Global Strategic Management in the Business World Research Paper

Global Strategic Management in the Business World - Research Paper Example   One of the major myths prevailing in the organizational world until recent times was that if a company wishes to be a global corporation, it does need to locate in every continent or at least in American and European continents. However, such beliefs have been changed in recent times. It is illogical to argue that a company should invest even in unprofitable continents to know as an international company or global corporation. In order to become a global company, a company should invest only in profitable continents. â€Å"Global business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations. These transactions take on various forms, which are often interrelated† (Czinkota, et al., 2004). However, it is not necessary that the business should be established in all continents to label it as a global business. For example, the majority of the American and European companies are currently trying to establish manufacturing units in India and China as a cost reduction strategy. It should be noted that India and China are the most heavily populated countries in the world at present and these countries have abundant skilled manpower. At the same time, the manpower shortage is a big problem in America and Europe. In other words, America and Europe are expensive labor-oriented regions whereas Asia is a cheap labor-oriented continent at present. Since the international market is heavily competitive, all companies are currently looking for the cost reduction strategies as far as manufacturing is concerned. It is impossible for American and European companies to manufacture goods in their own territories and compete effectively with Indian or Chinese companies in the international market. Therefore the majority of these companies are currently establishing manufacturing units in India or China. For example, Apple, Ford, BMW, Benz etc are some companies which have ma nufacturing units in India or China. In fact, these companies are manufacturing their products in India or China and exporting them to the overseas market. The Indian city of Bangalore is famous for outsourcing business. Plenty of American and European IT companies are currently operating in Bangalore in order to exploit the cheap labor and IT skills of the Indians. Microsoft and IBM like companies have business units in Bangalore. It is illogical to ask these companies to establish the business in Antarctica or Africa to achieve global status. Instead of globalization, modern companies are thinking about glocalization. â€Å"Glocalization encourages companies to â€Å"think global, act locally†, and they could do so by using the global brand while localizing certain elements of that brand in order to suit a particular country†(Luigi & Simona, n.d., p.1).