Globalization and Outsourcing

Globalization and Outsourcing

Globalization is a phenomenon that has swept across most sectors of the globe leaving firms to adjust to the changes that are occurring. The rise of competition Is one example of an aspect that has emerged within the twenty-first century, especially due to a dissolution in trade barrier that marked numerous markets as impenetrable. With globalization escalating gradually, businesses have gained an exposure opportunity to learn more as well as share tips on better ways of approaching futuristic growth. The following report will expound on globalization as a phenomenon, as well as its associated impacts within the modern day era. 

From an entrepreneurship perspective, the duties and functions that defined the modern-day capitalist or businessperson, have significantly complicated with time. Ideally, the 21st century, unlike its predecessors, has been defined by a revolutionary economic, educational, political, and social landscapes, elements that have emerged as a result of globalization.

Interestingly, the emergence of the phenomenon has transformed the manner in which man does business, given that it has erased the limitations that were nurtured by geographical borders as well as trade barriers, an aspect that has resulted in man embracing new synergies that will offer him or her competitive advantage over other similar players in the same market niche. The following report will further expand on wise investment moves as well as tactics such as outsourcing and offshoring that managers can apply to realize a wider economy of scale as well as achieve a greater competitive advantage. By utilizing the Case study of Telstra Call center services Outsourcing and offshoring, this report will expound on the impact, opportunities, as well as challenges, Globalization, and its associated strategies, have imposed on business operations especially on the global scale.

The World as we know it is currently evolving at unprecedented levels, an aspect that is reconfiguring and transforming the manner in which business, as well as trade, is conducted. As a result of the rampant transformation, goods and services have become easily accessible for most people across diverse regions of the globe. In addition to this, the international business community has continuously expanded as a result of favorable influences that have been nurtured by the economic reconfiguration and transformation. But, what is all this economic reconfiguration and transformation? The 21st century, unlike its predecessors, has been defined by a revolutionary economic, educational, political, and social landscapes, elements that have emerged as a result of globalization. The emergence of globalization as a phenomenon has transformed the manner in which man does business, given that it has erased the limitations that were nurtured by geographical borders as well as trade barriers (Beck, U. 2018, P. 35).

From an entrepreneurship perspective, the duties and functions that defined the modern-day capitalist or businessperson, have significantly complicated with time. Why and How? With factors such as competition escalating as a result of the globalization aspect, most entrepreneurs have embarked on redefining the rules of trade and business engagement provoked by the need to craft and embrace new synergies that will offer them competitive advantage over other similar players in the same market niche (Hay, C. and Marsh, D. eds. 2016, p. 52). As a result of the shift in momentum, it is crucial to note that today’s economic environment has shifted its dependency from the public sector to the public sector, given that the later has emerged to be the global powerhouse, while the former segment has continuously shrunk in size, cumulatively losing its prior influence and relevance in the economy setting.

Globalization and Expansion

In spite of Globalization nurturing numerous advantages from an economic growth perspective, it is crucial to note that the phenomenon has also escalated the rate of competition present across all trade sectors. The given aspect has manifested as a result of numerous entities across diverse regions entering the market, with each unit producing a similar commodity, to an already existing product. The escalation of competition has provoked most organizations to invest heavily in expanding their operations onto a global scale, efforts that have emerged based on the need to grow and expand the market niche that each organization claims and controls (Beck, U. 2018, P. 27). As an approach, the expansion to international markets has provided firms with an opening to increase their returns, realize other potential economic opportunities, as well as improve their image perception and brand loyalty. Although there are also challenges associated with the entry into foreign markets, the manner in which a venture tackles the emerging challenges significantly determines its survival chance in the new territory.

Outsourcing and Offshoring

Outsourcing is a strategy that has been employed by numerous institutions, which have pursued the global expansion route, based on its cost-cutting approach. When entering new markets, firms have always been primarily challenged by their ability to adopt, embrace, and conform to new customs, cultures as well as language that define the new market (Solli-Sæther, H. and Gottschalk, P. 2015, p.90).

Outsourcing as a platform provides a solution to such challenges among others, by utilizing the local manpower within the new economic niche as the organization’s workforce. The following report will expound on globalization and its impact on today’s businesses as its foremost agenda. Furthermore, this paper elucidates on tactics that managers pursuing expansion into the international market should observe if they wish to remain ahead of the game. In the second segment, the publication will analyze outsourcing and offshoring, coupled with their contribution to globalization, based on an Australian firm Case study.

Globalization and Today’s International Managers

Globalization as a concept is not new as one may perceive it to be, given that the concept has existed for centuries, only evolving with time to its present state. By definition, Globalization is a term that refers to the gradual but global integration of the numerous states economies, through the production of goods and services, trade escalation, as well as investment flows (Hay, C. and Marsh, D. eds. 2016, p. 11). From a phenomenon perspective, globalization emerged as a result of the global outreach fever that swept most nations, transgressing through each of the states military economic, trade and geopolitical niches. The cumulative impact of the global outreach manifested in the erosion of national economic borders, an element that embraced the emergence and growth of integrated international economies.

From a profile perspective, globalization has been defined by; the emergence of global corporations, robust internalization of production related economic activities, growth in the level of specialization, and escalating disaggregation of production. How has this been possible? Globalization as a phenomenon has consistently relied on policy changes as well as technological growth as catalyst platforms (Teece, D. Peteraf, M. and Leih, S. 2016, p. 19).

