Running Head: Globalization & Operations Management 1
Globalization & Operations Management
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Globalization & Operations Management
Abstract
Understanding the definition of globalization along with the positives and negatives of
globalization are important components to any business that plans to be successful. There are
also six key reasons that describes why companies decide to globalize into some type of
international operation, which will also be explained in this paper. The last few topics covered
about globalization will be how a company decides what type of global operations strategy
option they decide to follow and which companies make sense for each type. Operations
Management is the other topic covered in the second half of the paper. First described will be
about the basics include how a company develops a mission and what type of strategy the
company wants to use. After a company knows the basics they have to find out how they want to
achieve a competitive advantage via how they work their operations management. Understanding
key issues within their operations is also important to staying effective, companies can use value-
chain analysis, five forces model and SWOT Analysis to help aid the company’s operations that
will help give a bigger picture about why a company decides to make the specific decisions that
makes them operate more effectively. Now that all the subjects are covered we will take a step
back to the beginning and start with explaining the definition of globalization.
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Globalization & Operations Management
Globalization
The definition of globalization, according to www.globalization101.org, “A process of
interaction and integration among the people, companies, and governments of different nations
which is driven by international trade, investment and aided by information technology.”
Essentially a business would be contributing to globalization if they decide they want to start to
offer their services to companies on a worldwide scale. Even though we have seen this huge
increase in globalization within the past couple decades, it has actually been around for
thousands of years, the medium for globalization has just changed. Early times of globalization
includes traveling far distances in order to buy and sell new product. Times have changed in
which globalization has stepped into a whole new scale where we can essentially have every
different part of a business in a different country but at the end of the day the product is
assembled. There are many more advantages that come with globalization but there are also
disadvantages.
Globalization can be both good and bad, it just depends on how a company decides to
expand into a global economy. One of the biggest negatives of globalization is that it allows
corporations to flourish while it kills the small mom & pap stores along with some of the middle
class. The larger companies set the trends for the rest of the industries and no one has enough
power to fight back and change the standard, this is essentially like creating a monopoly.
Another negative about globalization is that companies are able to effectively evade some types
of taxation by trading with countries while being based in another. With these negatives being
noticed, there are many positives that come from globalization. One of the biggest positives is
that globalization provides poor countries with a chance to develop economically because of the
infusion of money and technology from the new business that enters that specific country. These
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Globalization & Operations Management
positives and negatives can be seen within the six reasons why companies decide to expand into
an international operation, which is the next section.
The first reason for globalizing a company would be to improve their supply chain.
According to our book, “Operations Management” 12th Edition, supply chains would improve
because it is possible to find unique resources in the new country that couldn’t be found in the
home country. A few of these unique resources include better expertise, low-cost labor and raw
materials. A good example that is popular among companies is to find countries that have human
labor that costs less. This is a good plan for companies because they’re able to produce products
at a lower cost to make more profit, even though it seems less ethical because companies are
