Challenges of Globalization Print E-mail

Indicators of globalization -- the expansion and integration of cross-border activity -- show a steady increase over the past decade.  And two-thirds of CEOs expect the trend to keep on rising between now and 2009, fueling over 60 percent of the growth for their companies.  International organizations, from public to non-governmental, are also expanding their footprints abroad.

Barriers to business

Key obstacles to cross-border business But after businesses and IGOs cross borders, they are confronted with a new set of organizational challenges, including how to

  • Work effectively across widely distributed locations.
  • Be current with local market intelligence; in other words, avoid costly surprises.
  • Find ways to use cultural and geographical diversity as organizational strengths, rather than barriers.

Meeting these challenges is not easy.  It's no surprise that successful integration still occurs mainly within regions that are culturally, legally, and geographically closest to the home location of most organizations.

Obstacles to tackling the challenges

We find that many organizations also stumble in tackling some of these challenges because they use a mix of the following approaches:

  • Polarized: Organizations tend to cluster key activities in either the HQ or field/branch offices, instead of developing integration processes.
  • Ad-hoc: Organizations tend to not anticipate cross-border issues, but deal with them on an ad-hoc basis as they arise.
  • Investment-heavy: Organizations tend to "throw money at the problem," as one high-level executive told us, frustrated with integration effors of his global marketing division.
  • External-focused: Organizations tend to rely disproportionately on external expertise, instead of a longer-term strategy to build its internal capabilities for integrating cross-border processes.

Read more >> What makes organizations sucessfully integrate cross-border activity?

Read more >> What are Red Bridge Strategy's specific offerings?