From a policy perspective, the creation and amendment of numerous trade policies has resulted in the dissolution of trade tariffs and barriers, an element that has opened up and exposed the local markets to international products, while also local products from different nations have been able to trade on the global market platform (Beck, U. 2018, P. 42). Evidently, nations such as Australia, China, and Dubai, all of which opened up their markets to trade and embraced international brands, have gained immensely from Globalization, an aspect that is visible in each state’s current market situation. 

Technology as the second catalyst factor propelled the evolution of globalization to what it is today. How So? As a result of its rampant evolution, technology has been integrated into man’s life as a crucial platform in his civilization. The emergence of a technology-based lifestyle, shifted the manner in which consumers’ access, shop, and order for their products, as well as the strategy in which manufacturers, industrialists, and producers advertise, retail, and distribute their products (Hay, C. and Marsh, D. eds. 2016, p. 52). Given that the dependency on technology is still expected to escalate with time, the business world has realized of its importance in globalization and the influence it imposes in the productivity, of goods and services as well as the consumption of the products.

Impact of Globalization: A Business Perspective

Globalization as an economic exposure platform has brought along with numerous advantages as well as implications both from the producer as well as consumer’s perspectives. When focusing on the producer side, which primarily made up of entrepreneurial organizations within the private sector, it is crucial to note that globalization has exposed the sector to competition, fluctuation in prices, as well as the substandard quality of products (Kraidy, M. 2017, p. 31). The following segment will offer an in-depth view of Globalization from a business perspective.

It is crucial to note that from the consumer’s end, globalization has been perceived to bear numerous benefits over time. However, that may not be necessarily the case when the aspect is perceived from a business perspective. The increased exposure of markets has also escalated the vulnerability of ventures both in local and international economies to a myriad of unforeseen risks, aspects that will be expounded on below.

Globalization and Outsourcing Dissertation
Globalization and Outsourcing Dissertation

Intense Competition

Competition as the first impact of globalization emerges from the opening up of local markets as well as the integration of economies. It is crucial to note that exportation and importation, as well as outsourcing of product and services are crucial aspects of globalization. Unfortunately, the given elements have created an influx of substitute commodities to most products in diverse markets (Donati, P. 2017, p. 15). The cited aspect which has emerged as the entry of new players into the market culminated in the escalation of competition between existing firms and the new entrants. Cumulatively, although the approach has compelled previously existing firms to improve their quality of products and services, it is unfortunate to note that the cost of competition has been overwhelming for firms in markets that are defined by numerous players.

Price Fluctuations

Fluctuation of prices as the second impact of globalization is highly associated with competition and market saturation. It is crucial to note that although globalization opened up local and international markets, the platform also led to the saturation of various markets that were already defined by a presence of numerous existing local players. Most of the international entrants into local markets were able to supply the consumers with alternative or substitute commodities, to local options at a lower price and even a better quality (Teece, D. Peteraf, M. and Leih, S. 2016, p. 27). Case in point, China’s products are renowned for their cheap price, although inconsistent quality. The given aspect nurtures price fluctuation of commodities because local producers will always be compelled to adjust their prices in a bid to compete with foreign producers, and the cost of their commodities, an aspect that culminates in the unsteady prices of goods.

Substandard Quality of Goods

The quality of a product as well as the brand it has crafted for itself, are aspects that significantly shape customer loyalty and satisfaction. Globalization as a phenomenon has compelled most firms operating in the international platform to outsource their products to developing nations, in a bid to realize a wider competitive advantage, margin when compared to other firms operating in the same niche (Kraidy, M. 2017, p. 22).

The downside of outsourcing is that for most organizations, the ability to observe a given set of quality standards becomes impossible especially when the firm focuses on offering services, or manufactured goods. Cumulatively, although globalization is inevitable, its impacts can be positive as well as be overwhelming for organizations without adequate control structures. The following segment will expound on strategies that international managers can adopt in a bid to remain afloat if not advance in the face of stiff and harsh globalization-induced changes.

Today’s International Managers: Winning tips amidst fierce competition

Drawing from the above analysis of globalization, it is evident that the phenomenon has significantly reshaped the manner in which organizations functions, and conduct business, especially within the international market platform. In spite of the prevalent changes, there are several tactics that wise international managers can utilize to continuously attain growth in returns, and market share. In addition to this, the tactics will enable an organization to establish a reputable image that retains a wide base of loyal customers.

Globalization, Identifying and analyzing the existing and potential Competition

For an organization to stay ahead of its competitors within any market niche, the firm should be aware of the existing threats, an aspect that can only be realized by conducting a thorough competitor’s analysis. It is crucial to note that any industry with new players and startups joining every day is considered to aggressively active, and as such, any firm operating within such a niche should consistently update its analysis in a periodical manner (McLean, M. 2018, p. 35). When analyzing the potential threats, it is crucial to identify the primary and secondary competitors as well as the level of threat each player imposes on your particular firm. By doing so, a manager can analyze the strengths and weaknesses of potential and existing competitors, in addition to making strategic moves that will consistently position the organization ahead of the competition. 

Assessing and Understanding the Target Market

In any business competition, it is crucial to note that the clients or consumers always represent the judges, as their choice embodies their final opinion about their desired product. In any market niche, a wise international manager will always assess the audience, its expectation, and needs, as well as demands. It is crucial to note that consumer behaviors keep on changing depending on the influence of macro factors such as economic conditions (McLean, M. 2018, p. 54). In such an instance, an astute director establishes constant communication with the organization’s existing and prospective clients, as an approach to remain informed and update on consumer concern, predictions as well as desires. By doing so, a firm can adjust its product pricing, market strategies, product packaging, and promotional campaigns in a manner that will attract potential clients and retain the existing ones.

