Globalization has brought greater challenges, economic ills domestically, and bigger opportunities internationally.
With this phenomena (globalization , that is), on the one hand, our workforce are no longer vying for work and professional advancement against their peers locally, but instead against those of the offshore offices or branches.
Anytime, management can relocate any of these personnel whenever a particular operation requires for a more competent personnel that is not otherwise immediately available within. For some, this is a threat. For others, for the more adventurous or ambitious employee, this a good opportunity to work abroad as an expat. Who would blame them, the compensation, perks and benefits are much desirable. In fact, when I had the opportunity to be relocated in Tokyo, they doubled what I am regularly receiving on top of the relocation allowances.
While on the other hand, globalization
wrought financial ills to our domestic economy. Revenues and duties were being enjoyed by the host country and draining us of talents and sometimes, valuable technology as well. Not only that, this has also spur a lot of companies to open merger initiatives which more often at the expense of displaced employees. Further:
Pardon me if I spoke here in 'generalities' (according to his critiques, I disagreed otherwise) as Sen. Obama have in his inspiring acceptance speech (okay, that is entirely a different story). Globalization is a very broad subject, and my attempt here (if I indeed succeeded) is merely touching the tip of the iceberg
. Anyhow, thank you for bearing with me.
Now, where are we headed? What do think? Have your say please.
With this phenomena (globalization , that is), on the one hand, our workforce are no longer vying for work and professional advancement against their peers locally, but instead against those of the offshore offices or branches.
Anytime, management can relocate any of these personnel whenever a particular operation requires for a more competent personnel that is not otherwise immediately available within. For some, this is a threat. For others, for the more adventurous or ambitious employee, this a good opportunity to work abroad as an expat. Who would blame them, the compensation, perks and benefits are much desirable. In fact, when I had the opportunity to be relocated in Tokyo, they doubled what I am regularly receiving on top of the relocation allowances.While on the other hand, globalization
wrought financial ills to our domestic economy. Revenues and duties were being enjoyed by the host country and draining us of talents and sometimes, valuable technology as well. Not only that, this has also spur a lot of companies to open merger initiatives which more often at the expense of displaced employees. Further:It seems to have become accepted wisdom that it’s good to become bigger in a globalizing economy. Recent mergers such as Exxon and Mobil, BP and Amoco, Daimler-Benz and Chrysler, and event the failed attempt to merge GE and Honeywell were based on the logic that globalization will result in industries becoming more concentrated. The big winners will be the big companies, so the lesson is to get big fast, and global megamergers such as those noted are the quickest way to do so.The above may be a little outdated, but those observations still reverberate today, after 8 years, and may hold true beyond. The employees affected are the real shareholders who do not get ‘value’ in this kind of development. One of my commentators, Mikey of Shift Workers Unite, in this blog is quite straightforward in his critique about this kind business actions:
However, recent work seems to question the value of these megamergers. In addition to all the obstacles that face any merger, the logic itself may be flawed. First, evidence does not lead to the conclusion that industries are becoming more concentrated. In fact, industries such as oil and automobiles, those characterized by huge mergers, have become significantly less concentrated over the past 50 years. Second, industry concentration can actually destroy value rather than create it. Value can be created if the mergers reduce production costs, reduce risk, or increase volume, but these goals are seldom attained n any way that offsets the costs of the mergers.
Interestingly, one reason that these global megamergers have increased has a significant human resource component. As shareholders require top-line (revenue) growth 10-15 percent per year, firms in industries seeing only 2-3 percent growth can achieve growth only through mergers and acquisitions. When virtually all the organizational rewards (bonuses, promotions, stock option values, and so on) are tied to revenue growth, it is not surprising that top managers will engage in such activity, even though it may not create true value for shareholders.
SOURCE: P. Ghemawat and F. Ghadar, “The Dubious Logic of Global Megamergers,” Harvard Business Review, July-August 2000.
“I really think offshoring and outsourcing are bad ideas for American industry. The more jobs and industry that the US loses to other countries, the more our economy suffers.Although he refers directly about offshoring and outsourcing, this critique / comment has a lot of bearings on mergers. Anyway, all of these were offshoots of globalization.
Corporations will argue that they are merely trying to be efficient. The term 'greed' should have been used instead. I'm wondering how these corporations plan to make a profit in the US, when Americans no longer have jobs and can't afford to buy their products. These guys are outsourcing themselves right out of business in the long run.”
Pardon me if I spoke here in 'generalities' (according to his critiques, I disagreed otherwise) as Sen. Obama have in his inspiring acceptance speech (okay, that is entirely a different story). Globalization is a very broad subject, and my attempt here (if I indeed succeeded) is merely touching the tip of the iceberg
. Anyhow, thank you for bearing with me.Now, where are we headed? What do think? Have your say please.
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About the Author
Nor Franco is the Managing Director and Virtual CEO of nextManager.net. He's a former corporate executive whose passion is bringing out the full potential of HR in Businesses. This time that passion is pursued through Virtual Management. He writes and blogs about his management views and insights here. Follow him on Twitter.
