Effects of Going Global

Effects of Going Global

Debra Elliott

University of Phoenix

Strategic Topics in Global Business Management/GBM/489

Dr. Joanne Nesbitt

March 29, 2009

Effects of Going Global

For an organization's global vision to be successful the unification between functional areas-human resources, marketing, production, financial, and information technology is critical. Although each functional area has a specific job or task, an alliance is essential before the organization can expand globally. Each group represented by a functional area identifies their own goals and objectives, levels of knowledge, and expertise along with culture. When communication is not clarified properly assumptions are mistaken, conflicts of goals and objectives lead to "nonalignment, costly delays, and failure to achieve desired outcomes" (2009, para. 2). Therefore, collaboration among "individual and teams from various functional areas, different business units ... are required to work together and align toward common goals and objectives" (Winer & Ray, 2009, para. 1).

Functional Areas

The implementation of strategic and functional goals is compulsory elements that require awareness within all functional areas. When unaware of how the organization's functional areas conduct business, not only does decision-making become moot, but also goals and objectives are mired. Each functional area is required to, not only work within specific business units, but also to work in cohesion with each other.

Human Resources

The functional strategy of human resources management (HRM) "aims to improve operational performance" (Bishnu & Fisher, 1997). Improvement is founded on component strategies such as rewards, diversity, performance, and development all working toward a common goal. The optimal HRM is capable of balancing an organization's environment both at home and abroad (Shenkar & Luo, 2004). Managers need to be integrated into a global network in which continued strategies are based on confidence in the ability of human resources functions to "screen, review and develop candidates" (Quelch & Bloom, 1999). The goal for global HRM is to make sure current assets are leveraged to the fullest extent by giving people the opportunity to advance. The purpose of strategies is to ensure the right talent, managerial mobility, and cultural mix work in synergy to manage effectively the operating units and growth opportunities.

Marketing

When penetrating a new market, challenges faced require alignment of strategic objectives within all functional area. For this to ensue, long-term initiatives are thought-out in advance. These new markets require "newness, cultural attractiveness ... make a product [or service] welcome in international markets" (Shenkar & Luo, 2004, p. 411, para. 1). Success is dependent on the skills used in marketing, such as selection of the right product market mix, correct assessment of the market potential, and external forces. Each of these components play a role in an organization's marketing endeavor.

Production

This functional area takes a global approach to foreign markets and production. The important factor is that operations can be in multiple countries. The strategies provide synergy among worldwide operations for the purpose of achieving common organizational goals in which they become one with the country where business is being conducted. Most important, is being able to look at countries that cooperate with each other that control the production, pricing, and sale of goods being globally traded.

Local outsourcing reduces foreign exchange risks and improves the relationship between local government and the organization. The production phase, in relation to costs of local materials and resources, affects the bottom line. Focus is on cost and efficient supply chains producing cost reduction. Both supply and value chains complement each other by enabling flows of products or services from one direction and transferring them to another. The difference is supply chains look at flow from the source to the customer in which value chain is just the opposite; the customer is the source of value and flows from the customer to the supplier.

Financial

Financial strategy assists in examining all strategies by identifying the best financial course to undertake within the scope of the functional areas. While incorporating all strategies, management focuses on establishing financial strategies, from forecasting and budgeting, credit and liquidity to capital investment and financial mix. As Locander and Goebel state, "integration of [a] strategy development processes ... reveals the complimentary nature that exists between the finance and marketing strategies" (1997, p. 30, 3.1 Financial Strategy, para. 1).

Initially, financial strategies are established