Outsourcing and Offshoring, Telstra Case study

Outsourcing, when defined, refers to the process whereby a firm subcontracts the organization’s tasks and mandates to various external organizations that have specialized in providing the desired service. In other cases, outsourcing also involves a practice whereby an organization acquires a smaller firm with adequate resources and employees to run its tasks. Cumulatively, outsourcing revolves around the breaking down of a given function, and it’s subsequent assigning to third parties (Oshri, I. Kotlarsky, J. and Willcocks, L. 2015, p. 15).

Offshoring, on the other hand, refers to the purposeful relocation of a specific or cumulative business procedure to another new location, such as a country. A good example of offshoring would be when an industrial firm physically relocates its manufacturing process to a new state. The main difference between offshoring and outsourcing is that the former focuses on establishing an operation in a new state as a result of repositioning, while the latter primarily refers to the subcontracting of a firms’ task or duty to a third party which in most cases is usually an external organization (Solli-Sæther, H. and Gottschalk, P. 2015, p.90).

 The fierce aspect of globalization has compelled firms’ overtime to search for innovative and alternative approaches to getting the work done efficiently. Outsourcing and Offshoring have emerged to be promising alternatives means of meeting the production needs of any company. By employing the two approaches, numerous international firms have been able to regulate and cut down operational costs, free up internal resources to support other crucial sectors, and streamline time-consuming functions (Oshri, I. Kotlarsky, J. and Willcocks, L. 2015, p. 48). 

Telstra Outsourcing

Telstra within Australia is presently recognized as the largest media and Telecommunications Company, offering services that include; operating telecommunication network, as well as a vast range of entertainment and communication product and services. As a firm, Telstra prides its purpose to be creating a brilliant and connected future for everyone, a vision it has managed to achieve over time through the expansion of its products and services towards the international telecommunications market.

Expanding into the international market is a move that Telstra implemented provoked by the need to grow the company’s portfolio onto the next level, in addition to embracing the global market platform (CX Central. 2018b, p1). In its expansion operations, the firm has gradually relied on outsourcing and offshoring as approaches to realize its economies of scale and competitive advantage over other players present in the telecommunications industry. One particular and crucial department that the firm has constantly outsourced and offshored to India, Manila, and Perth is its call center operations (CX Central. 2018, p1).

Essentially, under the firm’s international operations plan, Call centers are usually overwhelming departments that are defined by large volumes of low severity type of work. If the firm was to house most of call center operations within its main headquarters back in Australia, evidently quite extensive resources would be committed to the department, to the extent of overwhelming significance performance targets of the institution. Thus by outsourcing and offshoring call center services, the firm is primarily able to focus its resources on dealing with challenging and more severe issues affecting its product portfolio, brand depiction, and customer market base (CX Central. 2018, p1).

Challenges of Outsourcing and Offshoring

Two of the major challenges that Telstra has realized in its international expansion conquest, are cultural and language barriers. As a telecommunication firm, Telstra is constantly in touch with its customer base compelled by the need to introduce and sell new products, as well as offer supportive services (CX Central. 2018b, p1). Given that the firm opts to outsource and offshore its call center operations, most of its customer base across the western world have been complaining of an ineffective call center support base, as in most situations their needs and demands have often been unmet (CX Central. 2018b, p1).

One good example was a recent scenario, where an American customer received poor call center support services that were perceived to be abusive and culturally insensitive, especially after the firm had withdrawn its support for same-sex relationships (CX Central. 2018, p1). It is unfortunate to note that the given aspect resulted from a conflict in cultural and linguistic customs between the firm’s support staff and a worried client, an aspect that could have been deterred if the firm offered locally based call support from America or Australia.

Globalization, Outsourcing and Offshoring Opportunities

From an opportunity perspective, Telstra was able to run its call center support services at a lower cost especially given that the standard labor wage of employees in most of the countries that the firm outsourced its operations are way below what Telstra was offering its initial employees. Additionally, the firm, thanks to outsourcing and offshoring was able to free up more resources back at home and commit them to more severe and demanding issues associated with the firm’s growth and future projections.

In conclusion, it is evident that Globalization is a phenomenon that is here to stay. More so, firm’s that do not embrace this occurrence will gradually become outdated in our ever-changing and first paced world. As economies integrate, there is a crucial need for managers to begin “thinking out of their market niche, and across the globe.” Customer preferences change from time to time, and with that being a significant determining factor of choice, firms should consistently lay down moves that will secure more potential customers besides retaining the existing ones. Additionally, with competition emerging to be a significant defining factor of today’s markets, there is a pressing need for firms to adopt positive elements of outsourcing and offshoring, besides other competition analysis schemes, all in a bid to remain ahead of the curve that is a saturated market full of numerous existing and emerging start-up players. 

References

Beck, U., 2018. What is globalization?. John Wiley & Sons.

CX Central. 2018. Telstra call centre staff in Perth have language problems – CEO | CX Central.

CX Central. 2018b. Telstra’s offshore call centre has a cultural alignment shocker– CEO | CX Central.

Donati, P., 2017. Globalization of Markets, Distant Harms and the Need for a Relational Ethics. Rivista internazionale di scienze sociali, 1(1), pp.13-42.

McLean, M., 2018. Understanding your economy: Using analysis to guide local strategic planning. Routledge.

Oshri, I., Kotlarsky, J. and Willcocks, L.P., 2015. The Handbook of Global Outsourcing and Offshoring 3rd Edition. Springer.

Solli-Sæther, H. and Gottschalk, P., 2015. Stages-of-growth in outsourcing, offshoring and backsourcing: Back to the future? Journal of Computer Information Systems, 55(2), pp.88-94.

