of their technologies and production capabilities with the power of their currency compared to the weaker lesser-developed country resulting in maximum benefit for the mass producer at the expense of the small-time consumers and laborers. In short, the mass producers get to enjoy the best of both worlds at the expense of the people.
The people have not taken this lightly. Recently, there has been economic turmoil in the European Union and the United States because of the practices of wealthy venture capitalists. Also, there have been political demonstration and revolution in countries throughout the world like Egypt, Turkey and Brazil because of the damage done by these decisions (Fadel, 2011). For too long the wealthy and venture capitalists have taken advantage of resources and people for their own benefit while poverty and pollution continue to plague the masses. As a result, people around the world have been demanding changes as our world continues to globalize and demographics shift as borders increasingly become blurred. The change requested can be summed up in a short phrase; equal treatment across the board for workers.
Prior to and during the period of globalization, there has been a far greater allocation of increased benefit to producers and venture capitalists while the people working for these capitalists have unequally been compensated for the growth. As a result, changes in the workplace are likely to begin remedying the imbalance. The simple remedy is to make conditions positive for the individual workers who are simply working to provide a standard of living for their close ones. This includes everything from work force environment to legal administration of business practices.
With globalization in effect, many businesses are looking to expand internationally. Expanding internationally promotoes positive foreign relations and may require hiring a multiethnic staff from a variety of different backgrounds. As businesses search to meet their international needs, they need to make sure the needs of their international resources are met. This is why it is important for an HR department to fully orient members of the staff. As some workers may be imported to service their skills, it is important for the HR department to take on helping the worker with tasks such as housing, immigration and employment paperwork as well as cultural adjustment. Current HR practices have room for expansion in areas outside of the workforce. Incorporating a staff from a variety of different backgrounds to work together provides benefits to the organization in the form of reach and combined knowledge and skills. The greatest shift that needs to take place in the work environment is the creation of a sense of equality between all members of the organization whether it is a laborer, a manager or an executive. Our world is evolving from one based on exploitation and one-sided benefit to that of mutual growth and benefit. As a result, it is important for businesses to continue moving forward by continuing to make the business about the people rather than about themselves. With the demographics of the workplace shifting to become more internationally oriented, a redistribution of benefit between the executives and workers is important for the organization’s success.
A change in workplace demographics gives the organization an international reach it requires to continue growth and expanding operations. This is clear cut and given. However, in order for the workers to be happy and continue working productively, the executives at the top of the chain may have to make some sacrifices they did not have to make in the past. Where earlier in the 1980’s and 1990’s companies may have gotten away with administering horrible working conditions to minimize the cost of production, such exploitation is hard to get away with in the age of the Internet. As a result, organizational accountability is going to become increasingly apparent in our globalizing world. Companies are no longer going to quickly jump into unethical practices because of the consumer response it is likely to generate. Therefore, organizations have to come up with innovate ways to achieve their objectives while maintaining a standard of ethics. The primary objective of a business being profits has driven businesses to make especially bad decisions throughout the course of history. These decisions would not seem rational but for not the motive of money and profit. But as the world becomes increasingly interconnected and average peoples in each society can see what takes place in others around the world, it is in the best interest of the business to keep a positive public image if it wishes to continue doing business. This may hopefully lead to the seize of exploitive business practices around the world.
A key part to the successful transition of a business in the increasingly globalizing world today is effective human resources practices. Effective HR management includes staffing, benefits and communication among the organization and its employees. First and foremost, a college education is important, as it is the first level of education that covers business and professional, real world material. Without a college education, an employee is much less prepared for the attentiveness and quickness required in the business world. A company that relies on college-educated employees is more likely to experience success than a company that does not simply because of the thinking capabilities of the employees. In short, in our globalizing world, a high school education simply does not cut it. As an HR becomes more selective in their staffing, they can expect longer employee retention. With a longer expected retention, organizations can begin incorporating rewards for exceptional achievements and detailed employee relations and communication. The age of the Internet removes all curtains and covers between the employee and employer, making it clear and transparent the objectives of each party. For example, the factory worker in China getting paid cents a day to make Nike sneakers can know that Nike is selling the shoes for over $60 in the United States. Knowing how easily information can flow across national borders, it is important for the business to maintain a positive and transparent attitude with its employees. This will benefit the organization by having longer retained employees working harder to achieve the team objectives.
A major reason for the early imbalance in international trade is the principle of national sovereignty. Every country has a right to self-determination and thus a right to govern itself. But as our world increasingly becomes interconnected and borders become more transparent, individual self-governance is becoming increasingly irrelevant. Instead, international regulation is becoming more suited to dealing with the level of interconnectivity the world is experiencing today. Organizations such as the European Union (EU), the Association of South East Asian Nations (ASEAN) and the World Trade Organization (WTO) are all examples of international efforts to transnationally regulate commerce to meet the needs of our continuously globalizing world. As a result, our world may undergo a shift from individual self-governance to that of collective global governance. A major problem with international law by organizations such as the United Nations today is a lack of authority and enforcement (Clarkson, 2012). But as the world becomes more interconnected the need for binding international law is created, a legal shift towards global governance is likely to take place. In conjunction with the legal shift towards binding global governance is the likely shift in ethical practices that will take place. As the age of information promotes transparency and accountability, it will become increasingly difficult for businesses to get away with harmful and unethical practices. As the cost of unethical practices through consumer reaction outweighs the benefits of such, unethical and exploitive practice may be limited. These are examples of the legal and ethical shifts to come as a result of the globalizing world.
Current employees and leaders can begin to prepare for the coming by preparing management plans that group the entire organizational staff as a single unit. This will promote employee morale and teamwork towards achieving the organizations objectives. One of the greatest tools for growth and development is open communication. Without communication, it can become exponentially difficult to coordinate among different divisions in the organization. A great way to promote communication within an organization is by providing both the workers and management with the technology to do so with ease. They can be anything from handheld radios to instant messaging software using the Internet. The Internet makes it possible to send information across the world in an instant. Therefore, if an organization wishes to expand internationally, the incorporation of the Internet in its communication is essential. This can be applied to all sorts of business operations such as inventory management, sales management, marketing management and resource management. Having a clear-cut organized communication system using the instantaneous ability of the internet creates an environment for efficiency and organization. Also, workers being able to access work related information in an instant further promotes growth. Employees and leaders can begin the shift by electronically organizing their basic functions and growing from there. Eventually, all communication and aspects of business can be done electronically, minimizing the possibility of error and loss while maximizing efficiency.
In conclusion, our continuously globalizing world puts businesses and people in an unprecedented position. The increasing interconnectivity of the world creates incentive for businesses to increase the diversity of their workforce. The increased globalization and demographic shifts has led businesses to changes in how the organization functions. These changes have impacted the function of HR in staffing, rewarding and communicating among the employees, the management and executives. As the world becomes increasingly interconnected, the need for binding international law and accountability will inevitably take place. As tools like the Internet make the world more transparent, it is likely that ethics will play a bigger role in business decisions than they do today. All in all, the key to being successful in this continuously globalizing world is effective communication throughout all levels of an organization. This is made exponentially easier using the Internet. With the instantaneous transfer of information around the world that the Internet provides, our global society is set for a period of growth and development unprecedented throughout the course of human history.
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Diamond, J. M. (1998). Guns, germs, and steel: the fates of human societies. New York: W.W. Norton & Co.
Fadel, M. (n.d.). Public Corruption and the Egyptian Revolution of January 25 | Harvard ILJ. Harvard ILJ | Harvard International Law Journal. Retrieved June 24, 2013, from http://www.harvardilj.org/2011/04/online_52_fadel/
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