Managing Across Borders Assessment 2022

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Managing Across Borders
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Executive summary
Globalization is the interconnection of the world through information and trade. It is
facilitated by the flow of information and the advancement of technologies that allow
multinational corporations to tap into the global market. Globalization impacts the business
through the provision of new market opportunities and the emergence of both domestic and
international markets. This report will focus on the impact that globalization has on the
international business. The managers of international business have to be alert to predict the
ever-changing trends in globalization. They can achieve this through proper leadership,
extending their international markets, diversity and inclusivity, strategic positioning of the
business and developing organizational culture. Some of the multinational corporations such as
Apple have reaped the effect of globalization through offshoring and outsourcing of their
business operations. Apple uses the global strategy that standardized their products for all the
international market. The new global market has increased the profitability of Apple and
provided cheap labor. However, this has caused some challenges such as tarnish of the brand
reputation due to unethical business practices such as employing underage workers and paying
workers minimum wage.

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Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Impact of globalization on business............................................................................................................5
Advancement in technology....................................................................................................................6
Market development...............................................................................................................................6
Political changes......................................................................................................................................6
International business environment........................................................................................................7
Competition.............................................................................................................................................7
How international managers stay ahead of globalization............................................................................7
Rapid change of globalization conditions................................................................................................8
Strategic geographical positioning...........................................................................................................8
The organization models.........................................................................................................................9
Developing a global culture.....................................................................................................................9
The leadership of a global company......................................................................................................10
Outsourcing and Offshoring at Apple Inc. opportunities and challenges...................................................10
Opportunities and challenges of globalization in Apple........................................................................12
Conclusion.................................................................................................................................................13
References.................................................................................................................................................15

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Introduction
The recent years have seen an increase in global connectivity that is characterized mostly
by trade. Globalization is transforming the modern world while affecting the society, business
and the environment as a whole. Globalization has catalyzed interconnectivity between people,
countries, regions, and continents making it easier to disperse information from one point to
another. It does not only relate to information, but globalization has facilitated the exchange of
cultures, food, music, and overall ideas. Since globalization has the predisposition of increasing
the economic integration in the different parts of the world, it is hugely impacting on the world
economies. Globalization has worldwide ramification, and it has been taking place for over
hundreds of years, however, its impact has accelerated in the last half of the century. However,
there still exists a huge gap between the developed and the developing worlds. Globalization has
facilitated business boom to consumer and world economies. However, there is a new challenge
to the perception that free trade has been a win to every nation but this has recently been
challenged. For example, the president of US, Donald Trump, has stated on record that other
countries have been taking advantage of the economy of America. Such utterances and opinions
have challenged the effectiveness of globalization in improving the living standards of the world.
This point of view has been established to have many flaws because it is a known fact that the
patterns of economies do not have a place for skepticism and the benefits of cross-border
investment. Globalization has been attributed to creating new employment opportunities and
enables multinational corporations to outsource labor. This report will focus on establishing the
impact that globalization has on businesses and how the international managers predict the
changing trends. It will additionally identify how outsourcing and offshoring contribute to
globalization and illustrate the challenges and opportunities provided by globalization.

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Impact of globalization on business
All commercial businesses or transactions be it n private or government enterprises
occurring in two or more countries, regions, or nations beyond their sovereign bodies is referred
to as an international business. The transactions carried out in international businesses are mostly
of economic resources and they involve, banking, insurance, skills, capital, and international
production or manufacturing of goods and services (Clarke, 2013, pp.410). They may consist of
trading through direct import and export or foreign direct investments. Multinational
organizations are those that are involved in international businesses. These enterprises own
substantial assets and engage in various business transactions through a network of subsidiaries
that are located in different countries (Asongu and De Moor, 2017, pp.200). Most of these
branches are autonomous and operates under their business strategy based on the market
characteristics of the area in which they operate.
Globalization is a trend that is being witnessed all over the world, characterized by world
economies losing their boundaries to connect. This allows multinational companies to participate
in a range of economic activities in most parts of the world (Doiz, Lasagabaster and Sierra, 2013,
pp.1414). Majority of players in the global market have reduced their trade barriers, making the
trade of goods and services between countries much more seamless. This makes it viable for
many companies across the world to venture into new markets to increase their productivity.
The participation of companies in international trade is not only necessary but inevitable,
as the domestic market is constantly under siege from other international companies seeking to
establish themselves in the new markets. Some factors impact businesses in the development of
growth in the international market. They include the advancement of technology, market
development, political changes, international business environment, and competition.