Teece, D., Peteraf, M. and Leih, S., 2016. Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), pp.13-35.

Kraidy, M., 2017. Hybridity, or the cultural logic of globalization. Temple University Press.

Hay, C. and Marsh, D. eds., 2016. Demystifying globalization. Springer.

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Leadership Strategies for Improving Performance

Dissertation Title: Leadership Strategies for Improving Performance of SMEs in Saudi Arabia

Despite governmental support, healthy international trade and application of varied leadership styles, small and medium businesses in Saudi Arabia continue to struggle and are unable to sustain their operations. One of the factors that contribute to the decline of such firms is poor management. The study adopted the use of both quantitative as well as qualitative approaches in exploring the leadership strategies for improving the performance of small and medium enterprises in Saudi Arabia.

It uses surveys as well as secondary sources from various literatures to determine the leadership strategies that successful businesses in the Saudi Arabia have used to survive, especially during the tough financial times. The conceptual framework that is used in investigating the particular leadership strategies is the transformational leadership theory.

The theory has four tenets, which comprise of idealized influenced, individualized consideration, intellectual stimulation, and inspirational motivation. This research makes use of all these to determine particular ways of enhancing the profitability hence sustenance of the small and medium enterprise in the country. The intention of the study is to recommend the best leadership practices for small and medium enterprises.

The general objective of the study is to do a comprehensive study on Leadership Strategies for Improving the Performance of Small Businesses in Saudi Arabia. There exist various leadership strategies that when implemented have the potential of shifting fundamentally the organizational dynamics as well as the various strategic approaches to managing critical functions of small and medium businesses. The research will be guided by the following research questions:

  • How can leadership strategies be a tactical tool for enhancing success in the organization?
  • What are the leadership strategies that enhance the achievement of strategic business objectives?
  • What is the impact of strategic leadership on strategic development of SMEs in Saudi Arabia?
  • How do leaders drive organizational innovativeness as a strategy to implement change in the small businesses in Saudi Arabia?
  • How does ethical leadership influence the success of small businesses in Saudi Arabia?
Leadership Strategies Dissertation
Leadership Strategies Dissertation

Leadership Strategies Dissertation Contents

1 – Introduction
Context of SMEs
Background of the Study
Key SME Enablers in Saudi Arabia
Definition of SME
Strategic Management
Problem Statement
Objectives of Study
Research Questions
Importance of the Study
Limitations of the Study

2 – Literature Review
Organizational Innovativeness as a component of Leadership
Leadership versus Management
Strategic Leadership
Effective Strategy Implementation
Ethical Leadership
Theoretical Framework
Great Man Theory
Trait Theory
Contingency Theory (Situational)
Style and Behavior Theory
Skills and Characteristics of Strategic Leaders
Strategic Management Paradigm in Small Businesses in Saudi Arabia
Proposed Research Framework

3 – Research Methodology
Leadership Perceptions of small businesses in Saudi Arabia
Research Design
Case Study Research
Data Collection Method and Period of Study
Sample Population
Data Analysis

4 – Presentation of Findings
Gender
Measure of Age Central Tendency
Education Level
Years of Experience in Business
Area of Work
Strategic Leadership Skills key to SMEs
Commitment of Entrepreneurs
The effectiveness of Monshaat Support Center
Tactical Significance of Business Strategies
Significance on Monshaat to Strategy Development
Technology as an Essential Component of Growth
Influence of Ethical Leadership
Innovativeness
Inferential Analysis
ANOVA Model Summary
Testing the Relationship between Response and the Explanatory Variables

5 – Analysis of Findings and Discussions

6 – Research Discussions
Strategic Leadership Framework in SMEs
Monshaat Support Center
Organizational Innovativeness
Information Technology Capability
Presence of Monshaat Support Center
Effective Strategy Implementation
Ethical Leadership as a Strategic Tool for Growth

7 – Recommendations and Conclusion
Recommendations
Conclusion

References

Appendix
Survey Questions

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Globalisation Patterns of Consumption

Globalisation and Diversified International Patterns of Consumption

Title: With the evolution of human communication and transportation modes over decades and centuries, this world is squeezing smaller and smaller day by day in terms of interaction among people of different regions, ethnicity, races, and obviously different mind-sets. This changing characteristic of the world is perceived as the globalisation and the world is seemed to be a global village. The globalisation of this world has changed certain patterns of its villagers in terms of their thoughts, lifestyle, communication, buying and selling trends, and also their patterns of consuming the goods and commodities. The contemporary and recent researches on the cultural issues targeted the process of cultural change among migrants and minority people within the mainstream strata of a given culture; however, limited research is conducted on the behavioural transformation as a product of globalisation (Sobol, Cleveland, and Laroche, 2014).

This research essay is purposefully written to explore the underlying scenario related to this topic by including and referring to different literature and viewpoints of the scholars and experts. The theme of this essay will be to discuss and assess the aftermaths of globalisation on transforming the behavioural patterns of the people towards consumption of goods.

Globalisation Definition

The term ‘globalisation’ not only encompasses the economic and trading practices, but also the human agents or the practitioners whose behavioural attributes can impact the globalisation phenomenon itself. In this way, the globalisation curtails the influence of cultural or societal differences related to paradigm development and also widens its scope while including the economic and financial activities regarding consumption of services and products. Another understanding of the world globalisation can be established by considering it as the international transfer or exchange of public, money, commodities, knowledge and the cultural norms, which resulted in the boosting the awareness level of people in the two last decades of the last century (Jadoon, Butt, and Hayat, 2016).

