BUSINESS COMMUNICATION (PART - 31) ADAPTION TO THE GLOBAL BUSINESS

1. INTRODUCTION
Hello students Welcome to the series of business communication. Today we are going to study The adoption to the global business. In this we are going to cover The global business practices The strategies to adjust with global practices The basic aspects of the multinational companies How they operate in global in global markets Their environments Basic socio-political system governing those practices The impact of IT and the labor forces on this market. In words of Jack Welch, Globalization has changed into a company that searches the world not just to sell or to source but to find intellectual capital, the worlds best talents and greatest ideas. Globalization is a very big which is impacting the business practices which has shaped the communication to the new detail, the communication is also by the strategies and the policies and the international laws which govern the businesses. Strategy -How businesses take place are determinant or take shape according to the design of the strategy, strategy is design in such a way so as to create new markets, spot new products and to elaborate the business diversifications to the new market. The international growth in todays era is important because we are in the Era of globalization where the interconnected world is happening a new way of civilization Through the internet and technology we have reached to the millions of the people
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 The growth is through acquisition, mergers, and joint ventures much issue which impact the world processes. The factors impacting the global business practices. The basic factors are: Political Social Economical technological Political Factors Now the political force is the biggest force. Before starting a business you definitely have to understand the political philosophy of a particular country. The political doctrine is important because this Gives the stability to the business The basic ethics or the subsidiaries or the basic structure to the shape is given by the policy of government Any kind of political instability or terrorism or war like situation will put a negative impact on the businesses, so countries like Iran, Iraq or the American countries which are genuinely in the cold war era do think before they operate their offices over there. Economical Factors The economic factors are important because it is very essential to study tax system legal systems monetary policies fiscal policies commodity prices basic stock prices available over there Maturity of the financial markets available in a particular country and the exchange rates. Exchange rates would determine the price of a commodity in domestic and a host market in a different way. Ethics of each country you can go for multilateral agreements or multilateral trade relationships.

Social Factors Social factors are important because business exists into a social context, which are designed by values Norms Practices Languages Cultural Religion. Any product which puts a positive impact on the host population of the local design of the culture is accepted by the people, so any global company also has to take into consideration the local concepts. Technological Factors Technological factors do shape business to a very big stretch, the technological impacts that availability of the bandwidth in a particular country ownership of the PC impact of IT education over there Kind of awareness is there. The compatibility of technology in the host country is essential to build up operating system in the foreign destination. Now this is all about the factors which shape the forces of globalization, globalization is the system of interconnected economies and countries working together into a single kind of a market system where the products and principles and the system and services merge together to give you better services with better options.

2. THE WORLDS MAJOR MARKETS

The worlds major market places and their clusters The world is divided into many parts: High income countries Upper middle income countries Low income middle countries Low income countries ( these are the developing countries )
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The total geographical clusters of the world are significantly: North American countries European countries Pacific Asian countries This power relationship which the world shares, now this power relationship has changed in the course of time. After the post-worldwar11 era, a new era of business and connectivity has been there. People have started realizing that the self-prosperity is dependent, if the other countries are helping you and supporting you. So came the NAFTA (North American free trade agreement), now according to this trade agreement, the trade barriers have been released or they have been eased out, the foreign investment and the trade balances, they have been fair for people so as to do business with connected countries. This kind of agreement or the NAFTA i.e. North American free trade agreement was done between Canada, Mexico and United States. The emergence of the European Unions- European countries came connected and they eased out their barriers visa and passport regulations travel became free currency became one Business became very easy because by this the suppliers and the stakeholders, the customers were connected by many countries put together. This made the business practices very easy and the cost of supply of goods reduces. This is the new era of ethics of doing businesses. The revolution which came into the business practices were the post liberalization era which changed the total concept of doing business The emergence of GATT (General agreement on tariff and trade) was a big kind of revolution, this was signed in which we has eased out the trade barriers and we reduced the tariffs and quota systems. the world trade organization which emerges in 1995 on 1st January, the WTO (World Trade Organization) came up so as to dictate fair
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practices to business world, so as to govern the policies of the multilateral relationship between various countries and to establish fair procedures, legal procedures in such a way that the businesses are shape by the best practices. The basic ethics which govern the international business and the globalization practices were through exports and imports. Exports- It is when you sell the goods in foreign countries. Imports-When you buy goods from foreign countries and sell in the host country. This basic relationship of trade in terms of export and import governs the balance of payment, if the balance of payment position is favorable, then the country is prosperous and the country is rich. If the balance of payment position is negative i.e. your imports are higher than the exports, then the foreign exchange is less and the country faces problem in terms of money requirements. Now the exchange rate of the country at a particular situation dictates the business rates. Suppose the foreign exchange rate or the value of currency is very high, so for this country it will be difficult to export because the cost of production of goods is very high, so this country restore on import of goods from cheaper market. But if exchange rate is low i.e. the currency is weaker, in that market the exports will be favored because you get higher prices and to import will be really difficult.