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Advancement in technology
Technology in the world is ever-changing, and this has facilitated the international
business to align their operations with the changes that are being witnessed. The development of
computing and communication infrastructure through globalization has increased the flow of
information and ideas across borders. It has therefore enabled the provision of information
regarding goods and services to the consumers and also given small business a chance to
compete in the global markets (Ferreira, Fernandes and Ratten, 2017, pp.80). Globalization has
further eased the shipping and ordering of goods with a consumer living in South Africa for
example, can order goods online in Amazon platform in the US and have it shipped in less than
three days. The technology has also facilitated top executives of multinational corporations to
hold meetings with their subsidiaries without necessarily having to travel.
Market development
Globalizations has facilitated cultural exchange, development of global markets,
development of international tourism and overall improvement of living standards among
consumers living in the developing world (Ravishankar, Pan and Myers, 2013, pp.400). It has
also facilitated the emergence of a new category of consumers with purchasing power for goods
and services, through the liberalization of the international trade and the availability of global
distribution networks. This has provided companies with opportunities to explore international
markets.
Political changes
Globalization has enabled the coming together of world communities and this has further
informed the formation of trade agreements as well as trade blocks such as the European Union
and COMESA (Dávila, 2013, pp.111). This has indeed unified nations into a single market

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providing more opportunities for companies. The reduction of trade barriers and the introduction
of foreign direct investments by the government has led to new markets opening up.
International business environment
Communication and information technology infrastructure have facilitated globalization
and open up new markets. This allows businesses to tap into new market segments and develop a
new competitive edge.
Competition
The main reason for joining the international market is for companies to develop a
competitive advantage. The competition is the global market is high and ever-evolving and
multinational have to strive to maintain their position (Clarke and Boersma, 2017, pp.116). As
the trend in globalization increase, more opportunities are opening up for international
companies to explore. Multinational companies, therefore, formulate strategies for competitive
positioning (Calabrò, Torchia, Pukall and Mussolino, 2013, pp.511). The company has to
carefully select its customers, markets and products and services. Globalizations also comes with
its share of competitive challenges. The multinational corporations have the pressure to maintain
competitiveness and this requires them to significantly cut down their operating costs. This
results in the need to locally outsource for labor and production resources.
How international managers stay ahead of globalization
Over the last decade, there has been a huge wave of globalization but it has quite
subsidized. The companies that maximized on this an established their international footprints
are the big winners of the globalization. This includes companies such as Volkswagen, a German
automotive company, which has experienced annual growth of about 11 percent (Hambleton,
2015, pp.168). However, globalization is not yet over but it is slowly morphing into a more

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complex stage. The emerging international markets will be a key source of growth for
international companies. The CEO of companies, therefore, have to establish their companies to
go global sustainably and successfully. Every corporation has its own unique sets of strength as
well as weakness. The CEO has to, therefore, maximize the strengths and address the
weaknesses for a successful global venture. The top executives have to address the dimensions
of, rapid change of pace, geographic position of the company, the organization model, culture
and leadership strategies for successful leadership.
Rapid change of globalization conditions
The domestic market is quite understandable for the international manager but the foreign
market carries a lot of uncertainties. This may be characterized by governments imposing new
regulations, political instability, and economic recessions. The manager faces a lot of risks while
venturing into the global market. The manager, therefore, has to be agile in making quick
changes. This includes leaving certain operations to maintain global operations. It is also
essential to develop a corporate radar that monitors the economic conditions in the world, by
analyzing the political, social and economic indicators in the area of operations (Savrul, Incekara
and Sener, 2014, pp.40). The manager, therefore, needs to invest in big data and analytics
systems that monitor all information that may significantly affect the global operations of the
company. The manager needs to develop an extensive network and focus on research and
development for the formulation of new innovative ideas.
Strategic geographical positioning
There are various strategies that an international manager can utilize in the international
market. For example, Pepsi uses the classic global technique of occupying all the emerging and
developed markets through their global brands, global networks, and products. other companies
including Unilever and P&G use the multilocal technique of creating different brands for various

