Business Strategies Between Regionalisation And Globalisation Commerce Essay

The global market is a tough nut to crack. A company or an organisation must be competitive enough in order to penetrate this market. Today’s competition for business supremacy has always been a battle. It’s a battle on who will be the best, a battle that the end winner will be determine by the organisation’s ability to compete against other competitors. Competition is like a bottle neck road, who ever goes in first always have the advantage against the other. Because the domestic and international market undergoes a never ending phase, an organisation must be capable to adapt to these constant changes. A company’s capacity to change should be given consideration. Discrepancy between an organisation capacity and the demands of its customers results in an inefficiency, either in under-utilised company resources or unfulfilled customers. Maybe, most of the organisations today want to initiate a management system and strategy that could maintain the organisations’ capability, strength and competitiveness. And this is important for the management teams and the organisations per se that they would always be open minded for changes that they might encounter in order to cope and adapt to the latest development that are happening within and outside their environment. Businesses are continuously evolving just to maintain progress and being competitive. However, being competitive in international business arena should conform to the concepts in international trade such as globalisation and regionalisation.

Globalisation and regionalisation are concepts known in international trade and businesses. These concepts are always attached in describing transactions done in international business arena. Basically, this paper, will be assessing the paper of Proff (2002) entitled “Business unit strategies between regionalisation and globalisation”. In his paper, Proff, (2002) argued that Regionalisation do not actually opposed the concept of Globalisation. Regionalisation does not create or build blocks towards globalisations. From the results of his assessment using the so-called cluster analysis, he justified that Regionalisation especially to those outside the triad-markets was actually creating a path towards grasping the idea of Globalisation- an “open” regionalisation.

Assessment

From the presentation of Proff (2002), he identifies that globalisation has lowered trade barriers in different economies making it easier for investments to flow across markets. Through benefiting from involvement in other economies the flow of capital from one economy to another intensified. Access to raw materials and resources, cost savings from lowering labour and operating costs, and expansion to other markets prove the benefit for investors when engaging in foreign investments. Basically, globalisation and trade reform are credited with improved income growth and poverty reduction in much of developing world. Empirical evidence points to the growth-inducing effects of open economies, where long term growth is like the rising tide, lifting all the boats, including those of the poor. Reality, however, is often more complicated. As described in the paper of Proff (2002), many organisations especially to those outside the triad-market have not reaped the perceived benefit of globalisation but instead considering the advantage of regionalisation.

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Apparently, regionalisation via membership to trade organisations as shown in the paper of Proff (2002) and market integration has also made international trade appealing. As describe, the concept of regionalisation establishes long-term interests with expectations of high returns on investment. Furthermore, national governments who lost control of the traditional means of promoting local competitiveness by lowering trade barriers and exchange rate policies have allowed competitiveness to diminish in importance. Basically, governments turned to consider international trade as a means of improving their economies which was actually seen and based from the perspective of investors and recipient firms and economies.

Actually, regionalisation can be characterized process on the regional stage with the assistance of governments. These regional consideration shows to be the express result of governmental exploits initiating regional trade administrations and making deeper assimilation of detach economies on the regional height. Regionalisation is a fresh occurrence. As described by Proff (2002) in his paper, regionalisation conforms to the intensification of investment and intra-regional trade, each suggest a procedure of ‘deeper’ behind-the-border industrial incorporation. Within this course of regionalising economies liberalisation is seen as a power that assists in guiding the people and economies resources into actions where they are most expected to stand out. In basic assumptions, regionalisation materialises as a power that alleviates the outcomes of globalisation by pooling governmental policies and also pays off for the loss of national policy sovereignty. But as justified in the paper of Proff (2002), regionalisation does not actually alleviate the outcomes of globalisation but instead it guides the organisation to grasp globalisation process. This creates regionalisation as a training ground or an arena for an organisation to learn the context of globalisation even though the organisation was outside the triad-market.

Basically, the notion of region as an arena for the development of learning organisation is a complex concept. Relatively few cases of actual development are thoroughly researched, and most of the research done on “the learning region” in general does not focus on work organisation. What can be seen, however, from the cases that have been made subject to research, is that although one may talk about regions they are much smaller than the configurations generally associated with this notion.

There is a need either for a multi-level notion of region or for another concept that can cover units that can function as a context for the development of learning organisation. So far, the concept of “learning region” may be the best option since it indicates that not any region falls under the concept but only regions that fulfil certain requirements. Another possibility is “territory”, but this concept may be seen as somewhat too geographical. On the other hand, it may not be a need for a sharply featured concept. The units that seem best able to promote learning organisation may be seen as end points on a scale where most real situations will occur in between; they will have some element of learning region but not all and will show variations in their ability to promote learning organisation. At the moment, the notion of learning region functions first and foremost through its ability to draw attention to the need for a democratic order with the ability to generate trust as the core condition for learning organisation. It is even possible to turn back to some of the historical cases and reinterpret them in the light of this point.