3. GOING GLOBAL
Going international- is a big way or it is an ethic which is done on the basis when you have Some business practices which do need better practices better diversification better markets better practices When you enter into a domestic market and you see new opportunities, you try to export things.

The first entry of going international is by establishing your branch offices in foreign countries or though outsourcing or off-sourcing. These are the basic practices or the first step to go international market, then either these business practices could be govern by exports you do, the import you do or you establish your international firms and office there. The basic agents who govern the market could be the supply agents or the dealers or the commission agents which are in the international market which dictate the supply chain. The strategic alliance or joint venture is a big way which business practices arrange because the cost of investment is very high and the technology transfer from two countries is difficult, so we form strategic alliance so as to reduce the cost of investment and have better practices through better technology. The FDI (foreign direct investment) is another way of opting businesses in foreign market, now lets see this diagram

this is the international involvement through globalization there is high involvement in foreign markets through Foreign Direct Investment strategic alliances Branch offices.
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 There is low involvement when you go for licensing and or for independent agents. The barriers to international trade still dictate the market because it is a difficult practice to go global or to go international, you have the socio cultural differences the economic difference the legal impact which governs the business practices People who are able to overcome these barriers are able to work in international markets and if the barriers could not be overcome, the practices can go wrong and you can enter into loses. Legal and political difference -generally relates to quota practices tariff system subsidies offered by various governments each country is different monetary and fiscal policies control of the ownership rights patent rights intellectual property rights Everything is different so the business practices have to study the various laws of the host country and the guest country. Most of the times the things became difficult because most of the practioners of the business form cartels were they control the supply and the prices of the goods. So may be the foreign prices are governed, not by government structure but they are governed by free market economics where most of the players come into the market and try to dictate their own prices according to the demand and the supply.

4. THE STRATEGY FOR GLOBALISATION

The strategy to become global, first of all Establish business in domestic aspect or must company in your own right. This company can go international by opening a branch office in foreign country and when the branch office is successful, it can become a multinational company.
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Multinational company the company manufacture designs and markets the products according to the various markets available in the international market, so the multinational company is a more complex business where many markets are connected, where many strategies, where many advertisement strategies and many distribution channels work on to sell the products. The advantage of multinational company is they try to differentiate their products in term of the local availability and work on cost ethics i.e. they buy from the market where goods are cheaper and sell into the market where goods are sold at higher prices. The TNCs (transnational companies) - which go into the markets and sell the same standardized products. International companies- are those companies who have the universal brand working all over the world, like you have the Sony or you have IBM companies, selling the same products at all markets and at all regions. Globalization - is a force where the national economies and the business systems are becoming interlinked in such a way that the basic diversification takes place at specific needs according to the needs of the business markets and the practices. The market economy has emerged in such a way that the socialism and capitalism forces have become weak. The economic independence has become important, the technological connectivity has become important, the dictation of market is not by patriotism profits, the cost governs the ethics, and the total market is like a neighborhood, you buy things at lower cost and work on price ethics.

Now the communication and the transportation cost which govern the global market are shown in this diagram.

Telecommunication which impacts the world market is the internet the satellite connectivity The wireless technology making the world like a global village. The optical fiber is also impacting the business practices.

