Globalization impacts American businesses and affects the nation’s ability to remain the leader of innovation and sustainable growth. Globalization creates a unified playing field that connects millions of users across the world to a wide array of products or services produced outside of the country. As such, it is a growing concern as companies outsource employment opportunities, capitalizing on the distress of third world nations. Business strategy changes as companies begin migrating their manufacturing facilities to poorer nations where labor is more cost effective.
With the onset of globalization, it is more important than ever for American companies to increase profits by creating a business strategy that lowers supply costs, uses employee feedback, reduces labor costs, and increases sustainability. American companies, such as Ford, prove that companies can, and will, prevail during times of economic uncertainty or distress. When motor companies were selling out to the government, Ford made significant revenue during the same period. A business strategy determines how an organization operates as a system and adapts to changing market demands.
Globalization has enabled traditional business strategy to capitalize on skilled labor in developing nations, who will often perform the work for much lower pay than Americans. Often, confidence and morale decreases as employees worry that their jobs will be outsourced for cheaper labor. The manufacturing industry is affected by globalization the most; however, as the number of skilled workers increase, companies may outsource higher paying jobs for a fraction of the cost. For unskilled employees working in factories, production quality decreases as their competence is questioned. Companies are exploiting underprivileged workers in third world nations, paying them pennies an hour without benefits. Companies do not consider the outsourced as employees, rather, they view them as replaceable assets.
Transportation and energy costs rise when jobs are outsourced, as companies revise their business strategy and produce items overseas. Customer service often declines as companies pay for their items to be shipped from a foreign warehouse to their U.S. office before being dispatched to the customer. Call centers, also affected by globalization, become flooded with clerks who do not speak fluent English. As energy use rises, domestic supply costs increase as more people compete for natural resources.
There are a variety of non-business related effects of globalization that are overlooked, such as the ability for diseases to spread rapidly, the expansion of world media and materialistic revolution, as well as the environment as corporations capitalize on other countries’ lenient protection policies. Most importantly, outsourcing leaves many hard-working Americans without jobs as companies focus their efforts on increasing revenue and profit building.
Use your business strategy to lower the amount of money the business spends on raw materials and supplies by engaging with vendors, managing inventories, and reducing transactional costs. Track when, where, and how your company orders products, streamlining the process to reduce human interaction, increase efficiency, and minimize the room for error. Consider utilizing automatic shipments, bulk discounts, and vendor incentive programs to save additional money. The less money spent on materials increases profit margins and eliminates the need for other cost cutting measures, such as layoffs.
Every idea is a good idea. Thus, a good business strategy utilizes employee feedback and suggestions to the fullest by listening to all employees. Implement suggestion boxes, hold open forums, and distribute feedback assessments to determine what the company can do to improve. Employees are at the forefront of the operation, and thus have added insight and personal experience with your customers or client base. Studies prove employee feedback saves companies over $5,000 per idea and connects the company with their employees. Utilizing nontraditional management practices, such as the Carrot principle, boost productivity by increasing workplace morale. Happy employees brighten the environment and improve customer satisfaction rates.
Use a business strategy to reduce labor costs without outsourcing the jobs to foreign countries. Boosting the overall mood in the workplace is the best way to ensure that employees are productive and satisfied. Consider reevaluating current management procedures to ensure employees feel connected to their superiors, as there is a shift to solutions-based collaboration. Employees need to feel that they are part of the solution, working with their coworkers to create positive change within the organization. Cut labor costs by improving retention rates, eliminating the need to hire new employees, which adds several thousand dollars in expenses. Hiring costs combined with training, relocation, and temporary costs reduce the bottom line.
While other companies may be polluting the environment in third world countries, optimize your business strategy to become a sustainable enterprise by engaging in ethical behavior through waste reduction, recycling, and responsible waste management. Reduce operating expenses by lowering electrical and energy costs, water consumption, and the amount of waste the office produces. Use recycled products, dispose of electronic waste responsibly, and decrease the amount of emissions your facility uses.
It is possible to come out ahead of the game by adjusting your business strategy as necessary, adapting to a changing market. The Internet has enabled consumers to choose from dozens of companies, so set your business apart from the crowd by providing them with a unique and personal experience they cannot find anywhere else. Distinguish your products and services from the competition by one-upping them in price, quality, and service. Reduce supply and labor costs to pass the savings onto the customer, who is more likely to do business with you if the price is right.
Very cool, and nice site by the way. The call center industry is taking in Billions now and they say by 2011 it will increase by another 15% thats staggering compared to any other industry, is it not?
I think that blaming outsourcing for the loss of jobs in the U.S. is like looking at one side of the coin. Not really the whole truth. The fact is that without outsourcing, many small businesses or startups won’t even live to their first month. The only threat I can see here with globalization is – innovation. What new services can you offer? Why would anyone want what you have to offer? Just my two cents.
SShah, thanks for the input! I see your point and understand both sides of the equation.
Totally legit.