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1 Definition Globalization is defined by the worldwide movement toward economic, financial, trade, and communications integration. Globalization implies opening out beyond local and nationalistic perspectives to a broader outlook of an interconnected and inter-dependent world with free transfer of capital, goods, and services across national frontiers. However, it does not include unhindered movement of labor and, as suggested by some economists, may hurt smaller or fragile economies if applied indiscriminately. 1.2 Effects The effects of Globalization exert intense influence on the financial condition as well as the industrial sector of a particular nation. Globalization gives birth to markets based on industrial productions across the world. This in turn, widens the access to a diverse variety of foreign commodities for consumption of the customers, owing to the marketing strategies undertaken by different corporations. In the world economic arena, Globalization facilitates the formation of a common worldwide market, on the basis of the liberal exchange of both cash and kinds.
As far as Political Globalization is concerned, it helps in the formation of a world government to normalize the existing interactions among countries. It also ensures the rights emerging out of Economic and Social Globalizations.
Promotion of liberal trading activities is perhaps the greatest contribution of Globalization, acting as a boon to the world economy. Following are the advantages enjoyed by countries engaged in mutual free trades :
Notable 2 . Globalization has played a major role in export-led growth. and utilizing global communications technologies such as voice-over IP (VOIP). The last few years have seen an increase in the number of skilled professionals in India employed by both local and foreign companies to service customers in the US and Europe in particular. expand their workforce with minimal investments. As a new Indian middle class has developed around the wealth that the IT and BPO industries have brought to the country. Globalization in India has allowed companies to increase their base of operations. and provide new services to a broad range of consumers. Synchronization of intellectual asset laws across most states are subject to additional restrictions. abolition or synchronization of subsidies in domestic trades Decrease or abolition of every kind of tariffs However.Considerable reduction in the cost of transportation. especially with the development of containerization with respect to overseas ocean shipments Decrease or abolition of control over capital and the capital market Formation of free zones for carrying out commercial activities. against payment of little or no tariffs at all Decrease. a new consumer base has developed. email and the internet. This means that the patents granted by a particular nation will by recognized in another country. international enterprises have been able to lower their cost base by establishing outsourced knowledge-worker operations in India. Taking advantage of India¶s lower cost but educated and English-speaking work force. leading to the enlargement of the job market in India. The process of globalization has been an integral part of the recent economic progress made by India. International companies are also expanding their operations in India to service this massive growth opportunity. the concept of free trade emerging from Globalization suffers from limitations as well: Restrictions imposed on the supernatural identification of intellectual properties. One of the major forces of globalization in India has been in the growth of outsourced IT and business process outsourcing (BPO) services.
and a small group of managers remains to carry on the struggle without sufficient resources. sometimes decades. First. so products and supply chains must be radically redesigned to cut costs.examples of international companies that have done well in India in the recent years include Pepsi. and Samsung. LG Electronics. Inevitably. From steel to Bolly-wood. top management's attention then wanders off to the next big thing. with the CEO and senior executives flying in to announce an investment without thinking through the commitment required for success. prices are substantially lower there.3 How do successful multinationals approach India? Foreign companies have been active in India for years. whose products have been well accepted by Indians at large. for instance have built businesses with more than $1 billion in annual revenues in just a few years. Second. Indian companies are rapidly gaining confidence and are themselves now major players in globalization through international expansion. large companies entering the Indian market have opened up many profitable opportunities. 1. the successful companies have adapted their businesses to local conditions rather than forcing foreign models on India. In general. and Kentucky Fried Chicken. By simply increasing their base of operations. One of the biggest mistakes is treating the country as the 'flavor of the month'. from cars to IT. Coca-Cola. Successful foreign companies in India share three characteristics. Successful companies also assemble 3 . they have invested for the long term and made a strong organizational commitment by assigning senior managers to work with established local teams.Hutchison Whampoa. and providing services to a broad range of consumers. Indian companies are setting themselves up as powerhouses of today¶s global economy. McDonald¶s. expanding their workforce with minimal investments. Globalization in India has been advantageous for companies that have ventured in the Indian market.
Unit prices are low. created a new category for personal hygiene products and expanded the market considerably by offering single-use sachets of shampoos and other soap products. for example. Hindustan Lever. can be a source of long-term advantage. 4 . when implemented well.national third-party distribution systems to bypass fragmented local ones. but prices by volume are higher than those of larger-sized packages. This model. multinationals that succeed in India help to create and shape the market. Finally.
