Impact of Globalization on the Dynamics of Organizational Behavior

This essay examines the profound impact of globalization on organizational behavior, highlighting its influence on organizational policies, market environment, and workforce dynamics. It discusses how globalization has led to increased market competition, necessitating policy adjustments ...Read More

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GLOBALIZATION AND ORGANIZATIONAL BEHAVIOR
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1. Introduction
Globalization has brought about significant changes in the business environment while
influencing the growth of the same in diverse economies. The continuous technological
innovations, communication, integration of the different practices summoned a drastic
modification in the operational environment of the organizations. Globalization specifically
supported the businesses in making dynamic expansions among the economies while gaining a
huge scale (Nikolova, Rodionov and Afanasyeva 2017). Moreover, the sourcing skilled
workforce, technologies and resources added to the capabilities of the organizations. However, it
might be noted that globalization also imposed significant challenges through increased
competition in the market environment resulting to price fluctuations, job insecurity and cross-
cultural clashes in the workforce. The adverse effects have a greater influence in disrupting the
overall operations of an organization in absence of sound management system. The discussion
would identify the different impacts of globalization on the organizational behavior and the
manner in which it influenced continuous modifications in the businesses.
2. Impact of globalization on overall organizational behavior
Globalization has widened the scope of making market expansions for the organizations
while supporting the same with sustenance in the markets. However, in most of the cases it has
been observed that the market expansions made by the foreign companies in a host country
intensifies competition. Höllerer, Walgenbach and Drori (2017) stated that the better
propositions that are made by the foreign organizations in the host country attracts the attention
of the potential customers while they switch their buying reference from the company in the
parent nation to the guest companies. The intensification of market competition threatens the
sustenance of most of the globalized organizations. However, it has also being noted that the

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increased outsourcing opportunities have empowered the growth of the organizations. Moreover,
Stefanovska and Tanushevski (2016) observed that the continuous innovation in the
technological aspects and the R&D operations of the businesses might be attributed to open
innovation that is specifically promoted by globalization in the business world. The section
would critically assess the impact of globalization on organizational policies, market
environment and the workforce apart from technological innovations and subtle modifications in
the business model.
2.1 Effect of globalization on the organizational policies
The organizational policies and procedures play an important role in maintaining the
effectiveness of the business operations while operating as per the needs of the venture.
Globalization has provided the organization with an opportunity of making market expansion in
the different economies. However, the expansion of the businesses in the different economies left
the businesses to the exposure of different political and legal impositions that must be complied
by the same. The compliance of the organizational policies to the different legislations have
critically reflected the impact of globalization on the policies and framework designs that are
generated by the businesses. For an example, if an Australian organization is planning to expand
in the Chinese markets, the business is required to involve policies that would satisfy the legal
and government regulation related requirements.
Moak (2017) stated that the adherence to the legislative and regulatory requirements that
are imposed by a nation while making a business expansion affects the interests of an
organization. The differences in the legislative and regulatory requirements have also taken the
shape of national culture which might be followed by the foreign organization while operating in
a globalized market. According to Gupta, Shaheen and Reddy (2017), the policies are framed by

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the organizations with the purpose of influencing their sustenance related needs. For an instance,
the Canadian government applied certain workforce related legislation which restricts an
organization in exploiting the capabilities of the employees in minimal wages. In this situation, a
Japanese organization would not be able to expand to Canada without revising the payroll and
working hour related policies of the same.
The revision in the policy statement of the organization would also increase their cost of
operations in the Canadian markets. However, it has been observed that the clarity of legislative
expression in most of the countries have influenced the growth of the foreign companies. The
organizational policies related to performance appraisals, payrolls, rewards and employee
benefits are revisited by the organizations with the purpose of adhering to the different legislative
and regulatory impositions that are made by the nations. Globalization has unified the concept of
needs of the stakeholders and thereby most of the economies have taken the initiative of
imposing legislations that would adhere to the interest of the stakeholders. Tomyuk et al. (2019)
stated that the public centric policy making is one of the most dynamic modifications that are
induced y globalization on the private and public enterprises, restricting their capability of
exploiting the resources and exhausting the same.
The legal and regulatory requirements have narrowed the scope of expansion of the small
entities while increasing the amount of competition in the existing markets, resulting to
insolvency of the SMEs. Policies relating to continuous technological innovation are however
encouraged by globalization. The concept of globalization specifically aimed at unifying the
wealthy among the nations while minimizing the opportunities of over- exploitation. Therefore,
globalization had a positive impact on the legislative and regulatory systems, in accordance with

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the systems theory, and mandated the organizations to adapt their policies to the ever changing
market place while addressing the interests of the stakeholders.
2.2 Effect of globalization on the market environment
Globalization attracted the attention of wider number of businesses to expand to the
international market place, intensifying competition. The wider scope of expansion that is
offered by the globalization has caused greater number of foreign firms making investments in
different economies for establishing their growth. Djelic and Quack (2018) stated that the
increase in the number of firms getting involved in the expansion related operations, the more
complex the market grew. Technological innovations, infrastructural capabilities, logistics and
outsourcing activities greatly empowered the growth of the foreign organization in the different
nations. Moreover, Radović-Marković, Brnjas and Simović (2019) noticed that all the businesses
aimed at maintaining a uniqueness for providing the same with a competitive edge. The
uniqueness, empowered by the growing expectation of the customers, induced complexity of
technological innovations while intensifying the market competition.
The intensified market competition resulted to insolvency of various small enterprises,
with inadequate investment capital for empowering the R&D or initiate dynamic technological
innovations in the business models. On the other hand, most of the multinational organizations
were noticed to induce technological innovations with the purpose of improving the efficiency of
their business models. Hanson (2018) stated that the increased competition among the businesses
in the same industry increased the chances of technological innovations. It has been observed
that open innovation, collaboration among multinationals, mergers and acquisitions are some of
the common resultants that globalization induced the business environment with. The wider
scope of expansion offered by globalization enabled businesses in maximizing their economies

