Importance of Global Management

Importance of global management

Cultures vary from country to country. Business activities in different countries take place in the context of these cultural variations. Management approaches that are effective in one location may not be so in another. Hence, global management also assists international managers to understand and appreciate cultural differences and be able to interact effectively with others who may see the world in unexpected ways.

What is global business?

Besides, some of the key indicators of globalization of an industry are the extent of cross-border trade within the industry as a ratio of total worldwide production, the extent of cross-border investment as a ratio of total capital invested in that industry and the proportion of industry revenue accounted for by players competing in all major regions of the world.

Benefits of local

Dressmaking goods and services to local preferences improve the price distributed to local clients. As a result, a percentage of this improved value must translate into greater value realization for the company. Consider, for instance the case of Yahoo! portals in various countries. The more tailored the portal is to local market needs, the greater would be number of users and the amount of time they spend with Yahoo! These advantages can be monetized by Yahoo! directly in the form of higher advertising rates and merchant commissions accruing to the company from its various commercial partners. Thus, local adaptation helps to improve price realization.

Local adaptation concluding

As with many other aspects of global marketing, the necessary degree of local adaptation will usually shift over time. In many cases, the shifts tend toward less need for local adaptation. A variety of factors, such as the influence of global media, greater international travel and declining income disparities across countries, are paving the way toward increasing global standardization. We foresee a diminished need over time for geography based customization. Thus companies must recalibrate the need for local adaptation on an ongoing basis; over adaptation extracts a price just as surely as does under adaptation.

One straight inference of being present in numerous nations is that the corporation needs to react to the foreseeable heterogeneity it will happen in these marketplaces.