In the context of social sciences including culture, sociology, political science, and also economics, the term globalisation is treated as comprising the international classification, electronic media, and the international treaty World Trade Organisation (Cornwell and Drennan, 2004).

It is explored through researches that the globalisation directly influences the patterns of consumptions and the society. The consuming trend and style a society adapts mostly rely on the development of thoughts and their needs. The significance of technological revolution in guiding the consuming patterns is pertinent for consideration. Moreover, the online shopping system has impacted the traditional trends and patterns enormously (Jadoon, Butt, and Hayat, 2016).

As per Ruediger John (2005), globalization process does not ensure the one’s freedom and security. It also lacks the definition of nations-wise social values along with the enforcement of global law pertaining to address human psychology and behaviours. Moreover, instead of politically addressing the cultural developments, the emphasis of globalisation is more on the spread and sharing of technology and economical boom (John, 2005).

Divid Howes (1996) in his book used the term homogenization which refers to the unity in the global village. The terminology depicts the paradigm of cultural and social influences in the international markets are due to the intrusion of commodities and products in the form of imports based on the knowledge gained through globalisation. This paradigm also emphasises the need to understand and accept the rise in the cultural and social differences occurred due to the export of domestic goods and the import of goods mostly produced in the western world. One contemporary contextualisation of the consumption patterns of people in the global village is the motivation of consumers or the people to choose the goods as per their own liking and disliking instead of being a blind victim of globalisation. This is because the people of the underdeveloped countries are often influenced to purchase those products which are not only new and alienated but most of the time also serves as damaging the local culture rather replacing it with the imported culture (Howes, 1996).

There is a need to go deeply to understand that the consumers’ attitude is influenced by both internal and external factors in the form of domestic culture and the consequences of globalisation respectively. Several types of research have been continuously conducted to examine the consumers with the help of examining their lifestyle. A consumer’s lifestyle is the agent of the tendency of adapting the change in behaviour for consuming items and products of a single or multiple manufacturers. It is again the globalisation which enforced manufacturers all around the world to be indulged in an extensive competition in order to win the consumer’s satisfaction. This ultimately helped the consumers in terms of having competitive quality in products (Dunn, 2015).

Globalisation MBA Project
Globalisation MBA Project

An argument in the work of Elena Kell (2012) supports that the globalisation forms and leads to a consumption based society in which consumption has become indispensible and along with its ethical practices. Consumers are generally unaware of the supply chain and operations management involved in the availability of products imported from foreign countries. Hence the ethical aspect of consumption addresses the consumer’s responsibility to be updated of the steps involved in the processes (Kell, 2012).

McCoid (2010) differentiate the consumption in its three shapes. According to that categorisation, the consumption of goods will not remain sustainable if the resources are used more than what exactly required, and this is called overconsumption. This mechanism often leads to the lower quality of life and damages the environment. On the contrary, the under-consumption is the utilisation of resources much less than the required, hence causing poor quality to health the lifestyle. It is observed that the main cause of under-consumption in the age of globalisation is the inequality in the social distribution of resources. Both forms of consumption do not contribute to sustainability. The sustainable consuming patterns, however, do not cause the environmental damage and the human health. In order to develop the consumption pattern in a sustainable way, there is a need to accept the relationship of over and under consumption with the globalisation, because in a global village, the under-consumption of most groups causes the over consumption of few groups (McCoid, 2010).

On a critical side, the contemporary consumption patterns have negatively impacted the development of human wellbeing on the individual as well as on societal levels. This change happens in a way that it spread the social inequalities among groups and even countries through globalisation. The inequalities are spread due to the differences in the quality of products and services for all different social classes within a certain society or the region. The global consumption pattern is also promoting and supporting the flow of resources to a limited class of people and groups who have much more wealth to spend on even luxurious items instead of just the basic needs, hence the poor class of people in the world continues to suffer the lacking of even basic needs due to the lack of resources. Similarly, the globalisation has intruded the consumption of food based items which are most of the times either not synchronised with the eating habits of the people of a particular country or are much expensive than their local alternatives. The adaption of foreign goods and items also often creates environmental problems in the form of waste disposal and discharge (Khor, 1998).

The increase in the free trade between countries has also enhanced the availability and quantity of goods and services for the end users. This scenario was for sure cannot be imagined the effectiveness of various global trade pacts, agreements, and the role of unions worldwide. With the increase in the quality as well as a variety of products through globalisation, the consumption pattern among people has drastically changed. People pay due importance in conducting a preliminary survey, physical or online, regarding the particular product they are going to buy. Moreover, unlike before, the brand has been given comparatively less importance by the consumers (Scriven, 2014).

The technological advancement, globalisation and the integration of countries around the world have significantly changed the consumption pattern of people all over. The internet facility got the users of around fifty million in only five years; hence it is pertinent to accept that through internet lives of thousands and millions of people in all countries evolved positively. The comparative survey has become much easier through the internet for everyone regarding any product before its purchase. Everyone in the global village can be informed of the patterns of the lifestyle of any other person or group in other parts of the world (Kónya and Ohashi, 2004).

Globalisation Conclusion

This research essay has explored different theoretical perspectives of various authors to explore the aftermaths of globalisation on transforming the behavioural patterns of the people towards consumption of goods. It can now be concluded after a comparative analysis of various viewpoints on the topic, that the globalisation has certainly opened the door of opportunities for not only sharing of knowledge, technology, and goods, but also played and has been playing a significant role in designing and changing the behavioural patterns of consumption among consumers and end users all around the world in this global village. Some paradigms consider it as positive while the other as the negative role of globalisation because, in some perspectives, it has also led towards social and financial inequalities among societies and classes of people.

