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Effects of Globalization on Organizations Value Chain

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Effects of Globalization on Organizations Value Chain

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  1. Effects of Globalization on Organizations Value Chain

  2. Value chains and supply chains for produced goods have been completely transformed due to globalization. When transportation, shipping, and technology were less convenient in the early days, most supply chain management procedures were carried out at local industrial facilities. A product can now be made at one site, packed at a second location, and exported for sale in different world regions using flexible supply chain management. GVCs, or global value chains, refer to the complicated multinational production and distribution process.

  3. In addition, globalization can help to increase the company’s and its value chain’s financial assets. Governments in many nations are making it easier for new businesses to get off the ground because of the influence of globalization and its effect on the global market. India and China are using FDI (Foreign Direct Investment) as a significant weapon to gain foreign currency while also allowing multinational corporations (MNCs) a chance to thrive in their local markets. This bandwagon of easing the FDI policies of other OECD (Organisation for Economic Corporation) countries, such as Australia, is also gaining traction. Foreign multinational corporations (MNCs) account for more than 20 per cent of national employment in many OECD nations.

  4. Small and medium-sized businesses are being forced to improve their operations and possibly contemplate expanding globally due to increased foreign competition in domestic markets. To keep up with the demand from outside, a worldwide manufacturing network and distribution network must be established. Production planning gets more challenging as markets become more global, allowing for more efficient use of resources. The multinational product lifecycle hypothesis is no longer relevant in most industries. Technology-intensive companies’ product markets are changing at an accelerated pace. As demand for new products increases, product lifecycles are becoming shorter. In addition, clients worldwide have rapid access to the most recent items and technologies thanks to developments in communication and transportation technology.

  5. Global market pressures, global technical forces, global cost forces, and political and macroeconomic forces contribute to a more globalized and integrated global economy. Globalization and the Integration of the global economy are affecting business practices. Additionally, a global supply chain is based on the Integration of geographical, functional, and sectoral Integration. Some emerging countries’ economies benefited from globalization as well. The economic situation in many developing countries has improved to the point where employees from those countries can now work in many multinational corporations without leaving their homes and earning a respectable salary.

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