A look at Globalisation Issues
Challenges posed by Globalisation
1. There is a problem of overregulation. For example some clauses of Sarbanes-Oxley act and clause 49 of the Sebi act is being felt by the Companies to be over restrictive. There is a cost of compliance to be borne by organisations.
2. Trade barriers , protectionism : Some countries try to protect their domestic organisations and industries by way of subsidies, high custom and excise duties and other covert or overt ways.
3. Political instability or coalition government may make globalisation and liberalisation a policy specific to a particular political party and some other party when come to power may not support it or may reverse the decisions of a previos government like in India.
4. There may be social issues which may affect privatisation. Labour unions may not support opening up of various industries to foreign competition.
5. Only cost cutting is not going to make domestic organisations competitive. Various other proactive measures and strategies are required to achive growth and profits.
6. Level of complexity of business has increased. For example a foreign company wanting to invest in India finds that the regulations, law and culture of the market is so diverse that it is very difficult to continuously keep performing profitably as well as growing consistently.
7. Companies must constantly innovate and introduce new products according to the market expectations.
8. Poor or unfair legal system is also supposed to be a hinderance in setting up shops in host countries.
9. IPR issues also figure frequently. For example 90% of software use in India is pirated which hurts the American business returns. Countries should abide by each others IPR laws.
10. One way to deal with compleaxity is to keep the business operations simple which can be achieved through continuous business process reengineering. (BPR)
Take my advice ," First grow in your home country , venture out with a full kitty".
1. There is a problem of overregulation. For example some clauses of Sarbanes-Oxley act and clause 49 of the Sebi act is being felt by the Companies to be over restrictive. There is a cost of compliance to be borne by organisations.
2. Trade barriers , protectionism : Some countries try to protect their domestic organisations and industries by way of subsidies, high custom and excise duties and other covert or overt ways.
3. Political instability or coalition government may make globalisation and liberalisation a policy specific to a particular political party and some other party when come to power may not support it or may reverse the decisions of a previos government like in India.
4. There may be social issues which may affect privatisation. Labour unions may not support opening up of various industries to foreign competition.
5. Only cost cutting is not going to make domestic organisations competitive. Various other proactive measures and strategies are required to achive growth and profits.
6. Level of complexity of business has increased. For example a foreign company wanting to invest in India finds that the regulations, law and culture of the market is so diverse that it is very difficult to continuously keep performing profitably as well as growing consistently.
7. Companies must constantly innovate and introduce new products according to the market expectations.
8. Poor or unfair legal system is also supposed to be a hinderance in setting up shops in host countries.
9. IPR issues also figure frequently. For example 90% of software use in India is pirated which hurts the American business returns. Countries should abide by each others IPR laws.
10. One way to deal with compleaxity is to keep the business operations simple which can be achieved through continuous business process reengineering. (BPR)
Take my advice ," First grow in your home country , venture out with a full kitty".
posted by Rajeev @ 12:28 AM
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