Network and Hardware support and Business Process Re-engineering. Omnitech is a premier Software Development and Consulting Services provider located in the Washington D. and Intel they are able to deliver contemporary solutions.S. Citrix. to prevail and prosper in the competitive digital age. Value-added solutions that help organization achieve higher efficiencies. Technical Support.1 Who is OMNITECH? Omnitech is an ISO 9001-2000 certified company committed to empowering global business and industry with leading-edge software and world-class support. they have evolved into a Managed Service Provider par excellence.Chapter 2 Welcome to OMNITECH SYSTEMS 2. Microsoft. Infrastructure Management and Disaster Recovery . These include Performance Management. Omnitech has grown significantly which can be attributed to a high level of client satisfaction and the dedicated and relentless efforts of a highly motivated team of professionals. VERITAS. Omnitech has been able to achieve this feat by employing professionals who have versatile experience in the field of Information Technology. Since their inception. Software Consulting. APC. Keeping in perspective with its goal of "Integrating Human Dimension with Technology". Metropolitan area. Remote Management. Oracle. HP. Cisco. CA. with competencies related to Business Continuity and Availability. Omnitech was established in 1999 as a minority-owned small business by professionals who had gained diverse experience in the field of Software Development and Software Consulting for fortune 500 companies.C. Services provided by the company encompass the broad spectrum of information management in the areas of Software Development.not to mention Software Development and independent Software Testing. They build custom-fit solutions for leading international and U. Through alliances with world leaders like IBM.-based organizations to drive 5 .
To this end. 2. they have partnered with a number of companies to develop solutions that integrate human dimension with technology.2 Business Availability & Continuity Services Infrastructure Management Remote Management Facilities Management Monitoring Technical Helpdesks Datacenter Management Technology Services Strategic Consulting Independent Testing Performance Functional Automation Training Application Management Managed DR DR Consulting DR Solutions Workplace Recovery Availability Services Enterprise Solutions System Integration Server Consolidation 6 .performance and ensure success. Their solutions provide the best tools to help employees get the best results.
but it can also be frustrating and fraught with uncertainty. the U. Because no matter what technology a company may posses. 2. or not say. to start a conversation off right? Are there cultural taboos you need to be aware of? Building connections with people from around the world is just one dimension of cultural diversity. and developing strategy. This means that people of different cultures find themselves working together and communicating more and more. This is exciting and interesting. Hofstede Identified four important dimensions of national culture. to which he later added a fifth dimension long term orientation (1991). Geert Hofstede will give Omnitech the 'edge of understanding' which translates to more successful results. and concern. You also have issues like motivating people. anxiety. uncertainty avoidance and masculinity/femininity. Wishing to set up a subsidiary company in India. But most important. structuring projects. the culture differences must be taken into account first.S. based Omnitech must take a number of factors into consideration. 7 . this information should reduce their levels of frustration. Once the culture is understood.Connectivity Solutions Migration Solutions 2. power distance. their people are the most important assets. Omnitech will have better understanding of the people and they will be able to effectively manage their Indian Human Resource. If understood and applied properly. namely individualism.3 Omnitech and India Technology has brought the world much closer together. How do you relate to someone of another culture? What do you say. Before the Human Resources issues are taken into consideration.4 Using Hofstede¶s Cultural dimensions on India Omnitech can use Geert Hofstede's (1980) research to give an insight into the Indian culture so that they can be more effective when interacting with the Indian people.
quality of life. Power distance The appropriateness of power/authority within the organizations SMALL POWER DISTANCE Individuals assess authority in view of its perceived rightness or their personal interests WEAK UNCERTAINITY AVOIDANCE Positive response to change and new oppertunities Uncertainty Avoidance An emotional response to uncertainty and change. Hard work. Collectivist Interest of the group takes precedence LARGE POWER DISTANCE Authority is inherent in one s position within a hierarchy. the interests of the group. and Self Less emphasis on hard work image The extent to which members of a culture adopt a long term or a short term outlook on work and life Source: Adapted from Griffin and Pustay (1996) The table on the next page shows the difference between the scores of cultural dimensions between the USA and India 8 . STRONG UNCERTAINITY AVOIDANCE Prefer structure and constant routine MASCULINITY FEMININITY Masculinity/Femininity Value material Possessions.Fig 1: Hofstede¶s five dimensions of culture INDIVIDUALIST The interests of the individual take precedence Individualism Relative importance of the interests of the individual vs. welfare of others LONG TERM LOOK SHORT TERM LOOK Long term orientation Value dedication. Social relevance. money and assertiveness What motivates people to achieve different goals.