The factors of production in the global market, here the factors of production A. labor B. energy C. land D. capital are become universally available for people The kind of legal barriers are decreasing, people can owned resources in any country and at any point according to the prices which they have. So globalization of market is not only to share an idea or a product, it is a transfer of knowledge, knowledge portals, it is kind of an agenda or a forum where you are not only sharing products but you are operating, strategy are also being shared, your process is synchronized and brand names are also working.
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The constraint of globalization forces -working into the international market where communication becomes difficult, we have shown you in this diagram, first is A. difference in the social cultures B. difference in national differences of the business systems C. Differences in consumer behavior and the protectionist countries which happen in the most global markets. The challenges -before the management to overcome these forces of globalization are: At entry level:-Managing people at multinational level with the work force diversity in terms of cultural and language is becoming a very serious issue, locating the activities available in particular market at local areas which has to be studied and researched upon, the globalization, standardization and customization has to be done in such a way that it synchronizes with the local need. Now the global standardization strategies which dictate the market, they are 1. global standard strategies 2. Customization strategies. Standardized strategies -it is like treating the world market as one big market. The way of process and system become standardized but the localization strategies would design the product according to the climatic conditions and according to the taste, needs and the religious perception of the people into the host market. So once you have to enter into standardize procedure in terms of manufacturing, in term of quality, standards are important, international global strategies dictate those standards but in terms of selling things, you have to be very local in terms of understanding the micro aspects of the consumers. The e-commerce -is dictating the world market in a bigger way, how the cartels are connected or how the world markets are connected is through the e-commerce. You have three strategies 1) B2B (Business to Business)-Businesses are connected to suppliers, stakeholders and to the other people in the value chains.

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2) B2C (Business to Customer)-Retail shops and online shopping. 3) C2C (Consumer to Consumer)-Online kind of auctions which take place or you want to sell a house, the customer can post tender on the computer, on website and another client can meet him on the internet, so this is C2C. Global Capitalism- is a kind of free economy which is not just instantly happening, its becoming a big issue or big practices just because of technology, failures of socialism and the East Asia success. Now why East Asia success is important because here most of the cheap labor is resident, this 1. labor has been educated 2. labor has been connected 3. Labor has been used by world economy which is dominating the cost ethics of been business. So the total scenario of the business changes in terms of international ethics because now the outsourcing, the off shoring of business becomes easy. The International business has millions of customers joined together to the CRM processes, cheap labor markets. The markets are flooded with goods from various countries and various brands. The organizations have become more knowledge based i.e. its not only the physical assets are becoming important, knowledge in terms of knowhow is also becoming important i.e. the soft aspects of technology i.e. in terms of loyalty, attitude, commitment is also becoming asset which most of the organizations do value. The shape of the organization today is like they are well organized organizations self-disciplined organization full communication is existing they think globally and act locally they have lot of employees who are empowered So this is the biggest change happening into the organization which is crossing the boundaries of the national ethics and working in international markets connected by computers.

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The organizations are overcoming these types of barriers by being more 1. flattened in terms of hierarchy 2. decentralized 3. flexible in terms of the strategy 4. more empowered Empowered means that the employees are being more knowledge based and they have more technical knowhow because they are into kind of collaborative systems where they have put the values, the ethics, the knowledge, the services, the products together into a better combination. The global opportunity- which are connected with the world today are A. better work force diversity B. competitions in global markets C. better management D. better global delivery systems E. Better connectivity through the transaction cost. The emergence of digital firm has shaped the world markets in a better way. The digital firm is firm which has got digitally enabled employees and products sold online. The core business practices are synchronized with the world markets, you have the sensing techniques which are connected through computers, and you have seamless flow of information to the internet and the intranets. The Information is shared on the portal basis, so this is the role of information which governs different ethics in different markets. The global opportunities will make you in better positions and will also give you high operational excellence. They design new products and new services in the knowledge based economy. The customer and the suppliers are connected in better way, the improved decision making practices are the new ethics of the market. The competitive advantages and the survival have become easy for the firms because you have right combination of thing set at right place. The effectiveness, efficiency and the best practices are the result of the synchronization and the collaboration. The strategic objective of the total business systems is to have a competition, where the products are emerging with shorter and better life cycle products, you have to react to the turbulent market and come up with new design, strategies and new design products, and you have to expand the employee base.
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Global business challenges Global business challenges are beautifully displayed in this diagram, see these modules in this you have the A. Global IT business strategies B. Global business architecture C. Global information issues D. Global systems These are the total management areas which are governing the world markets. The IT strategy would be connectivity through the internet and intranet. The enterprise architecture is the emergence of virtual organizations which are only available on the physical spaces of the computers. The global information system is again the connectivity through the various internets and the global system development is like you had a collaborative process which synchronizes various markets. Now the business practices which are governing the world market, depends on the nature of the industry, it also depends on the competitive factors and when the environmental factors available in the particular economy, if these factors are favorable then only this system can emerge but then there are many business where these practices are not prevailing and the customers are depending on the local services and the local products. So the basic drivers for governing the businesses could be better because you have a market synchronized by the drivers. Drivers-Let see in this particular diagram.

