Globalization and Firm Operating

Subject: Accounting
Pages: 8
Words: 2192
Reading time:
8 min
Study level: College

Globalization has massively affected firms in the current market. Firms are increasingly finding themselves operating in regions that are beyond the borders of their home countries. When doing business in countries other than the home country, it is important to determine when to comply with the host country’s tradition and when to follow other principles not favored by the locals.

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According to Sikula (28), it is important for a firm to understand the business environment of the host country to operate peacefully. There are five main factors that the management should consider in the host country before determining whether to follow the traditions of the locals or to employ traditions that are not favored locally.

The first five factors can be considered in light of the political engagements, the relationship with the customer, and relationship with the employees, relationship with the public and internal management of the firm.

When operating in a country other than the home country of a firm, it is important to understand the legal structure of the country. Witcher (118) advises that foreign firms should try to avoid engaging in any political operations within a foreign country. According to Bradford (88), a firm may realize that the tradition of most business units is to support a given political front. This is a dangerous move because the locals would consider this as partisan.

This practice may help a firm draw a section of the market to its side very first. However, the benefits may not be long-lasting, especially when the side supported does not get to power. Even if this tradition is favored by the locals, it is important to avoid it whenever possible. In this same light, it is important for the management of the firm to ensure that it abides by the local laws. The firm cannot run based on the law of its home country and ignore the local laws. This will help in the smooth running of the firm in the host country.

According to Witcher (48), the relationship between the customer and the firm should be as local as possible. This scholar says that although firms should think globally when planning to offer its customers increased value, it should act as locally as possible when it comes to real engagement with the customers. For instance, the international community encourages equality, and many banks in the west do not have a distinction between male and female customers.

Both genders are treated the same, and the banking halls for them is also the same. This practice is a sign that women and men are equal. However, this may not be the case if a banking institution is planning to operate in the Kingdom of Saudi Arabia. This is because although the Saudi society has come to embrace the importance of empowering their women, they are some religious beliefs that make it necessary to have female banking halls different from that of male customers.

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Bradford (92) says that the Islamic religion does not allow a woman to be in bodily contact with a man who is not the husband or a close relative. This law is highly upheld within this country. This means that if a foreign firm comes into this country from the west or any other part of the world where such restrictions do not exist, it is important to understand the culture practiced locally. When this religious belief is ignored by a foreign firm, the chances are high that it may fail to get a section of or the entire market.

The employees are a very important part of a firm. When operating in a new country, it is important to treat the employees based on the local principles. For instance, when it comes to paying, the payment should be competitive, based on the local’s rates. When managing these employees, it is important to take into consideration their cultural beliefs and practices.

The management should try to avoid contravening their beliefs because this may result in the demoralization of the employees. Once with the demoralized employees, it is not possible to operate in a foreign country with success. The policies should, therefore, be friendly and locally-based.

The public is also a very important component of a firm. When working with the public which appreciates the presence of a firm in their community, it is a fact that the community would try to support the firm. However, when the employees are not welcome with the presence and practice of a firm, they can easily jeopardize its operations and force it out of the market. The policies employed by the firm should be acceptable in the face of the public.

The public should feel part of the firm, and this can only be achieved when the policies are based on local policies. Finally, when it comes to the management of the firm, the management unit may decide to use non-local policies to the extent that it does not contravene the local policies. For the management to answer this question, it must consider the direct consequences the firm will face in the new country when these decisions are made.

Racial equality should be encouraged across all nations. People have different potential and abilities, and that is why all people irrespective of their race should be allowed to contribute and demonstrate their expertise in various fields. According to Witcher (78), a nation that is aspiring to advance in whichever field should strictly avoid incidences of racial inequality and encourage a multi-culture society for the benefit of all people.

Globally, racial discrimination has been in existence since time immemorial. People of certain races in a nation are discriminated against in many incidences. Racial discrimination is still found in learning institutions, employment, entertainments, games, and many other institutions. Sikula (29) argues that the issue of racial discriminations has cost the economy of many nations, and it is a vice that should be fought and eliminated from society at all cost.

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This scholar points out that nations should learn how to appreciate and embrace cultural diversity to fight this vice. Currently, many nations have joined hands in eradicating racial discrimination. Many nations have succeeded to some extent in lowering the levels of racial discrimination. Although this is the case in many countries, much needs to be done concerning racial inequality.

The United States of America has also demonstrated some serious fight against racial discriminations. For example, they have the first black American as a president. However, there are still some elements of racial discrimination in this State. In some Incidences the whites like in employment, schools, discriminate against the black Americans and in other institutions, the whites are more favored.

The best learning institutions are a preserve for the whites while the poor and low-level learning institutions are for the blacks. However, the United States is progressing on well in fighting racial discrimination though there is still much to be done for their efforts to yield fruits.

