Please enable JavaScript.
Coggle requires JavaScript to display documents.
B207 Week 15 Session 9: Does Globalisation allow for convergence or…
B207 Week 15 Session 9: Does Globalisation allow for convergence or divergence?
9.1 The emergence of 'global culture'
Globalisation has allowed larger distribution of best business practices for organisations, consequently allows for more scrutiny.
impacts innovation as organisations are able to see how other organisations operate, and copy each other or come up with new/better ideas
created a 'global culture'
Convergence = international organisations unite on similar successful practices and values
Divergence = when an international organisation follows internal or local culture/practices primarily
can create innovation
organisations must decide whether convergence or divergence is most appropriate for them
global culture influenced by history
in particular historic Colonisation = rich north, poor south. Influences what is adopted
9.2 The shrinking world of organisations
increased availability and sharing of knowledge
organisations can observe and adopt best practices of other international organisations
inequality in distribution of knowledge leads to uneven power and influence
existing inequality results in organisations within the developed world with more power
organisations must consider what aspects of 'global culture' would be beneficial and appropriate for them to adopt NOT just follow blindly
internationalisation creates internal organisation pressure to standardise practices
organisation must by dynamic to survive being global (to cope with sudden changes such as politics etc)
"knowledge is now increasingly global in its availability' and reach" (Archibugi and Lundvall, 2001)
"Some countries and therefore organisations, have great access and ability to use global knowledge to their advantage than others" (Grossman and Helpman, 1993)
"The rise of a global culture coincides with the prevalence of transnational corporations" (Dicken, 2007)
9.3 Innovation and comparison
"there is a strong need for organisations to adopt a culture of comparison" (Dibben et al., 2011)
organisations must compare themselves to others and adopt best practices
requires a clear understanding of their own strengths and weaknesses + good understanding of the global culture to evaluate relevance and effectiveness
"this entails being able to understand this global culture, where it is headed and how ones own organisation fits within these changes" (Bisley, 2007)
Human Resources Management (HRM) often lead this learning and implementation
Strengths: attracts diverse workforce + innovation from cultural differences
Limitation: smaller companies often copy larger companies rather than innovate even without considering effectiveness or ethics
9.4 Convergence and Divergence
"It remains an influential and to some degree dominant way for organisations to respond to globalisation" (Williamson, 1996)
"It means adopting the standards and ideas of an international culture" ( Drezner, 2001)
"This could range from marketing to operations to internal governance" (Pascal and Maguire, 1980)
Convergence
= adopting a global culture (adopting prevailing global practices and standards - ou quote)
best practices can be learned from each other
benefit from new innovation in global thinking
pressure to adopt unsuitable practices
Divergence
= maintaining own organisation or locations culture/practices (conforming to parent company -ou quote)
not all global practices are appropriate
can prevent innovation or improving standards
capitalise on local conditions and standardise own organisations practices (OU quote)
can become change averse
(In reference to divergence) " the conventional view is that this hinders the ability or organisations to 'converge' on best global practices" (Lundvall and Tomlison, 2000)
Factors to consider when deciding to converge/diverge. can use PESTLE framework. (Political, economic, social, technological, legal, environmental) issues. must consider these through global lens
HRM influential in convergence/divergence decisions
internal and external pressures influence this
internal example - parent company culture too strong and not open to global ideas
external example - more powerful organisations/national pressures force adoption
case study:
business functions affected:
convergence: production & trade, foreign direct investment on processing and retail, global food advertising and promotion
divergence: marketing to different populations based on class and demographic
convergence/divergence = impact public health, socio-economics and broader public behaviour