References

Cornwell, T.B. and Drennan, J., 2004. Cross-cultural consumer/consumption research: dealing with issues emerging from globalization and fragmentation. Journal of Macro marketing24(2), pp.108-121.

Dunn, K., 2015. Globalization and consumer: What marketer needs to know. The Neumann Business Review, pp.16-30.

Howes, D., 1996. Cross-cultural consumption: global markets, local realities. Taylor & Francis US.

Jadoon, A.K., Butt, A.R. and Hayat, M.A., 2016. Development of Measurement Models for Globalization, Consumption Patterns and Culture: A Case Study of Three Big Cities of Punjab, Pakistan. Pakistan Economic and Social Review54(2), p.327.

John, R., 2005. Globalized Culture, Consumption and Identity. Translated by Gunilla Zedigh. Baden,

Kell, E., 2012. Ethical consumer in a globalized world: challenges for the individual’s identity. A study on ethical consumers in Lund and Malmö.

Khor, M., 1998. Globalisation, Income Distribution, Consumption Patterns and Effects on Human and Sustainable Development (no. Hdocpa-1998-06). Human Development Report Office (HDRO), United Nations Development Programme (UNDP).

Kónya, I. and Ohashi, H., 2004. Globalization and consumption patterns among the OECD countries.

McCoid, C.H., 2010. Globalization and the Consumer Society. Global Security and International Political Economy–Volume II, p.49.

Scriven, J., 2014. The Impact of Globalization on the Consumer. The Nouman Business Review, pp.13-23.

Sobol, K., Cleveland, M. and Laroche, M., 2014. Globalization, Culture and Consumption Behavior: An Empirical Study of Dutch Consumers.

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Outsourcing Low Cost Countries

Benefits and Risks of Outsourcing to Low Cost Countries

Apparel and luxury value chains have come up with strategies so as to be cost competitive, increase the income, and expand the market for their goods. Outsourcing the end-to-end supply chain means that activities of an organization are carried out by an external company that specializes in these activities (Pickles et al., 2015). More so, a company can pay attention to its key competencies satisfy consumers, and be more flexible in maintenance and operation of its supply chain.

Apparel and luxury industry is very volatile today, frequent changes in expenses, risks, and demands for materials and goods as well as the changes in factors like international business environment are some of the challenges affecting the end-to-end supply chain. Anything that halts or reduces the movement of material, as well as the apparel and luxury goods, are considered a problem to the supply chain (K3SoftwareSolutions, 2017).

Outsourcing Benefits

Apparel and luxury companies have been able to expand their supply chain to many different countries and migrating to outsource manufacturing which has seen reduction in the cost of production. This strategy has promoted division of labor throughout the end-to-end supply chain by allowing company to concentrate on principal business undertakings. The organization is allowed to concentrate on its core competencies while specialist suppliers are given non-core undertakings (Handfield, 2017).

Suppliers who can carry out the processes more efficiently are tasked with this role and therefore outsourcing in low cost countries helps make the supply chain more effective. International brands have been allowed to create a completely responsive supply chains as well as bringing apparel and luxury products of low price to the shelves of stores (Handfield, 2017). Low priced goods are as a result of using external company’s expertise, knowledge and links to make cost-effective plans. Besides, time is economized since the time taken in designing, and delivering new clothes and luxury products to the market has been reduced from over a year to only a few weeks (Handfield, 2017).

Through outsourcing in low-cost countries, companies have been able to achieve effective processes, low-priced goods, and consumer satisfaction leading to outstanding performance and strategic advantage. Supply chain also becomes more flexible as the company has freedom to choose who they can do business with. Also, outsourcing enables the end-to-end supply chain of the organization to be more traceable (Robinson, and Hsieh, 2016).

Outsourcing-Low-Cost-Countries
Outsourcing-Low-Cost-Countries

Outsourcing Risks

Despite the benefits, an organization exposes their brands to great risks through outsourcing because it becomes a supply chain against supply chain. When going after cheap labor, apparel and luxury companies have been putting immense pressure on the suppliers who in turn are ready to reduce their invested capital to have low costs (Handfield, 2017). So as to compete with other businesses in the low-cost countries, suppliers forwent investments and labor practices that reduces the safety standards in a company and this is likely to damage the brand image of the apparel.

Poor working conditions in the apparel and luxury industry so as to maintain common local codes in low-cost countries is a disadvantage to the supply chain (Handfield, 2017). Another challenge to the supply chain is the abroad manufacturing delays. Apparel and luxury stores that are in western countries are progressively relying on the clothes and accessories from countries like China. Most newcomers to the industry may be found off guard by the delayed manufacturer (K3SoftwareSolutions, 2017). Moreover, damaged shipments and some that get lost is another menace to the apparel and luxury industry. Possible unseen costs such as inflated shipping price can result.

Besides, there are possible setbacks to the supply chain for instance late receiving of inventory leading to consumer dissatisfaction, loss of income and problems in the end-to-end supply chain. Problems may also arise during integration of the two Apparel and luxury companies affecting supply chain. If the hired company economize, use cheap materials or even fail to assess risk fully, the supply chain will be affected due to decreased sales and brand equity (Meeken, 2013).

Conclusion

Outsourcing in low-cost countries helps Apparel and luxury companies be more efficient in their operations because they concentrate of core competencies and they can produce cheaper clothes and accessories as well as satisfying consumers, therefore, affecting supply chain positively. However, there are risks involved such as pressuring suppliers to reduce investment capital to keep low costs. More so, companies adopt common local standards which can ruin the brand image and problems in the hired company can also affect the organization negatively.

