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By Mary T. O’Sullivan, MSOL
“Globalization is a fact, because of technology, because of an integrated global supply chain, because of changes in transportation. And we’re not going to be able to build a wall around that” – Barack Obama
The impact of globalization and international trade on organizations
The overall impact of globalization and international trade on any organization brings change in every aspect of how a company conducts business. Due to the nature of some businesses, export of certain technologies cannot be transferred overseas. However, due to the US Government’s need to ally with strategic international defense partners as well as internal offset requirements, leveraging multi-national alliances has become far more commonplace. Companies now do business with Thales, BAE, and partners in Australia, Canada, as well as Japan, Taiwan, Turkey, and the United Arab Emirates.
Technology and Trade Investment
The relationships the company establishes with international entities are not necessarily based on cheaper labor or cheaper parts; these relationships are driven by the need of the US Government for leverage in strategic countries for the purpose of national defense.
As mentioned earlier, technology exports are closely controlled if permitted at all. As far as manufacturing certain products overseas, many international customers desire products that are made in US factories by US workers. They want a visit to the US to tour our facilities. This is often a symbol of status to them.
However, securing a contract with an international customer usually dictates a need for alliances with companies in that country, often involving an acceptable technology transfer. Only non-critical hardware and software are available for technology transfer. Delicate negotiations and cultural sensitivities are essential in dealing with this situation. Another interesting issue a major US defense company faces is the importance of relationships. Some companies have not come to grips fully with the concept of dealing with partners’ relatives, friends, and other external relationships. This practice takes great finesse, and if mishandled, can lead to irreparable harm to the business deal.
Additionally, there are companies that often come late to the party. They often approach international suppliers well after their competitors have already locked them up. They may find themselves continually surprised by this phenomenon.
People movement, composition of workforce, multi-nationals, mergers and acquisitions, culture, spread of common ideas and practices
A major issue faced by many companies is the inexperience of some senior managers in international dealings. Most of them can have unrealistic expectations and impose unrealistic deadlines and changes. This approach does nothing to speed up negotiations or improve milestone payments. Most overseas companies value relationships far more than artificial deadlines. Even with the acquisition of small international companies and hiring of experienced international businesspeople, many senior executives remain woefully unskilled in global protocols. (Like the importance of honoring verbal agreements.)
Also, while they may have hired from many diverse cultures, much of the work in the company may be classified by the US Government, requiring natural born US citizens only. In fact, some documents must be stamped “NO FORN (no foreign). Employees of diverse backgrounds not born in the United States work in areas like HR, Communications, etc.
Organizational change in mission, type of business, operations, ownership, management practices or other characteristics because of these developments
Organizations may have made some progress. One company may have appointed a UK director to lead a major international capture effort. Maybe they’ve leveraged a small overseas subsidiary to assist in European and West Asian efforts. Maybe there is also an endeavor ongoing to establish landed companies in strategic countries like Saudi Arabia, the UAE, and Kuwait. Moreover, senior executive hires for major international business area are foreign, as may be appointed the senior in-country executive for that same business.
The mission of some companies is national defense, and that mission has not been changed by doing business internationally. The mission is often dictated by the US Government, and inclusiveness is a corollary to that mission.
International efforts are in support of expanding the role of strategic partners engaged in a similar business type overseas. The business model has not changed. There is no dealing in commodities such as palm oil, rice, carpets, etc. Business operations may be limited to obtaining and establishing landed companies, not expanding US business interests abroad.
Opportunities or potential difficulties these changes presented
With national defense as a core mission, opportunities as well as challenges present themselves to a large defense concern. Opportunities for international sales are apparent as the US Government seeks to export defense products to further its own interests in strategic countries. The burden for completing those deals successfully is with the contractors, as they navigate the whirlpools, eddies and currents while establishing viable business partners overseas. Savvy leaders are needed to build and maintain those business relationships and to bring profit into the company, while protecting US national interests as well.
“Congress has the responsibility to ensure that any international trade agreement entered into by the United States must serve the national interest, not merely the interests of those crafting the proposal in secret.” – Jeff Sessions
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Read all Mary’s columns here: https://rinewstoday.com/mary-t-osullivan-msol-pcc-shrm-scp/
Mary T. O’Sullivan, Master of Science, Organizational Leadership, International Coaching Federation Professional Certified Coach, Society of Human Resource Management, “Senior Certified Professional. Graduate Certificate in Executive and Professional Career Coaching, University of Texas at Dallas.
Member, Beta Gamma Sigma, the International Honor Society.
Advanced Studies in Education from Montclair University, SUNY Oswego and Syracuse University.
Mary is also a certified Six Sigma Specialist, Contract Specialist, IPT Leader and holds a Certificate in Essentials of Human Resource Management from SHRM.
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