compared to the world average of 65 and USA. with 81% of the population practicing that religion. and all others within the last 5% of the society. The population may have fewer rules and regulations with which to attempt control of every unknown and unexpected event or situation. however the large power distance score indicates that the attitudes still remain. It may also generate a more competitive and assertive female population.Table 1: Scores of cultural dimensions between USA and India ( COUNTRY INDIVIDUALISM POWER DISTANCE 91 48 40 77 UNCERTAINITY MASCULINITY USA INDIA 46 40 62 56 Source: Adapted from Hofstede and Hofstede 2005 The Geert Hofstede analysis for India shows a large power distance society and all other measures are relatively moderate. Next is Muslim at 12%. India has Masculinity as the third highest ranking Hofstede Dimension at 56. India's lowest ranking Dimension is Uncertainty Avoidance (UAI) at 40. The traditional caste systems has been outlawed. the greater the gap between values of men and women. This would be indicative of the fact that India is in the midst of change. Christian at 2%. On the lower end of this ranking. 9 . India is predominantly Hindu.s 46 . The higher the country ranks in this Dimension. This condition is not necessarily subverted upon the population. with USA at 62. as is the case in high Uncertainty Avoidance countries. India has Power Distance (PDI) as the highest Hofstede Dimension for the culture. the culture may be more open to unstructured ideas and situations. with a ranking of 77 compared to a USA¶s 40. but rather accepted by the population as a cultural norm. This Power Distance score for India indicates a high level of inequality of power and wealth within the society. although still less than the male population.
However USA¶s score is much higher for this dimension at 91. there is a correlation between a country's religion and the Hofstede Dimension rankings it has. This indicates a much collectivist outlook in India as compared to greater emphasis on selfreliance and loose bonds with others in the USA. India has an individualism score above the world average. This score of 48 is much different from China¶s 20. All three have a high level of Power Distance as the highest correlating cultural Dimension with their religions Interestingly enough. The Hofstede Dimension that correlates most with the Hindu religion is Power Distance (PDI).It has been found that in most cultures. the same as Atheists in China and Muslims. There is only one country with over 50% of its population practicing the Hindu religion ± India. 10 .
3. Familiarity of currency relationships. environment.2 Pay and international Employee relations To design an appropriate reward strategy for its Indian employees. The table below shows some of the more important laws a human resource department in India needs to consider with respect to compensation. Companies now recognize that a µHighly engaged employee¶ the key to success. the only strategic resource that any enterprise truly needs. This has led to companies routinely using their innovative HR practices as their USP (Unique Selling Proposition) to keep up with the times in the wake of a rapidly changing labor landscape. Omnitech will be required to take a number of factors into consideration. and employment practices. motivate and retain¶ mantra that the HR function seeks to deliver for the organization are based on these HR sub-functions. An analysis of the main HR problems in India could be done based on the certain challenges that mould the contours of the various sub-functions of HR. India has many as 45 labour laws at national level and close to four times that at the level of state governments (Kaushik 2006). India has witnessed a revolution in the field of Human Resource. across business sectors. It has transformed itself being merely Personnel Management ± maintain records and ensure statutory compliances. effect of inflation on compensation and an understanding of the allowances appropriate to India must also be studied.Chapter 3 Human Resource Management Issues that Omnitech may face. These will include knowledge of Indian laws. The HR function of 21st century India has made a transition from being µbehind-the scenes¶ support appendage to becoming the critical differentiator in business. it has gone from being just a support function to being a strategic partner in the growth of businesses. while doing the bare minimum to keep employee satisfaction on an even keel to being an integrated part of the corporate machinery. The µattract. Rapid globalization has made companies realize people are the key to growth. 11 . customs.
Workmen¶s Compensation Act 1923 Compensation shall be provided to a workman for any injury suffered during the course of his employment or to his dependants in the case of his death.Fig2 : Indian employment legislation and reward mechanisms Labour Law Minimum Wages Act 1948 Context Prescribes minimum wages for all employees in all establishments or working home in certain employment specified in the schedule of the Act. Child Labour (Prohibition & Regulation) Act 1986 Prohibits the engagement of children in certain employment and to regulate the conditions of work of children in certain other employments. Source: Various including www. Payment of Bonus Act 1965 Provides the payment of bonuses to person employed in certain establishments on the basis of profits or on the basis of production or productivity.citehr. Payment of Wages Act 1936 Regulates issues relating to time limits within which wages shall be distributed to employees and that no deductions other than those authorized by the law and made by the employers. The Act is applicable to establishments employing at least 20 people. Apprentices Act 1961 Provides regulation and control of training of apprentices.com/80534-labour-laws-india-html 12 . Maternity Benefits Act 1961 Regulates the employment of women in certain establishments for a prescribed period before and after child birth and provides certain other benefits.