References

Handfield, R. (2017, August 23). Needed: A New Way to Manage Risk in Low Cost Countries. Supply Chain Resource Cooperative.

K3 Software Solutions, (2017, December 8). Supply Chain Challenges in Apparel Industry and How You Can Fix Them. Fashion ERP.

Meeken, Z. (2013, June 13). The Risks and Benefits of Outsourcing Supply Chain Management. Business.org.

Pickles J, Plank L, Staritz C, Glasmeier A (2015) Trade policy and regionalisms in global clothing production networks. Camb J Reg, Econ Soc 8(3):381–402

Robinson, P. K., & Hsieh, L. (2016). Reshoring: a strategic renewal of luxury clothing supply chains. Operations Management Research, 9(3-4), 89-101.

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Huawei Operations Management Concepts

Huawei Operations Management Concepts and Practices and their Application in Real Business

Huawei – Operations management has been expanding to a broader notion of service and production management hence signifying the principalities of operations management concept in the transformation of raw materials to finished good ready for delivery to the consumer. The increasing recognisability and importance of operations management in organisations have led to growth and exploration of techniques and concepts fundamental in production and service delivery. Therefore, the effectiveness and efficiency of operations and service delivery in organizations are determined by how well they apply operations management concepts and practices in their endeavor.

Operations management scope ranges across various enterprises where people are involved in production and service delivery activities such as product and service design, technology selection and management, system design, process selection, quality improvement etc. (Kunchala). These concepts and functions entail many interrelated activities including scheduling, quality assurance, inventory management, capacity planning etc. fashioned toward effective and efficient production and delivery of goods and services.

Huawei Technologies Corporation, being among the leaders in the production and sale of mobile devices, they need to maintain a high-end operations management through the application of the latest and best operations concept in operations management. Besides, various factors necessitate the organization to facilitate streamline operations management. These factors include the quantity and quality of production, market diversity, change in technologies, competition, and the ecosystem.

Huawei, for instance, is inculcating the user-centric operation initiative which is aimed at digitizing their product while improving quality and user experience. This, therefore, entails the use of market research in their quest to deliver quality products which are user-friendly and well-paced with trend and technology (Huawei). Since the organisation uses make to deliver production approach, their market research should involve an in-depth analysis of the consumer preference and inculcate them during the planning, design, and production of various products.

The organization applies a generic and multistep product development process where they are technologies pushed product and platform products. For instance, the production of the Huawei GR5 product was a platform product as it was built around the pre-existing technology subsystem of the Huawei GR3. Besides, the Huawei Y series is built along a product platform where they use already pre-existing technology. Due to the overly increasing enormity and complexities due to technologies advancement, Huawei, therefore, enhances management transformation as they resort to a lean operation to accommodate customer requirement to improve production efficiency while controlling costs.

To cope with the competition and rapidly changing technologies, the organization applies the quick-build products which entail the rapid modelling and prototyping. To achieve a seamless and quality production, the organization integrates the operations and management organisation with the resources, platforms, and expertise through centralized processes. (Mingwei, Yaling & Feixiang) This highlights the importance of the effective layout decision within the organization.

Facility layout is essential in the realization of a seamless and lean production process in the Huawei Corporation. This entails determining of the arrangement and placement of workgroups, workstation, departments, inventory etc. to reduce possibilities of waste such as motion, movement, inventory, and quality accruing. It is worth noting that Huawei implements a Quality First strategy as they seek to enhance sustainability in materials and suppliers through performance appraisal.

As a contract manufacturer, Huawei has a high-end procurement decision-making team aimed at strengthening customer and supplier’s sustainability. For instance, the organisation has posited a procurement quota to enhance supplier sustainability hence minimizing the risks in supply while facilitating customer satisfaction hence boosting supply chain a competitive advantage. The organizations evaluate supplier eligibility based on compliance with the established supplier Huawei Supplier Sustainability Agreement, laws and regulations.

Further, the procurement process in Huawei is value oriented which entails adhering to the supplier’s regulations, transparency, and scientific procurement which is aimed at building a seamless and healthy s(secure, reliable, and competitive) supply chain. Besides, to facilitate the procurement process, Huawei facilitates a joint innovative, strategic cooperation with a win-win and benefit sharing process. This is achieved by enabling and encouraging mainstream partners to engage in the initial stages of product research and development to assure supply and competitiveness during the process (Tao).

Huawei Operations Management
Huawei Operations Management

Being a contract manufacturer, the organization needs to outsource various parts and or services and maintain robust industrial relations to enhance operational efficiency and effectiveness. This is critical as it enhances reasonable profit distribution within the industry thus ensuring key partners and suppliers gain sizeable and reasonable profits hence enhancing a success shared, competitive, and sustainable supply chain. A comment by Huawei’s Consumer Business Group chief, Yu Chengdong, “We are laying out plans for all our key smartphone parts. Huawei might not manufacture these components directly, but it does not mean we do not own technology to manufacture them ourselves” indicates the commitment and appreciation by Huawei to outsource their non-core competencies and dwell on competency for efficiency and effectiveness in their operation after the flash memory incident (Tao).

Additionally, while the organization seeks to facilitate lean manufacturing which is eco-friendly and sustainable, the organization should conduct regular value analysis and sensitivity analysis. These analyses are essential as they enhance the better performance while adhering to customers’ requirement. Lastly, Huawei has prioritized quality as the quality control department is fashioned to make the products synonymous with high quality. The objective is Huawei to win on quality through provision of high quality services and products consistent with their requirements.

