Discuss about the Managing Value Chain.
The current age marks the growth of globalization. Globalization is considered to be a boon for business across the world. Globalization has played a massive role in improvising and changing the dimensions of business activities. It has integrated economies and has made various countries experience the boons and banes experienced in the process. In the age of economic liberalization, one fact that could be seen is that international trade has influenced in which trade and business is carried (Beck 2015). Organizations have changed and improved their process and strategies in the business world. Countries have experienced the benefits of the flow of new and advanced products that has positively impacted the economic growth and economic development of a country. It has raised the standard of living of people due to globalization. It has successful achieved in reducing poverty and unemployment level of a country (Antràs and Chor 2013).
On analyzing the definition and meaning of value chain, it can be seen that value chain refers to all those activities and processes that add value to a product. Value chain is a very important aspect that needs to be analyzed, in order to under the processes of the organization country (Antràs and Chor 2013). Globalization has been the engine for the improvement of processes of organizations. It has impacted the various facets of organizations. The competitive advantage, technological advancement, changes in social and cultural factors, financial factors have a major impact on the value chain of an organization. It can be seen that globalization has a significant on these factors that consequently affect the value chain of an organization. Telstra has been chosen as the organization that is analyzed to depict the impact and effect of globalization on the value chain.
Impact on Technology
The age of globalization has depicted the improvement in information technology. The benefit of advanced technology, which is a product of globalization, has seen the emerging economies grow and develop. The interaction of trading activities between different countries has depicted the exchange of technology. There has been radical improvement in the information and communication technology. The improvement in the supply and logistics management system bears a testimony to this fact. Supply chain management has improved due to better technology being imported in a country. The product designs and the strategies used to produce these commodities have improved due to improved technology being employed in the country. Telstra’s value chain has greatly benefitted from globalization. Telstra utilizes advanced LTE Advanced technology to provide fastest mobile coverage and network. The impact of globalization could be seen from the fact that improved and sophisticated technology helped in spreading this technological benefit in other countries. Telstra was able to provide high speed 4G network in Australia. Telstra was able to bring 1800MHz and 700 MHz spectrum bands to increase and provide lightening speed to mobile coverage in Australia (Elms and Low 2013).
Telstra customer care was a major and important participant in improvement in the value chain of Telstra. The company was able to import and export capital technology and in the process improved the knowledge and information system. Global sourcing and outsourcing also depicted the impact of globalization on technology.
Value chain is an important element that a company needs to evaluate and improvise in order to enjoy a competitive advantage. Competitive advantage is the deciding factor about the success and growth of a company. It determines the scope of growth and expansion in the future. In the age of globalization, companies continue to tussle in the global market to attain the crown. In the fierce competition, many small scale industries and companies are growing with the help of interaction with global market. Globalization produces new level of dynamism that is the source of competition among various companies. It requires strategic analysis and planning in order to obtain competitive advantage. Necessary level of efficiency is required in supply chain management to improve the levels in the supply chain and make it effective. Globalization induced companies to devise strategies and approaches and make a conscious effort to enhance the chances in the global and international market. The global giants have to be perpetually involved in evaluating the strategies and methods to be able to be ahead in the race. In the light of these points, it can be evaluated that globalization can open doors for various companies, including the new developing companies to improve their business and expand globally. Globalization can cause the competitive advantage of a company to decrease due to the fluctuating market forces and changing global environment law. At the same time, it can create aggressive competition among companies, with some companies having significant advantage based on various factors. Thus, it can be comprehended that the concept of global value chain needs to be incorporated to increase product and service value and consequently improve the chances of the business. On of the major facts that globalization had raised, is the importance of supply chains for companies to compete with in international market. In the case of Telstra, it was viewed that that globalization had allowed the company to utilize this to it benefits. The company incorporated superior technology to launch a superior 4G network that increased the customer base of the company (McGrew99999 and Lewis 2013). The use of radio spectrum to improve the coverage benefitted the company as it improved the value chain of the company to survive in the global market. Despite the competition from Optus, the company has been able to survive in the global market due to ability to adopt the global value chain. Telstra introduced network leadership in Asia-Pacific to secure competitive advantage. It allowed the company to expand its business and the global network of the company in different countries to utilize the high capacity networks and experience the benefits occurring from globalization.
Globalization has a major influence on finance of a country and consequently the companies as well. Globalization involves the flow of finance through across the boundaries of countries. Globalization positively affects the financial aspects of a company. It helps a company to improve its sources of fund. It promotes Foreign Direct Investment that paves the way for the source of capital for a company. It assists a company to raise funds through equity in international markets. It helps the company to allocate more funds for its operations. On-line trading is allowed at various stock markets. FDI are an importance source for both developed and emerging country since it allows a company to strengthen it earning, which is critical for its value chain. Finance is an important element of the value chain and strong finance structure is the key for success and survival for any company. Globalization allows the companies to utilize the interaction of cross country aspect and improve its financial structures. There are capital flows across boundaries of countries. Telstra has been able to indulge in foreign development investment to improve its earning capacity.