Therefore it can pioneer the use of performance appraisals in India. 13 . arguably restricting the perceived relevance of performance appraisal to career progression (Chatterjee.4 International Training and Development Training and development increases in complexity as a company moves abroad. 3. India is very seniority based.3 Performance Appraisals Omnitech will need to employ a formalized and systematic approach to assessing an employee¶s performance. There is relatively coverage of employees under a formal performance appraisal. so that the older a person.It should be noted that the minimum wage in India is 2.11 GBP while in the USA it is 4. the more respectful and rewarding the work is expected to become. 3.25 GBP. highlight potential and identify training and development needs. The µreservation system¶. 2007). In India however. 15% of jobs must go to scheduled casts) may be another factor restricting career planning within Indian organizations. levels of supervision. performance appraisal is less emphasized. Type of training will depend on a number of factors: y y The degree to which management is centralized. which seeks to allocate employment opportunities to specific social groups ( e. The appendix section of this report has an example of an appraisal system that can be used. It also cost less to insure employees in India (10 GBP) than the USA (25 GBP).g. pay. Type of workers employed in subsidiaries or joint ventures. promotions. A comprehensive appraisal system can provide the basis for key managerial decisions such as those concerning the allocation of duties and responsibilities. Therefore Omnitech is getting great labour minded people and high standard of work for almost half the cost they will have in the USA. training and development etc. However Omnitech is not an Indian Organization.
14 . so that they can interact more effectively with their Indian Colleagues. Problems may arise with team working. work habits. In the case of Omnitech however. etc. An extensive training program can be designed to teach employees about Indian Culture and customs. This way supplier. Omnitech can deal with is problem by ensuring that employees sent abroad are fully immersed in foreign culture. and then translated and delivered to all suppliers. In a cross cultural context. subsidiaries and distributors. it is not only personality that needs to be taken into consideration. this way the training will be far more local and more in line with local culture. but also very real cultural differences and approaches between team members. employees and distributors are aware of the brand image that needs to be communicated.y The importance of branding and the extent to which employees are expected to reflect the brand. y The cultural expectations of training. A training program can be set up centrally. One can employ a centralized based training. a more poly-centric approach should be taken.
I honestly believe that Omnitech can attract and keep these skilled workers and win the hearts and minds of the Indian Skilled Workforce. India is very different from the United States in terms of culture. In the case of Omnitech Systems Inc. 15 . labour laws.Chapter 4 Conclusion Obliviously trying to set up business in another country is not as easy as it sounds. and religion etc. India has a very large pool of skilled and knowledgeable university graduates (especially in the field of Information Technology which is perfect for a data management company such as Omnitech) that cannot find employment.. looking to set up a subsidiary in India can be a difficult experience if they do not take into account the issues discussed in the previous 2 chapters. The biggest one will be the large skilled labour force at cheaper employment wages. The advantages however will be of great benefit to Omnitech. Omnitech must research these aspects properly if they are to succeed in India.
reliability and dependability Planning and organizational effectiveness Meeting deadlines. and balancing tasks.Appendix Example of a performance appraisal Omnitech can use: Sample Appraisal Form (to be filled by the employee) Employee Name Position/Title Division Evaluation Period Line Manager/Appraiser How would you rate yourself on the Following Attributes Quantity of work Meeting job requirements on a timely basis Quality of work Effectiveness & Accuracy Knowledge of job extent to which the employee knows and demonstrates all phases of assigned work Team Spirit Decision Making Ability Attendance. managing resources. Communication Skills Initiative and creativity Supervisory ability (if applicable) Score Max marks 10 10 10 10 10 10 10 10 10 10 What do I consider to be the important abilities that my job requires? What are my major accomplishments for the past year? What have I done for my personal and/or professional development Employers Comments Employee Signature/Date Evaluator Signature/Date Authorized Unit Administrator Signature/Date (if applicable) 16 .
Essex UK: Prentice Hall. 11th edition. Styles. & Griffiths A. S. Dass..com/articles_various/HR-policies-in-India.chillibreeze. Minocha. Essex UK: Prentice Hall.. Wall. 2005... International Business. 3rd edition. Essex UK: Prentice Hall 3. 1980 Personnel: the Human Problems of Management. 2007. 2. S. Wall. 4th edition. B.Bibliography and References Books 1. Applied Economics.asp [Accessed 12 November 2009] 17 .. Essex UK: Prentice Hall Websites 1. L. S.. Strauss. 1st edition. Changing HR policies in India Available at: http://www. S. 4.. & Rees. 2009.. Economics for Business and Management: a student text.. 2010. G. S. & Griffiths A. Wall..
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