Impact of Globalization on Value Chain

Question: Discuss about the . Answer: Introduction: This assessment consists with the evaluation and scrutiny of the various impact of Globalization has in the Value Chain. Globalization is the method by which global integration takes place with exchange of views, opinions, goods, thoughts and other characteristics of culture. Value Chain analysis consist of numerous number of activities which includes designing of a product, production procedures, marketing and distribution activities of an organization. All this above mentioned activities helps a business in producing a product. If a company is manufacturing one, its value chain starts with procurement of raw material and consists of all that is added to the product before it is sold to the consumers. Michael E. Porter was the first person to bring in the concept of value chain. Economic Globalization has an adverse effect on the value chain as it is a long term process and perception and values of people differ globally (Caniato et al. 2013). Competitive Advantage: With the help of Globalization there is a vast competitive advantage in Supply Chain Management and its Value Chain Analysis. Competitive advantage is gained when the value is created in carrying out a competitive strategy. One of the most useful tools used by any organization to achieve competitive advantage in the market place is Value Chain Analysis. Value Chain Analysis is a way of accumulating the activities those are required in order to offer product or services to a Consumer (Beck. 2015). The value chain model predicts the particular arrangement of actions that are needed to generate value for products and services. The arrangement of these activities and the final product must be a exceptional and differ from others. Competitive advantage leads to the result those which are obtained from distinct activities those are performed along the value chain. The value chain of a traditional manufacturing firm consists of activities like inbound logistics, outbound logistics, marketing plan, sales and services. It is also supported by the transportation of the firm, human resource management, technological development and procurement. With the help of globalization most of the organizations are able to sustain competitive position and achieve long term profitability. In achieving this strategy, a business firm has two options, cost leadership strategies and specialization. The cost leadership strategies are divided into three general strategies, Cost Leadership, differentiation and focus. With the help of global presence in the value chain more organization are gaining efficiency and it is also increasing the competitive market environment of Economic Globalization (Marchi et al. 2013). Financial Consideration: Value chain analysis and finance are interlinked with each other all the products and services that move though the value chain are invested to attain returns and the growth of competitiveness in the value chain. With the help of globalization value chain analysis is established between the financial provider and production to reduce the transaction cost and lower the threat of conventional financial services. Implementing finance in the value chain helps in ensuring that the firms have liquidity which leads to meeting market demand. Due to globalization financing gaps are properly analyzed between organizations, number of investor from foreign soil are increasing and the growth of companies are becoming huge. With the help of proper finance in the value chain the wholesalers, retailer; brokers have constant access to the line of products they required, and the delivery is done in timely manner and to meet assured specifications. Globalization also increases the entry of firms into n ew market as the investment opportunities are realized successfully (Rushton et al. 2014). Technological Consideration: The evolution of technology has significantly increasing and the importance of technology in the value chain is used by business and consumers arbitrarily. In the last two decades the technological factor in the value chain has changed drastically and the transition of large mainframe computing systems to personal computer are creating healthier work space. With the implementation of mobile technology in the value chain there is a huge rate of efficiency in the sales floor. The inbound and outbound logistics consists of several small activities from receiving of raw materials, distribution of finished goods, packaging and maintaining proper inventory requires huge amount of information exchange (Caniato et al. 2013). This exchange requires huge number of enterprise database and with help of global presence in the firms and advancement of technology the process is controlled efficiently and delivery time is also decreased. In addition to the above benefits, technology has included wireless solutions in global supply chains. With the help of wireless technology companies are now able to track and manage their shipments, which provides in eliminating loading errors, improving productivity and customer service globally (Sayfuddin. 2015). Wireless technology in global supply chain has also resulted in quality control mechanism for the companies, the implementation of wireless detection of defects with the help of sensor technology and providing smooth work flow is really affecting the supply chain numerously. All this is possible only through globalization and adoption of new technology from different market place and innovating supply chain (Jaumotte et al. 2013). Human Resource Consideration: All the organization is responsible for employees recruitment, selection and training. One of the most effective resource of any organization is their Human Resource Management which is directly related to its value chain. With the help of global presence and modern ideas, training methods and employee policies are implemented in different organization. In respect to this Performance Appraisal of the employees are done efficiently which leads in providing job satisfaction and motivation to their work. With the implementation of Globalization, companies are communicating with their customers and stake holders from various sub cultures, different languages and social backgrounds. Diversity of recruitment is taking place in different companies and greater emphasis on training is initiated to meet global standards (Sayfuddin. 2015). Cultural Consideration: Globalization has both negative and positive impact on the culture and traditional factors of the society. Not only in way of languages and customs. But globalization has created certain products and services those were not previously available. Every product is now available globally with similar taste but different pricing strategies. With the help of this, globalizations is making people aware of different culture of other countries and are decreasing gaps between continents. It provides combination of different cultures and weakening of exceptional cultural differences (Stormquist and Monkman 2014). Political and Economical Consideration: The globalization of the value chain is largely determined by two mechanisms, which consist of expansion of market through arms-length trade and expansion of internal structures of multinational enterprises. Globalization affects the political phase by moving from national systems towards a independent integrated system. With the advancement of economic globalization interdependence of national economies and trade between different nations are possible. The government of different nations has also abided with World Trade Organization framework for economic co-operation between nations. With the accomplishment of this there is a high level of investment done by foreign corporation in developing economies and thus increasing the growth and potential of the economy (Rani and Khan 2015). Corporate Social Responsibility Consideration: Globalization not only provides more opportunities and payback for multinational companies but they also help in adapting the changing environment of industrial level. Corporate Social Responsibility is one of the most significant factors for any organization to sustain in the competitive market place. Globalization promotes the development of Corporate Social Responsibility all over the globe, by making the public aware of the negative consequences such as income inequality among various companies, misuse of labour and lack of sustainability towards the environment. Often Corporate Social Responsibility helps is solving disputes among various global problems. Globalization also leads to failure of Corporate Social Responsibility in many developing countries. Most of the problems arise due to corporate irresponsibility by the managers. The solutions to these problems are providing public goods, security of citizens right and human rights (Sinha. 2015). With the transition of Globalization any business firm can exploit the performance by allocating its resources global. As the competition gets increased across boundaries more value and interest for the consumers are given importance and social, ethical and environmental factors are being taken into considerations (Rani and Khan 2015). Conclusion: This assessment consists of evaluating that how globalization has affected the value chain analysis. All the above mentioned considerations play an important role in shaping the value chain analysis of an organization. The effect of globalization in a society is enormous and also has its deep significance in business life span of any organization. With the help of globalization and introduction of mobile technology has given rise to effectiveness and efficiency in the process of Value Chain Analysis. The globalization and Supply Chain Management are interlinked with each other. Social Change Management enables globalization while globalization provides right of entry to new customer markets and new resource of procurement. 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