There are major impacts of globalization on the culture. Globalization brings together many cultures in contact with each other. Globalization is the source that is responsible for the growth of technology among people. The growth of social media and other channel owe a lot to globalization. The new method of communication that is present online seems to have a major influence on the mind of the people. These online communication tools are blogs, movies are the forum that is used for debate. Globalization plays a major role in cultural diversity (Banks 2015).
For a business house, it is important that the taste and preference of people are studied and analysed. Globalization affects and changes the taste and preference of people and this us regarded as the major impact on culture. In globalization, there are major influences in the form of cultural interactions between different countries. It changes the demand pattern of people and various changes are seen in taste and preference of people. It brings about a change in the lifestyle of the people. The international organization and the movement caused by them have a significant impact on the traditional culture of a country. In addition to this, it can be viewed that globalization leads to diverse workforce (Crane, Kawashima and Kawasaki 2016). Diverse workforce leads to cultural diversity. Employees from various cultures are a part of the organization. This has a major influence on the value chain of an organization. It makes the human resource management efficient and effective and requires them to handle the workforce effectively and strategically. Major stress has to be laid on the approach and strategies that are employed in managing cultural diversity. Effective remuneration and incentive package has to be given to the employees and proper training program has to be given to employees.
Globalization does have a major influence on the cultural element of Telstra. The current age of globalization has seen many employees from different parts of the world joining the company. This depicted a cultural diversity in the workforce of the company. The human resource management has enacted the diversity and inclusion policy to handle the cultural diversity in the workforce of Telstra. The policy embarked on fair treatment of the workforce. The recruitment, hiring, appraisal and remuneration are made on merit. This ensures fair treatment of employee and increases morale of the policy. It depicts the importance of cultural diversity in the workforce and at the same time highlights the role of the human resource management in the value chain. It works on the concept on global value chain, in order to sustain the competition in globalization.
The next point to see is that Telstra addresses the need and requirement of culturally diverse customers. Even if it addresses the needs and demands of the customers of the home country, it still has to deal with culturally diverse crowd. Thus, it is important for the company to evaluate and assess this point. The company embraces this point. Special emphasis was given on the language of the people belonging to the different and the emphasis on the connotation of words was given to eliminate conflicts and negative image of the company in different companies (Hirst, Thompson and Bromley 2015).
Impact on Human Resource
Globalization has its impact on the human resource of as well. Globalization has caused employees cross boundaries and venture into different countries for employment opportunities. This presents new opportunities and challenges to the human resource management. The human resource is culturally diverse with different work experiences and lifestyle (Lechner and Boli 2014). This throws open various new challenges and tasks for the human resource management. Some of the impacts of globalization on human resource management are:
Recruitment Emphasis on Diverse Workforce
With growing scale of globalization, companies and human resource management have to put special stress on the challenges it has to face in terms of human resource. It has led the human resource management to adopt new strategies and approaches to handle the situation of diverse workforce. The human resource management stresses on appointing and recruiting people from diverse backgrounds. They have to aware of the different languages and cultur followed by the employees. Companies are aware of the value of the benefit of have a diverse workforce since it contributes to better idea and better contribution of strategy formulation. Thus, the human resource management stresses on the importance of having a diverse background (De Backer and Miroudot 2014).
It Emphasizes on the Importance of Professional Development
The human resource management have to adopt a more professional approach so that they help in enabling the workforce in achieving their goals. Proper education and training facilities are provided to the employees, which allow them to harness their skills. This increases the motivation and morale of the employees and consequently it benefits the companies to achieve the goals and increase the profitability index (Sassen 2015).
Application of Different Laws to Safeguard the Interests of the Employees
Different laws and policies are enacted to safeguard the interests and welfare of the employees. The human resource management have to apply such policies and laws, which will promote the interests and well being of the employees.
It is seen that employees and human resource management has a strong correlation and position in the value chain of an organization. Therefore, keeping in mind the concept of global value chain, it is important for human resource management (Goger et al. 2015).
In the case of Telstra, the age of globalization, has lent its significant impact on the human resource management. The company has implemented the diversity and the inclusion policy to acknowledge and appreciate the diversity in the workforce. This would help the company to boast of diversity in the workforce and it would contribute to innovative and new ideas to the company. Fair remuneration and training programs are given to employees and special stress is given on the merit basis recruitment of employees belonging from different countries, ethnicity, caste, creed and religion (Gardiner 2015).
