Leadership and Management Theories

1
Leadership and Management Theories

2
Introduction
Globalization has played an important role in terms of the integration of the economies of
countries along with the economy of the world. It is primarily concerned with the expansion of
companies at the international level accordingly by entering into the national markets of various
countries and expanding their business accordingly by the virtue of the policies related to
Foreign Direct Investment. The aspects pertaining to deregulation also plays an important role in
globalization which implies the cutting of red-tape and the opening of the floodgates for the
foreign companies to enter into the markets for business and expand accordingly as per the
policies. The aspect of globalization has resulted in the formation and establishment of
multinational corporations to a huge level thereby leading to the growth of the economy of the
respective countries to a massive extent by the virtue of the attraction of a huge number of
customers in the local market in question. As a result, globalization is one of the most important
driving factors relating to the economic development of the countries in question thereby leading
to the promotion of international trade accordingly. It has also resulted in relations between
countries with regard to business. The main aim of the essay is to present an overview of the
concept of globalization. The views and opinions of the notable American economist Theodore
Levitt would be analyzed in the desired manner thereby resulting in the understanding of the
etymological aspect of globalization (Milanovic, 2016). The factors pertaining to the feasibility
of globalization would also be taken into account as far as the positive outcomes of globalization
in the long run are concerned. The aspect pertaining to competitiveness amongst multinational
companies in various markets would also be analyzed accordingly as far as the standards of the
products and services of multinational entities which are acceptable at the global level are
concerned. It would help in the delving into the modus operandi of multinational entities at
various markets in a proper and appropriate manner (Pease, Paliwoda and Slater, 2015). The
various strategies pertaining to market expansion of the multinational companies may also be
taken into consideration with reference to analysis as far as the respective country is concerned
thereby analyzing the factors at various levels accordingly. The relevant theories and ideas
pertaining to globalization may also be taken into account and analyzed accordingly with
reference to the development of the economy of the world at the desired level. The aspect
pertaining to technological advancement and related tertiary services may also be considered
with regard to the concept of globalization of markets accordingly. Finally, an appropriate

3
conclusion would be provided thereby presenting the summary of the aspect pertaining to the
globalization of markets with regard to the views and opinions of Theodore Levitt which would
help in the analysis in an effective and efficient manner.
Theodore Levitt’s Theory of Globalization
As opined by Kloosterman, Mamadouh and Terhorst (2018), "The Globalization of Markets"
was written by Theodore Levitt more than two decades ago in the Harvard Business Review on
the crucial topic of conducting business across national boundaries. Theodore Levitt was widely
popular for his way of thinking on business management and the way managers work. According
to Channon and Jalland (2016), technology has been a primary factor for changes in the Global
and multinational corporations which indicates that changes in the recent years. The flow of
information across the globe has enabled people to know more of the world, the kind of people,
their preferences, tastes and lifestyle (Fischbacher-Smith and Smith, 2015). This has made
people a global citizen. However, this thinking does not align with many citizens as they
consider technology to be disruptive and converging the world. Even when globalization has
provided with plethora of benefits, there are people consider it to be threat to human identity and
the way of living. In a way, as opined by Beck (2018), globalization has enabled people to take
advantage of the global economy as a person sitting in one country is able to use the products
manufactured by another country. Globalization has facilitated the drive to utilize global
products such as companies like Toyota, Zara, Samsung, Apple and McDonald's have created a
global presence. As suggested by Rahman, Uddin and Lodorfos (2017), there are no more
political or geographic barriers for companies to enter into a new market and their value can be
measured by the services they provide. People are living in a global era and it has provided them
with many opportunities. As identified by Dixon and Sybrandy (2015), Proletarianized is one of
the arguments made by Theodore Levitt stating that technology has fragmented the workforce. It
has also impacted on the global transport and communication networks. People desire for global
products and that has encouraged multinational organizations to cater to their needs.
Multinational corporations are supposed to be adaptive in nature (Crane and Matten, 2016).
According to the viewpoint of Levitt, multinational corporations in the modern era are shrinking
and therefore he identified strategies that would make organizations of multinational to global.
People look for good quality of products which is not too much to ask for. The market and

4
demand for standardized products has been growing and people have become aware of
standardized products available globally. Therefore, De Mooij (2018) suggests that the market
for standardized products must be kept global in order to maintain market position and brand
image. However, as Olins (2017) has opined that catering to the needs of each and every person
is not always possible by global companies. But, Levitt identified the solution of offering more
or less standardized products at comparatively lower prices which will suffice the demands of
global customers. Since people tend to opt for high quality products at optimum prices, Global
markets must facilitate the same. This ended the concept of customization of products and the
emergence of standardized markets took place. As highlighted by Hou (2018), Levitt also
proposed the strategy that price is one of the important factors for people buying products. As
consumer spending capacity has increased, people are able to spend on the things they like. It is a
proven fact that consumers are motivated to purchase high quality of products at reasonable
price.
Theodore, as suggested by Baker (2016), Levitt also proposed certain marketing concepts which
highlights that companies must be aware of the exact necessities of its customers. The key to a
successful global corporation is adapting to the changes in the nearby environment and
differentiating the products and services from its competitors in order to sustain the global
competition. Even when there are issues, global corporations must try to revamp its strategies
and move further looking for better opportunities (Smith, 2017). In the last two decades,
companies attempting to conduct business globally have been seeing the growth trend rising
upwards. There have been several issues companies have faced while going global, there are
numerous ways to overcome such issues for companies facing global competition (Steger, 2017).
In addition to that, there have been numerous questions arising on how businesses survive in the
global market and what are the implications of the issues associated with them. According to the
nature of the business and the country of operation, companies can formulate their strategies. But
according to the opinions of Levitt, having a unified strategy will lead to lesser chances of
ambiguity in the decisions taken. Deresky (2017) has opined that today, majority of companies
are willing to operate globally and with the advancements in communication and transportation
technologies, they are able to identify ways to create that position in the global market. As global
markets have become homogeneous, it has increased the demands for global products from all
over the world. People are more likely to purchase products which are globally popular chased