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markets. Globalization of a company takes steps from local, regional to finally global. Some
companies limit themselves to the regional markets (Potrafke, 2015, pp.545). However, the
international manager needs to understand that regional markets, in the long run, point out to a
global market.
The organization models
Global companies by definition have to stretch their operations across the world. This
makes the organization complex and hard to manage. If a manager uses one hierarchical
structure, leadership strategy and organization headquarters, he is bound to fail. It is imperative
for the manager to breakdown the operations of the company as per the domestic requirements of
each subsidiary (Ghazawneh and Henfridsson, 2013, pp.180). The branches should be
decentralized with their operating model. This enables the international manager to make quick
decisions and address arising issues in a quick and timely manner (Sifianou, 2013, pp.111).
Many of the companies have learned this a little too late. For example, the failure of Nokia
corporation to introduce smartphones in the market earlier made them loose to rising
manufacturers such as Apple and Samsung.
Developing a global culture
The international manager needs to create a multicultural operations environment that is
based on the diversity of both the customers and the employees. The manager should understand
the social aspects of the new market and transform the business as per the culture of the area.
This phenomenon is known as glocalization (Uusi-Kakkuri and Brandt, 2015, pp.470). It
involves turning the business to provide goods and services that are favored by the local
environment. For example, Starbucks understands the cultural importance tea plays in the United
Kingdom and have therefore changed its product mix in that market to include tea. The manager

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needs therefore to set a global culture that is reflective of each market and ensure the company
meets the requirements of the local market.
The leadership of a global company.
A good international manager has to travel extensively across his subsidiaries to ascertain
their performance. The manager needs to have first-hand knowledge of the operations in each
area. The manager should incorporate his employees in the decision-making process and be open
to feedback (McMahon, Barkhuizen and Schutte, 2014, pp.215). He should be transformative
and charismatic to boost the morale of the workforce. It is important also for the manager to have
a good and effective communication technique (Camilla, Serlenga and Shin, 2013, pp.20). The
manager should also incorporate the locals by offering employment to those who have qualified
to foster inclusivity.
Outsourcing and Offshoring at Apple Inc. opportunities
and challenges
Offshoring is the relocation of company business from its home country to another, while
outsourcing is contracting other third-party companies to make products on behalf of the mother
company. Offshoring helps the company to take advantage of lower operating costs and wages. It
also enables the company to tap into low labor cost and enjoy the stable global economy.
The New York Times states that Apple has employed about 43,000 people in the US,
however, there are well over 230,000 employees indirectly employed in China by Foxconn, the
largest Apple offshoring company. Additionally, more than half a million people in China are
involved in the building of Apple products. the distribution network in the US is largely
dependent on imports that create value for money (Nadja Lee Hansen, Zhang and Ahmed-