When hiring employees in any firm, the management should carefully consider the issue of racial equality. As said earlier, people have different expertise, and those with the best requirements for any opportunity should be given a chance irrespective of their race or culture. It is obvious that any firm that is hiring employees will go for the best candidates to fill the intended positions.

Hommel (38) says that the world market has become very competitive and firms, therefore, should be in a position to recruit competent employees to march with the competitive market. This implies that what firms need is an employee who is competent and qualified enough to meet the increasing demand for customers in the world market.

For the industrial manufacturing company that is looking for a candidate to fill an accounting position, it is recommended for the firm to go for the best and most qualified individual. The minimum requirement for this position is 3.5 GPA, meaning that any candidate with a 3.5 GPA and above meets the qualification. Therefore irrespective of race or culture, the most qualified candidate comes from, will be picked to fill this position.

Although these two candidates, Frank and Bernard meet the qualification, this firm will go for Frank, who is the most qualified. Frank is more qualified compared to Bernard, and for this reason, he stands in a better position to fill this vacancy. He is chosen not because he is white and Bernard is black, but it is because Frank has more qualifications meaning his contribution to this firm will be prudent.

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Therefore, without any issue like racial discrimination, this candidate, Frank, qualifies to work with this firm for the accountant position. The firm will, therefore, be justified to explain to Bernard that although he meets the requirement for the position, he is denied the position in preference for Frank, who is more qualified. Based on this argument, Bernard will be satisfied and will let the position go to Frank without any form of complaint or claim.

However, a firm in some occasions may be forced by various circumstances to pick a second best-qualified candidate. In this case, this firm may opt not to pick on Frank, a white which is the best for this position and chose Bernard, a black and lesser qualified than Frank.

One of the reasons why this firm may go for this choice may be due to the need to encourage multiculturalism in the organization. This firm, for example, might be having many employees who are whites and wants to accommodate cultural diversity by employing non-white employees.

For this organization not to portray some kind of racial discrimination against the blacks, it may choose to pick Bernard a black and who lesser qualified than Frank to fill the position. This choice will build the image of this firm, as it will come out, as a company that is fair and does not favor the whites while discriminating against the blacks. This is a valid reason that can be used to reply to Frank’s objection by this firm.

It is a fact that most managers in some parts of the world still prefer to hire men or to put them in positions of authority as opposed to women. One such country is Saudi Arabia. In this country, women are still considered as inferior to men in various fronts. As such, many business units prefer hiring women. As can be witnessed in this case, it costs more to hire women than to hire men. Chances are also high that men would give better output than women.

For this reason, most business units in this country prefer hiring men. However, the move by Schwartz in support of hiring employees irrespective of their gender is very important. Schwartz’s argument is that hiring should always be based on the qualification and competence of the employee and not their gender.

This scholar argues that the belief that women cannot perform as good as their male counterparts is just a perception in the minds of the locals. This is because of what has taken place in other parts of the world. Margret Thatcher of Britain remains one of the greatest prime ministers that the United Kingdom has ever had. Indira Gandhi and Condoleezza Rice are some of the women who have proven that there are no limitations for women when it comes to success as long as they are given a chance.

It is, therefore, important to stop considering the sex of the employee when hiring. In Saudi Arabia, an employee may be tempted to hire men because of their low cost and high productivity. However, this is a move that should be taken by a business unit focused on quick short-term gains.

However, when it comes to long term benefits, the focus should go beyond the future of the market. It is apparent that society is slowly appreciating the fact that women can be just as successful as their male counterparts when given this opportunity. For the first time since its inception, the government of this kingdom nominated a woman to serve in the cabinet. These changes indicate that the country is fast, embracing the need to ensure that sexism is eliminated.

When hiring employees, Hommel (119) advises that a firm should try to ignore sexism to gain a competitive advantage. It is a rational move to hire an employee who costs more if the output he or she will bring to the firm is also more. However, it will be considered irrational when a firm employs an individual who costs more but with a relatively lower output.

It is only under special occasions that a firm should consider that move, and the rationale behind such a decision should be an increased benefit in the long run. For instance, Ellen Moore should only be employed under the current circumstances because there are no other qualified candidates.

When there are qualified candidates with the capacity to give better output, Ellen Moore can only be chosen when the management is assured that her presence in the firm will bring a positive image. Her presence in the firm would, therefore, go beyond the simple desire of increased output.

Works Cited

Bradford, David. Reinventing Organization Development: New Approaches to Change in Organizations. Hoboken: John Wiley & Sons, 2005. Print.

Hommel, U 2012, The strategic CFO: Creating value in a dynamic market environment, Springer, Berlin.

Sikula, Andrew. A New Theory of Management, Ethics and Behavior2001

Witcher, B 2010, Strategic management: Principles and practice, Cengage Learning, New York.