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How Globalization Affect The Labour Market Business Essay

how globalization affects business

Many years ago, many studies in favor of globalization have been committed due to its effects on business management. Nowadays, the influence of globalization is increasing. Globalization has affects on many areas. In this paper, I will focus on three areas which is labour market, human resource management, and service. Globalization influences the labour market somehow and somewhere. According to Gallin (2000), the emergence and development of a global labour market is "the most important social consequence of globalization." Moreover, globalization also affects human resource management. Adler and Ghader (1990) believe that international HRM has a close relation with the fact that a company enters into the international market (exports, representation, joint venture, whole-owned company). Globalization has not only positive effects but also negative effects on service. On the positive side, globalization forces down the price of services in high cost locales, increases output and improves service quality. On the negative side, there is the dislocation from increased competition as uncompetitive firms lose market share and their employees are laid off ( Hufbauer and Warren, 1999).

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Though this paper, I will provide data to exam how globalization affect the labour market, human resource management, and service. Identifying what are the positive effects and negative effects. Finding out what challenges we are facing and what strategic should we use.


My study is about what is the impact of globalization between leadership and business performance. The globalization will bring some impact and influence the leader when the leader is managing or leading the organization. Therefore those impacts will affect the business performance will be better or worse. First, globalization always makes the organization's management performance become better if the management manage the organization in the right way. Many organizations choose to globalization must have their reasons and those reasons are more advantages then disadvantages. So, it means that the globalization always will influence the management performance. Second, the leadership is also a key that will affect the management performance too. The leadership is leading the organization and it is a factor that decides the organization will be managed better or not. Third, the effect of the globalization will be moderated by leader and it will result in management performance. It is because the leader will overcome all the problem that brought by globalization and it also the responsibility of the leader.


Introductions to Globalization

Nowadays, many of firms choose to globalization because by globalization they can expand their business and earn more profit. At first, what is globalization? Globalization is a multi-dimensional and multi-directional process especially in work organization, ecology, communications technology, culture and

all implicated in the transformation of sovereign nations by global actors with varying levels of power, identities, networks and orientations (Beck, 2000).Globalization is the engine that is currently pushing many industries and organization to go global so as to achieve competitive advantages. (Philip R. 2002) Besides that, Food and Agriculture Organisation (2003) also define that globalization is "ongoing process of rapid global economic integration facilitated by lower transaction costs and lower barriers to movement in capital and goods".

Globalisation is essentially an outcome of the build up of enormous pressure on the part of the corporations and banks and their international agencies to get rid of these barriers so that they can gain better access to the many fields of activity previously blocked to them. It is likely that globalisation is clearing the way to another boom in the next few years, because it is getting rid of much of the regulation previously restricting corporate access to profitable business opportunities. If so the possibility that limits issues will be attended to will remain low for some time (Ted Trainer, 1993).

Globalisation as a model of fully integrated international markets was defined by Henderson (1999) as those meeting two conditions: (1) free movement of goods, services, labour and capital: thus a single market of inputs and outputs; and (2) full national treatment for foreign investors i.e. there are no foreigners.

Challenges of Globalization

Globalization of Western countries can cause more problems and crisis for the developing countries, if these countries are not able to compete or cooperate with developed countries. The existing economic blocs in Europe and USA, Asia etc. create a more unbalanced economic situation which may increase the tension between the south and the north. These blocs would have an extremely prominent and powerful position as guides and advisers in Arab countries (Mosad Zineldin, 2002)

A customer connection is also one of the challengers in globalization. In the globalization, managers will have to very good in the full array of customer connections owned and managed by the firm. There activities are including sales, service, solutions, branding, and other areas that touching customers. Due to the globalization, there will be more customer connections. This is because globalization leads to a wide area growth in income and redistribution in emerging economies (Slywotzky A, Baumgartner P, Alberts L & Moukanas H, 2006).

The Advantages and Disadvantages of Globalization

Apart from the challenges of globalization, globalization itself also brings some advantages and disadvantages. Globalization will tend to make strong business designs stronger (through global sourcing, selling, and science). It will make weak business designs weaker (through more competition, reduced differentiation, and a greater disconnect from customers). And it will create more no-profit zones for companies and even entire industries (Slywotzky A, Baumgartner P, Alberts L & Moukanas H, 2006).

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