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 the global customers wanting better products and better services because they are more knowledgeable aware educated, these are the urban markets, The global products- global products design and shape by international practices, better quality and better kind of technology. Global operations and resources is every country has a resource which is not available in other countries, so you have geocentrically, geographical conditions dictating the resources; the cost is differentiated because of the availability of a particular resource at a particular country. This results into global collaboration- Global collaborationist partnership were the connectivity in terms of resources is done so you have a better edge to do business, now the governance and the compliance is important, governance is a method or a system of government management to control the business practices, compliance is the act of confirming or it is the act of accountability, when you are in internet world, your accountability is important because if customers pay money and you are not able to comply the company will definitely loose an image or brand. Integrating the global system -is a big way and its a big dimension impacting the world markets, the global systems are important for your survival, they are revolution for the organization. The impact of these systems on the strategies is, here is the beautiful diagram where each dimension is projected into strategy integration of business is through technology business strategy which is the result of market evolution financial resources because of better financial forecast available into the market and better financial institutions prevailing into the market

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Infrastructure governed by the technological evolution, better is the technological advancement, better is the bandwidth, and better is the infrastructure connected. Human resources emerged or better transfer of human resources takes place because there is a knowledge transfer, the technically advanced people with many skills in terms of knowledge, technical abilities and in term of character are getting connected. Information systems because opportunities are available into the markets, you have processes but they are standardized, standardized is most of the business practices are done in such a way that they impact for the betterment of the total system. Organizations which are designed according to the culture and climate of the particular situation, then you have projects which are completed on priority basis, so this is the total system of the global markets where you have integration of strategies and systems to emerge into practice which dictates the global market in a better way. The international business is becoming easier but still, it is more complex because you are dealing with lot of diverse skills, diverse languages and diverse customers, the stakeholders are too diverse in many markets
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The 21stcentury organization trends are impacting the business in such a way that innovation is becoming important learning is becoming important knowledge transfer is becoming important Technology is becoming indispensable. Lets see this diagram in which the innovation passes the various phases to dictate the market practices

when you find a competitive edge into the market, assemble the innovation practices. reward the risk takers celebrate the diversity of the workforce available look around to the world also and mix practioner and developers together to design better products and better services, This is how we work into the world market because innovation dictates the world ethics in terms of new products, new services, and new technology. Sharing the customers from all over the world and millions getting connected on over computers but in this all aspects of governance and connectivity is designed by
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social responsibility corporate policy Corporate social responsibility. The ethics are important sustainability are important The total eco system of green revolution or of building the environment with better quality of awareness is also important. The business practices are designed in such a way that social issues related to women empowerment, child workforce is important that is we dont have to use children in our business practices and give them a better life. These are world ethics, values, integrated into systems to design a market which is virtually connected by people in terms of computers.

5. THE VIRTUALISATION IN THE GLOBAL WORLD

Virtualization is a new trend impacting the world markets. Virtualization is a frame work of dividing the resources of computer into multiple execution of environment, virtualization software allows multiple programs on a single machine and move programs from one computer to another computer, so this virtualization is most of the operations are taking online, the organizations are virtually getting connected because of the social networking. Lets see in this pyramid where social networking has given advantages to the organizations, you have

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A. passive search B. boomerangs C. Marketing networks. Now passive search is a search through computers of the employee and the people who have the best capabilities connected together, see like Google search is designing a Wikipedia where knowledge is required, so all the experts from all over the world who have knowledge can get connected, write and send they are paid electronically. So this is how passive search starts with people to look into the knowledge areas which are more specialized expertise areas and research based but the world is connected anywhere you are sitting you can connected. Boomerangs is an efforts or a strategy designed by the company in such a way that the websites try to search for the employee who have work for the company previously and want to return back, if they come back to the company, it will be at a lesser cost because the hiring cost is less and they are generally updated with all techniques of the markets.