Political and Economic Considerations
Politics circulating a business depends on a specific country and the national government rules and policies. However, with the advent of globalization, it can be seen that the regulatory body and mechanism changes. The cross country transaction introduce the “three sister regulatory body” in the picture. World Bank, International Trading Organization and International Monetary Fund are three regulating bodies that are involved cross country business. Globalization makes the economic and political changes take place at the global level. “Civil society organization” use global communication platform and set up to develop alliances with various foreign organization on a global scale (Baylis, Smith and Owens 2013). World Economic forum and other such bodies have gained importance in the age of globalization. The procurement and logistics aspect has to abide by the rules and regulations. The supply chain management has to be amended by such changes. It has a major influence on the value chain design of a company (Hollensen 2015).
The impact of globalization on the changes in politics has been observed in Telstra. The company has to follow the regulation and the guidelines policies of the World Trade Organization during cross boundary transaction. The financial and annual report of the company highlights the practice of the company in such avenues. The logistics management of the company has been impacted by the rules and regulations of the “Three sisters” regulatory body.
Globalization has major impact on the economy of a country. The cross boundary transactions and dealings have conspicuous effect on the economy. It integrates the economy of different countries. It can be seen that the developing countries reap the benefit of globalization. It results in economic growth and economic development of emerging nations and it assists in reducing unemployment, poverty and consequently raises the standard of living of people. On the other hand it provides the scope of investment of developed economies. It increases the rate of the growth of economy (Fujita and Thisse 2013).It increases the scope of global expansion for the company. Global value chain benefits the economic growth and development of various countries and helps in the growth of many countries. The global value chain controls and impacts on the coordination between the companies and the suppliers.
In the case of Telstra, impact of globalization on the economy has been positive. It has allowed the company to achieve global expansion and thereby achieve high profitability that contributes to the economic growth. The company has established network in Asia- Pacific to expand its business, which is a product of globalization. The organization policies and rules and regulations is based on this. The supply chain activities of the companies has resulted in the increase in the profitability index of Telstra and thereby contributed to a favourable balance of payment for the country, which consequently contributed to the economic growth.
Impact on the Corporate Governance
Globalization has an impact of corporate governance. It gives rise to global governance. The corporate governance and ethics works on a global level. Global governance helps the companies and the countries to formulate common corporate ;aw and ethics, which can be applied globally to safeguard the interests of the stakeholders and make sure the cross country transaction are done in a fair way and it safeguards the interests and welfare of the stakeholders. It promotes ethical practice on a global scale (Hay and Marsh, 2016).
In the case of Telstra, the annual report suggested that the company submitted the sustainability report and followed sustainability practice. It embarked on the point that the company followed the standards of Global Reporting Initiative, United Nations Global Compact and G4 Sustainability Reporting Guidelines. Thus, the company followed global governance standards and the global value chain concept is applied in such cases.
It can be seen that globalization plays a vital role in radical and major changes in the business activities of the countries. It is observed that globalization plays a major role on the value chain of a company. The age of globalization has resulted in the concept global value chain. It can be seen that competitive advantage, financial, economic, cultural and political aspects are affected by globalization, which in turn affects and impacts the value chain. It can be viewed that there are advantages as well as disadvantages with globalization, which affects the value chain of a company.
Antràs, P. and Chor, D., 2013. Organizing the global value chain.Econometrica, 81(6), pp.2127-2204.
Banks, J.A., 2015. Cultural diversity and education. Routledge.
Baylis, J., Smith, S. and Owens, P., 2013. The globalization of world politics: An introduction to international relations. Oxford University Press.
Beck, U., 2015. What is globalization?. John Wiley & Sons.
Crane, D., Kawashima, N. and Kawasaki, K.I. eds., 2016. Global culture: Media, arts, policy, and globalization. Routledge.
De Backer, K. and Miroudot, S., 2014. Mapping global value chains.
Elms, D.K. and Low, P. eds., 2013. Global value chains in a changing world. Geneva: World Trade Organization.
Fujita, M. and Thisse, J.F., 2013. Economics of agglomeration: cities, industrial location, and globalization. Cambridge university press.
Gardiner, B., 2015. Telstra CEO: Don't be afraid of machine learning. CIO, (Spring 2015), p.8.
Gereffi, G., 2013. Global Value Chain Perspective on Industrial Policy and Development in Emerging Markets, A. Duke J. Comp. & Int'l L., 24, p.433.
Goger, A., Hull, A., Barrientos, S., Gereffi, G. and Godfrey, S., 2014. Capturing the Gains in Africa: Making the most of global value chain participation. Duke Center on Globalization, Governance & Competitiveness at the Social Science Research Institute.
Hay, C. and Marsh, D. eds., 2016. Demystifying globalization. Springer.
Hirst, P., Thompson, G. and Bromley, S., 2015. Globalization in question. John Wiley & Sons.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Lechner, F.J. and Boli, J. eds., 2014. The globalization reader. John Wiley & Sons.
McGrew, A.G. and Lewis, P. eds., 2013. Global politics: globalization and the nation-state. John Wiley & Sons.
Sassen, S., 2015. Losing control?: sovereignty in the age of globalization. Columbia University Press.
Scott, A. ed., 2013. The limits of globalization. Routledge.