As justified in the paper of Proff (2002), the notion of regionalisation was actually a good training ground or learning arena for considering the idea of globalisation. The internationally most well known example of systematic efforts to promote learning oriented forms in a large industrial corporation may be the Swedish automobile producer Volvo, a development that occurred during the two decades when Gyllenhammar was chief executive (Graehl, S., Fiumlchtner, & Rentz, 2002). With its many plants and numerous managerial hierarchies and expert groups, its co-operation with unions and employees and its broad use of research and consultants, Volvo fulfilled many of the characteristics of a learning region (Graehl, S., Fiumlchtner, & Rentz, 2002). In line with the single company, however, the efforts to spearhead this kind of development came to an end with the retirement of Gyllenhammar. In most cases management driven change lasts for much shorter periods of time. With placing the learning region in focus the intention is, consequently, not only to introduce a new reference point for organisation development in addition to the individual enterprise – or for that matter units within each enterprise, such as groups or departments – but also to point at the shortcomings of some of the established ones.

Basically, Graehl, S., Fiumlchtner, & Rentz, (2002) argued that the kind of drift towards regionalisation indicated above can be se seen as an example of a tendency that has acquired major proportions on the international scene: in some form or other “regionalisation” occurs in major parts of the world today. Against this background it is important to emphasise that this kind of process occurs for many different reasons and that the reasons underlying the above examples are only some of those that are operative within this area. It is also important to emphasise that far from all processes towards regionalisation have anything to do with work organisation. Furthermore, the reasons are not new in the sense that they have been emerging only in recent years. When the movement towards learning oriented forms of work organisation started with field experiments and other cases, a process of “bottom-up” learning was introduced and the challenges posed by such a process are dominating the agenda today as in the period immediately after the first experimental changes. What differs is first and foremost the view on how bottom-up learning can take place. For a long time the idea that single cases could be abstracted from their contexts and provide a basis directly for learning processes involving many organisations was maintained. Actually, what happens today is first and foremost a break with these perspectives to instead build the learning processes bottom-up without shortcuts.

What this implies varies, between countries and even regions. New demands are placed on all the actors involved and how well they are met today and will be met in the future differs as well. One of the challenges is to handle the notion of learning region as an evolutionary phenomenon, often emerging from a smaller group of actors, growing through network formations and eventually including political-administrative actors. From this platform the growth can continue into formations where several units join each other to form broader regions. Fixed boundaries and given administrative dividing lines will block this kind of development. Learning regions will have to be defined according to the learning process and this has in itself fluid boundaries.

From this assessment, it is evident that business operations across national borders are becoming the trend in the current era. And this trend continuously grows because of globalisation and regionalisation. In response to this globalisation and regionalisation issues, multinational corporations tend operate in other countries to have excellent advantage. According to Amponsah (2001), globalisation or regionalisation whether it is in or out the triad-market but the eagerness of a certain business organisation to operate across borders was there it always involves two dimension i.e. change in economic operations of various countries, and change in the participants of global economic operations.

Conclusion

In the development of globalisation and regionalisation are closely related and often interact. Of course, one could argue that “the market”–in other words, effective competition–should be the sole determinant of providers’ attitudes toward customers, in particular the services to be supplied and to whom and in what quantity. Then, a situation would develop where only competition authorities intervene, because the sectoral regulator would have disappeared from the scene. From the previous discussion, regionalisation in accordance to organisations’ competitiveness continues to be regarded as a major element of economic reforms in most countries. In the majority of developing countries, it is an important component of the structural adjustment package sponsored by multilateral institutions. It has become geographically more widespread and has increasingly involved the telecommunications, energy and water sectors. Foreign investment linked to liberalisation has also become more prominent in developing countries. However, while regionalisation can bring about benefits under certain conditions, transfer of ownership is by no means a sufficient condition for improved performance of firms and setting off economic growth. In other words, if regionalisation with respect to competitiveness is to benefit the organisations, the challenges facing these organisations have to be properly identified so as to inform policy makers and the necessary actions have to be taken to overcome them.

In addition, the governments must regularly inform the public about the goals of competitiveness and regionalisation and explain how achieving these goals benefit their citizens and nations. Governments must also carefully analyse the political impediments to investment liberalisation and must develop plans to eliminate them. Introducing more market competition and effective state regulation may be crucial in ensuring that economic performance improves. In addition, a wider range of institutional issues, including improving political, legal, management and financial capacity within organisations will affect the impact of regionalisation on performance when regionalisation occurs in organisations outside the triad-market.

With respect to globalisation, liberalisation and openness should be promoted which will in turn promote market discipline, competition, better corporate governance and public accountability. Disciplined and prudential regulations should be introduced in the financial sector where incomplete liberalisation has taken place. This can help prevent the continuation of state directed credit to funds, which often lead to misallocation of resources.

In conclusion, the development of globalisation or even regionalisation faces several obstacles & challenges which all have to be tamed by countries’ governments before substantial benefits can be realised. It is worth noting that competition law can improve economic performance but performance improvement heavily relies also on other structural reforms like liberalisation and regulation and the ability of developing countries to overcome the numerous challenges that they face during the investment liberalisation process.

From here, the different strategies in different markets especially to those considering the international market helped the organisation have an initial feel of the different markets. The different strategies also helped the organisation have a better understanding of how the market works. The different markets help in introducing to the organisation the cultures and characteristics of the markets thus it became educated with how to adjust in the different setting. Lastly, the different strategies helped in making sure that the organisation encounters lesser problems while starting up a new market. By using different strategies with proper consideration towards globalisation and regionalisation, the organisation has not committed anything that will give it more problems.