MI global started operating in an already competitive market across China and the world. Various challenges culminated which had led to the organization to fall to a ‘unicorns’. Initially, the organization faced a slump supply chain associated with the rapid organizational growth which made the organization to retreat from overseas markets. Additionally, Mi had several organizational challenges that critically influenced their operations hence overall performance.

The organization has facilitated their design and manufacturing process through the application of an innovative business model which differentiate itself from other manufacturers at every phase of the customer journey. First, the organization has facilitated the production and development process of their products as depicted by their CEO, Lei Jun as “Mission Impossible.” Their manufacturing process is unique as they do not have a single physical factory as compared to Huawei which indicates a radical shift from the traditional approach in inventory management. This is vital toward the achievement of lean manufacturing as wastes are reduced in the production process. Xiamo’s make to stock production process inculcates customer requirement as depicted by the research and development process (Wang). The organization adopts a different strategy to reach client which entail cloud sourcing and application of social community to create awareness while at the same time gather information from the customers.

Different organizations have varying strategies and operations in their manufacturing and distribution. In comparison with MI, both organizations applied quick bound product development process where sample and prototypes are designed which includes the mix of the shape and the identity of the line design while depended on the outsourcing various components. Therefore, Huawei and Mi can be described as contract manufacturers.

Mi started operating in an already volatile and competitive market which necessitated differentiation. First, the organization MI Global prompted to restructure their operations through the adoption of more seamless and effective operation management practices. For instance, they restructured their smartphone hardware, supply chain, quality management as well as Research and Development initiative. Besides, the marketing of the end product and delivery to the consumer was exclusively online which made it inaccessible to many less tech-savvy clients (Kline). The organization had to implement therefore a unique and multistep production system which was more platforms based to facilitate production and supply. After their fall, the organization has become one of the super houses in tech in China competing with Huawei. In contrast, Huawei’s also invested greatly in research and development but they had a different marketing strategy which was both through outlets and online platforms.

 Besides, the production design and development entail outsourcing of various components including processors, casing, or camera from other organization for profound and seamless manufacturing. This process culminates with detailed quality tests which are critical in value and sensitivity analysis. Each phase of product development is closely monitored, and any mishap is remedied accordingly before mass production and supply of the product to the final consumer.

Additionally, Xiamo has been a market leader in terms of competitive prices on high quality products. This has been enhanced by sustainable and value-based procurement of components facilitated by quality controls and value analysis. For instance, the Mi3 has a Sony Camera with a sharp LG display and Phillips flash. The organization, however, is purposed toward zero inventories as they only manufacture based on orders hence inventory holding cost is automatically reduced. They procure components only when they get orders (Ghong). This has enhanced the effective alignment of their business model and operations hence meteoric rise.

Huawei Strengths

Huawei had various strengths as compared to Mi in terms of and manufacturing and distribution. For instances, their approach on stock-to-order was favourable in term of logistic and inventory management. Mi implemented a zero inventory management practice where they solely depended on customer orders to procure components. Although this method can save a lot of inventory cost, it can be constraint in case of inventory shortage or delays in delivery. In addition, Huawei had a clear procurement and tendering scheme which facilitated the selection of supplier hence facilitated suppliers’ involvement in the manufacturing process.

Adoption and implementation of seamless and profound operation management concept in the production and delivery of goods and services is a blueprint to the organizational success. They main operations management principles and knowledge adopted by the company included; the principle of reality where Huawei didn’t focus only on lean management or total quality management but rather focused on tools and time-based approaches to provide nearly universal successful operations management.

Besides, the principle of organization is clearly highlighted in the case study. Both organizations had organized their production process coherently as manufacturing, marketing, and distribution are interconnected set of processes. Other principles addresses in the study were the principal of variance, change hence the manufacturing and distribution must be bound with struggles with regulations, benefits, and wages to facilitate competitive advantage. Besides, the concept of lean manufacturing and inventory management are greatly highlighted in the Huawei and Mi manufacturing process. Additionally, the quality assurance and research and development are critically addressed. For instance, these principles enhance the process of procurement through manufacturing to delivery of the final product to the customers.

First, the organization is able to achieve or move toward lean production hence facilitating reduction of wastes which in return results in the eco-friendly operation and competitive advantage in the market (Onwuka, Ugwu & Ndife). For example, Xiamo was able to cut the cost of its products through inventory management and quality control initiatives. Reduced inventory costs and effective supply chain strategy enhances more competent, faster, and accessible products (Francis). To sum-up, adoption of operation management concepts and practices will enhance organizational efficiency, effectiveness, quality, lead time, capacity utilization, and cost objectives through value creation and value addition when transforming inputs to outputs.

Works Cited

Feixiang, Mao et al. “Making Manufacturing Productive Again With Iot – Huawei Publications” Huawei, 2018.

Francis, Abey. “Operations Management – Definition, Objectives and Functions”. MBA Knowledge Base, 2018.

Ghong. “Xiaomi: China’S Threat To Apple And Samsung – Technology And Operations Management”. Rctom.Hbs.Org, 2015.

Kline, David. “Behind The Fall And Rise Of China’s Xiaomi”. WIRED, 2017.

Onwuka, Ebele Mary et al. “Evaluation of Operations Management and Its Impact on Improved Logistics Control”. International Journal Of Economics, Commerce And Management, III, no. 5, 2015, pp. 591-602.

Tao, Li. “Huawei To Improve Supply Of All Key Smartphone Components”. South China Morning Post, 2018.

Wang, Lucy. “Xiaomi – Mobile Disruptor from China – Technology And Operations Management”. Rctom.Hbs.Org, 2018.

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