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Global Operations Strategy Insights

Globalization has led businesses to establish facilities around the world due to improved transportation and communication, opened financial systems, increased import demand, and reduced trade barriers. Managing global operations presents challenges like different languages, customs, laws, and costs. Key issues in managing global operations include acquiring concepts related to global supply chains and logistics, associating historical events to drivers of global operations, developing criteria to evaluate global operations, associating case studies of success and failure to political, social, economic, and technological environments, and envisioning trends in global operations with a respect for diverse perspectives.

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98 views1 page

Global Operations Strategy Insights

Globalization has led businesses to establish facilities around the world due to improved transportation and communication, opened financial systems, increased import demand, and reduced trade barriers. Managing global operations presents challenges like different languages, customs, laws, and costs. Key issues in managing global operations include acquiring concepts related to global supply chains and logistics, associating historical events to drivers of global operations, developing criteria to evaluate global operations, associating case studies of success and failure to political, social, economic, and technological environments, and envisioning trends in global operations with a respect for diverse perspectives.

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viji
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Operations Strategy in Global Environment

MANAGING GLOBAL OPERATIONS

The term ‘globalization’ describes businesses’ deployment of facilities and operations


around the world. Globalization can be defined as a process in which geographic distance
becomes a factor of diminishing importance in the establishment and maintenance of cross
border economic, political and socio-cultural relations. It can also be defined as worldwide drive
toward a globalized economic system dominated by supranational corporate trade and banking
institutions that are not accountable to democratic processes or national governments.
There are four developments, which have spurred the trend toward globalization. These are:
1. Improved transportation and communication technologies;
2. Opened financial systems;
3. Increased demand for imports; and
4. Reduced import quotas and other trade barriers.
When a firm sets up facilities abroad it involve some added complexities in its operation. Global
markets impose new standards on quality and time. Managers should not think about domestic
markets first and then global markets later, rather it could be think globally and act locally. Also,
they must have a good understanding of their competitors. Some other important challenges of
managing multinational operations include other languages and customs, different management
style, unfamiliar laws and regulations, and different costs.
Managing global operations would focus on the following key issues:
 To acquire and properly utilize the following concepts and those related to global
operations, supply chain, logistics, etc.
 To associate global historical events to key drivers in global operations from different
perspectives.
 To develop criteria for conceptualization and evaluation of different global operations.
 To associate success and failure cases of global operations to political, social, economical
and technological environments.
 To envision trends in global operations.
 To develop an understanding of the world vision regardless of their country of origin,
residence or studies in a respectful way of perspectives of people from different races,
studies, preferences, religion, politic affiliation, place of origin, etc.
Exercise :Critically discuss the reasons that lead the organisations to outsource products
and/or services and give at least one representative example for each reason. Many
companies are ‘contracting out’ their logistics activities or their IT systems to third parties.
Outline the arguments for and against this approach. Is it always appropriate to contract
out?

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