Globalization and its organizational challenges

Increasing business margin and therefore a company’s profit is essential for every organization with the target of maintaining existing business and/or developing new business. Economic globalization is driving our complex world and is finally the key to strengthening competitiveness by lowering production costs and gaining new customers in new markets, in order to ensure a company’s sustainable existence, growth, and future. Organizations are challenged to learn about new markets and to adapt to their new environments and cultures.

Particularly within the IT-industry, globalization is easier lived than in any other industry. Technology makes it possible to get connected to any business partner. By using the Internet and communication services, people can work from any place around the world. To collaborate with foreign organizations enables a company to reduce costs and focus on own core competencies on the one hand, and on the other, it is a way to build up competencies needed to enter into a new market.

Structure follows process, follows strategy

Selecting China as the targeted market to work with is always triggered by strategic decisions. To implement new strategic directions, business processes and structures have to be adjusted, which can lead to organizational challenges. Finally resources, particularly human resources, are needed to transact a “China Collaboration” strategy successfully.

The ongoing economic growth in China is the evidence for a good strategic decision and investment, enabling foreign companies to establish sustainable growth and international positioning while optimizing profits. The heaviest burden to exchange with China and the risk perceived, is a lack of knowledge about the general environment, e.g. its political system and government regulations, culture, business acumen and language. We are acting in this area to help our clients overcome those burdens and to minimize their risks.

Author: My Kiet Truong