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of scale earnings making their value propositions available in the different international markets.
In this connection, outsourcing activities and the growth of support industries along with IT
influenced growth of the organizations.
The improvements in the Information and Communication Technologies (ICT) have
enabled the businesses in making the communities and the customers aware of the unique
propositions. Improved communication between the organizations and the customers helped the
management in improving the process structure and propositions. The improvements in the
communicational media and inter-connectivity through social media presence have greatly
influenced the marketing activities of the organizations. Bose and Mudgal (2016) observed that
the increased promotional capability of the organization might be attributed to the technological
advancements in communication by the concept of globalization. Moreover, Big Data paved way
to the success of the businesses while identifying the market demand and the trends that are
affecting the business environment. According to Pekarskiene et al. (2017), the developments in
the ICT and Big Data Analytics enabled the businesses in increasing the efficiency of the process
designs while adhering to the market trends and demands. On the contrary, the business
outsourcing activities supported the multinationals in minimizing the risks related to increased
cost of in the production process or compromising on quality of propositions.
The outsourcing activities offered the businesses in evenly distributing the risks while
maximizing the quality of the propositions through sourcing from the experts. Therefore,
globalization has sufficiently supported the growth of the organizations in the new markets
through technological innovations and growth of support industries. However, Arogyaswamy
and Hunter (2019) opined that the intensification of competition in the different foreign markets
and the need for huge amount of investments have curtailed growth of the SMEs, resulting to

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greater threat of insolvency. Considering the micro levels, globalization fostered a negative
impact on the growth of the small enterprises. However, in the macro levels, globalization has
achieved the objective of inducing stability in the global economy through tradeoffs. Moreover,
Kriesler and Nevile (2016) added that globalization has contributed to the development of
international relation between different nations. Therefore, globalization significantly improved
international relations while paving way towards better trade opportunities.
2.3 Effect of globalization on the workforce
Workforce plays an important role in improving the business operation while
contributing with their participation in the different continuous innovation related measures that
are planned by the ventures. In this connection, Globalization offered the organizations with an
opportunity of improving the staffing capabilities while sourcing talents from different foreign
nations. Vivarelli (2018) stated that workforce planning is considered to be one of the vital
operations that are undertaken by the organizations for improving their process structure and
design. In this connation, globalization offered the organizations with an opportunity of sourcing
skilled and experienced workforce through application of geocentric, polycentric and region-
centric staffing approaches. However, Dau-Schmidt (2017) reflected that the increased supply of
skilled yet cheap labor minimized the bargaining power of the workforce. The easy
substitutability and exchangeability of the workforce and lower switching cost between the
employees has empowered the organizations in exploiting the value of the workforce through
minimized grade pays and increased hours of work.
Globalization has induced diverse workforce in the organizations. Diversity of the
workforce have critically empowered he innovative capability of the organizations while
operating as per the common objectives of organizational growth. People from different streams

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and backgrounds reunite in the form of organizational workforce while contributing to the
innovative measures that might be structured by the organization. However, Williams et al.
(2017) stated that cross cultural conflict is one of the major resultants of a diverse workforce,
disrupting the flow of operation in an organization. Therefore, organizations are expected to
form sound management policies and mechanisms for minimizing the cross- cultural conflicts.
Moreover, Bose and Mudgal (2016) opined that the profit oriented approach of the
organizations and the organizational goals of increasing productivity might be taken as an
influence of globalization which has indirectly affected the work-life balance of the employees
working in the private as well as the public sectors in different nations. The increased supply of
cheap labor has not only minimized the operational expenses that are incurred by the
organizations but also maximized their annual earnings. Globalization provided the organizations
with an opportunity of using suitable job advertisement platforms for attracting the attention of
the fresh talents with the purpose of empowering the continuity of the operations while
improving their innovation capabilities.
The easy availability of the human resource in the globalized context has empowered the
business organizations in empowering their innovative measures. However, Djelic and Quack
(2018) opined that the intensification of globalization and the better HR service propositions
made by the competitor organizations might affect the capability of the organizations in retaining
the loyalty of the skilled and experienced employees. For an instance, if a company X provides
the experienced employees with US$2000 per week and the competing company Y offered
US$2500 per week, in the same market, the employees would surely switch from X to Y. The
increase in competition thereby guided the businesses to form effective employment policies in
adherence to the legislative and regulatory requirements of the nation for retaining the loyalty

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and commitment of the employees. The intensity of competition in the markets might be
attributed to globalization, which has drastically changed the business environment through
increased involvement of different entities.
3. Conclusion
Therefore, from the above analysis it might be stated that Globalization has brought about
significant modifications in the business environment, the policies of the organizations and the
workforce planning systems through the induction of intense competition. The intensified
competition induced technological innovations, communication and information transmission,
use of Big Data Analytics for continuous improvements and the like in the markets. The
development of the different aspects have greatly influenced the growth of the organizations.
However, there are risks that are offered by globalization related to market volatility, insolvency
and changing preferences of the customers which might significantly affect the sustenance of
businesses. Overall, globalization has paved way for the growth of the organizations in the
international markets and achieving greater economies of scale.

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