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Kristensen, 2013, pp.165). The Apple headquarters in Cupertino California is essentially tasked
with designing the products while the actual product if manufactured in offshored companies
such as Foxconn. This process facilitates complex autonomy for business operations all over the
world. Business firms engage in their operations in the global markets as if each market is part of
a single global market. The onset of globalization is seen as liberalization.
Apple can largely be classified under the patterns of internalization. The products of the
company are designed and developed internally in Apple’s headquarters at Cupertino, but the
components are outsourced to both domestic and international contractors. For example, the
microchip of the music player go is made by Portal player, which is a company subcontracted at
the Silicon Valley. Portal player offshore the manufacturing to Taiwan while the software is
written by developers in India who are much cheaper than the American developers. Further,
together with the iPod’s operating system, it is shipped to Hong Kong in production plant
outsourced by Apple (Schneiders, 2010, pp.198). Other products of the iPod such as the hard
drive and flash memory are made by Samsung in Korea and Toshiba in Japan. Majority of all
these operations are low cost as compared to the cost the company would have incurred were
they made in the US. All the components of the iPod are finally assembled by an outsourced
company in Shanghai and Fed Ex company is tasked with logistics and transportation of the
finished components to Apple stores worldwide. Following the impetus of business, Apple plays
a critical role in the internationalization process through foreign direct investments (FDI). This
includes offshoring, outsourcing, and exporting its products worldwide. The company relies on
globalization to carry out its operations, especially the distribution channels from different
subcontractors to the ready market.

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Nearly all of Apple’s production chain is outsourced making it an overseas production
company. The globalized operating model of Apple is an outward circle, since the company
exports similar product to a worldwide customer base who exhibit similar interests. This allows
Apple to search for growth opportunities, cost reductions, and diversification of risks, through
satisfying the demands of local responsiveness and global integration (Sheppard, Sarros and
Santora, 2013, pp.272). There are three main global strategies; multinational enterprise, multi-
domestic enterprise, and global enterprise.
Multinational enterprise is aimed at basing its direction on global growth. This strategy is
used essentially for global learning through which a company develops essential skills. A multi-
domestic strategy is based on local responsiveness and the branches of the company have the
freedom to act fairly autonomous from the mother company (Schmeisser, 2013, pp.399). This is
largely aimed at meeting the needs of the local consumer through glocalization. The global
strategy aims at standardizing the product to meet the needs of the company’s different global
markets (Masteikiene and Venckuviene, 2015, pp.1090). This strategy sees the global market as
one single market and assumes there is no dissimilar tastes and needs among the different
consumers. Apple in this regard uses the global strategy mode of operation. The company is
producing a standardized product, such as the iPhone through its offshoring and outsourcing
methods. However, Apple is under constant pressure to configure its value chain
Opportunities and challenges of globalization in Apple
Globalization has enabled Apple Inc. to command a wide market share in the global
market. Apple’s strategies of offshoring and outsourcing have significantly reduced the operating
costs of the company, consequently boosting its profit margins (Gershon, 2013, pp.52).
Globalization has also extended the demand for Apple products.

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Globalization has additionally granted Apple the opportunity to access every area of its
market. The company has also been able to attract skilled, innovative and committed employees
who ensure the company develops a quality product that is also environmentally friendly (Lane,
2013, pp.560). Apple has additionally been able to facilitate its acquisition of capital and other
forms of production through its global networks.
However, Apple has encountered some challenges such as labor conditions, inflation,
production costs, and development pace. The company has been accused of employing minors in
its offshore production plant Foxconn. Additionally, the suicide cases reported at this plant and
the waste release at Wintek touch screen facility has negatively impacted the global reputation of
the company (Pukall and Calabrò, 2014, pp.120). Recently, Apple was accused of paying very
minimum wages for a work shift of 15 hours. The company was paying 50 dollars a month to the
workers. These international challenges are impacting the global image of Apple.
Conclusion
In the summarization of globalization, it is seen as being good, bad and inevitable.
Globalization has caused around operation disruptions for business around the world.
Globalization is a phenomenon that cannot be controlled but happens due to worldly
advancements. globalization leads to international market developments, competition among
businesses advancement in technology and change in the international market. The international
manager must also be able to predict the trends in globalization and address them effectively.
This includes structuring the leadership of the organization to accommodate diversity and also
creating global networks to effectively predict the trends in globalization. Apple is among the top
multinationals that have been able to effectively adapt the global strategy. The company utilizes
outsourcing and offshoring to limit the cost of production and increase its provide margins.

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Globalization has enabled Apple to expand its operation in most of the countries and boost its
sales. However, the company has faced challenges in globalization such as economic recessions
and regulations and unethical international business practices.

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