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Networking is kind of connectivity where you are advertising products through social networking, the word of mouth publicity becomes very important for people to sell the products through networks The virtual trade is important because lets see in this diagram, you have the virtual organization in terms of the virtual market two primary types of virtual trends which governed the market are the Virtual worlds Virtual workforce.

We have shown you in this diagram, we have virtual organization put into this cup which has virtual workforce dictating and taking the connectivity from the worlds markets. Now the virtual workforce is a workforce who is working anywhere in the world at any situation whether it is rural or urban but any kind of technical aspects gets connected through the computers. This has impacted the businesses because it is more realistic in term because it is convenient and it has reduced the mobility of the people. It has catered to their personal life styles, it had designed the businesses with virtual communications to better strategies, it has personalized products, personalized work tailored schedules and have design products to customized each customer needs. You have multiple service options and you have minimum maintenance. So this is the kind of

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trends which are coming into the work markets designing the life style and the working styles of the people. Globalization kids are also dominant by the virtual nation, where the nations get interconnected through their policies and procedure also, each nation when come into bilateral agreement has to design a policy in such a way that it suits the policy structure of other nation, then one more country get connected it becomes multilateral. So you have virtual nations connected by the virtual effect of the computers. The corporate life is becoming more flexible because the people working into the companies are big assets. Any company which is valuable is valuable because their employees are important in terms of knowledge and technical know-how. Companies not only have physical assets, which added to the accountability of the company in their books value but the companies total assets value is also estimated by the knowledge of the employees. knowledgeable employees are important because we have to deal with the technology transfer global supply chains where you getting connected to the stakeholders also joint venture in terms of connectivity is becoming important free trade agreements which need to studied by legal practitioner Mergers and buyouts or takeovers where knowledgeable people work in a better option. Lets see this new world where the markets are connected, you have A. home country B. guest country

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Lets see this diagram how they are connected.

Cultural frame of the home country, the foreign country sender and the receiver these are connected by the ethnocentrism culture, false attributes, stereotype, etiquettes in terms of non-verbal behavior, time and place also impacts, the status and the power styles of the people impacts and the language impact the business practices. When you are working online or offline both these practices involve host market becomes important and a new the need for effective HR supportive is required because you have to train people in all these aspects, whether it is body language or it is the style or language in terms of oral communication.

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Lets see in this diagram where you have 1. on Y axis - the operational maturity 2. on X axis - the organizational maturity

The strategy develops into the skills for Marketing products services organizational design into resource management It enhances the shareholders value. So this diagram explain you how from each steps from strategy, how you get enhance shareholders value in terms of last output, so an important global strategic driver which helps to design a markets in a better way. The global market trends in terms of reality what is happening to the world markets organization in terms of connectivity are increasing the speed of change is impacting in a better way cost of transaction is reducing technology is impacting the interconnected markets are increasing the customer based demand is tailor made the new market creation in this diagram is shown because all the companies need to create and design products for different markets, you have the customer based today
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 the unexploited opportunity the unexploited markets It is important to create new markets

The leadership challenges -i.e. it changing into new economy, in the old economy it has incremental change where the leader has to deal with little changes. The new economy the constant and the radical changes happening in such a way that leaders definitely have more pressure to deal with this changes. The business concept of innovation design in such a way that the business models in terms of innovative practices have to be built in a better way, the adoption to the global business is a vast topic which requires immense skills on part of employees and on part of customer to get connected into a world which is designed and dictated by the global forces of liberalization and free trade. This free trade is boon to the Indian customers and to the foreign customers because you are getting better products Better services at cost which is much lower than the decades backs.

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The only cost which is impacting the economy is the energy cost otherwise most of the products have had a cost which is affordable by most of the customer not only in urban areas but into the rural markets. This is a magical world of global connectivity where the adoption of the business practices has paid life better for people. I hope the students must have understood the impact of the global strategies in terms of connectivity and how you can connect or adapt to the global business practices, thank you students.

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