Strategic Planning Best Practices

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Taking Business Globally
By John Lowe

Globalization: Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation technologies and services, mass migration and the movement of peoples ..." Britannica Concise Encyclopedia.

Globalization is not just a buzzword.

Globalization is everywhere, and it is here to stay. Once limited to the largest companies like IBM, Wal-Mart, and Dell, globalization affects all sizes and types of enterprises. Even smaller to mid-sized local companies cannot avoid the impact of globalization.

Today, globalization is the dominant feature in the global supply chain. It’s no longer only Wal-Mart and the other big boys; more and more companies find that they must take overseas sourcing and competition into account. For other companies, globalization might represent the lure of big and growing new markets overseas. However, it’s not all rosy, as some well-publicized stumbles in foreign markets have shown us, i.e., Wal-Mart’s difficulties in Germany and Japan. For others, globalization means learning how to work with offshore IT services and call center operations.

Welcome to the Dark Side!

Globalization has a dark side. In the early 19th Century, during the Industrial Revolution in England, Luddites destroyed laborsaving textile machinery as a protest against technological change. Over the last few years, the advantages and disadvantages of globalization have been debated extensively but it’s too late. Globalization cannot be halted, and its spread worldwide is self-sustaining.

The recent recalls of laptop batteries, pet food, toothpaste, and seafood confirm that product safety is a legitimate concern. Now we have toxic lead paint on children’s toys. Amidst these scandals, China executed the chief of its organization equivalent to our FDA. In recent years, industry experts have worried about the dangers of sub-standard product quality in critical aircraft components and automotive parts. Despite renewed U.S. enforcement of the 1977 Foreign Corrupt Practices Act, bribery and corruption are still a way of life in many countries. Moreover, sadly, child labor and near-slavery conditions persist overseas. Despite the official efforts, counterfeiting is still a widespread problem. Indeed, some cynics believe that China will only find the will to eliminate counterfeiting completely when others are stealing its own trade secrets.

On the Home Front

Many Americans are convinced that globalization means job losses from low-wage competition overseas and lower wages. The changes wrought by globalization are deep and complex. Controversy and protests against the World Trade Organization (WTO) have raised public awareness about the hazards of globalization. Displaced workers have been unable to make the transition to skilled jobs and service-oriented industries. In recent years, many Americans have lost their jobs and suffered hardship because of globalization. However, the U.S. economy is creating more high-paying jobs, not fewer.

Global Expansion

While international expansion is a major undertaking for small to medium-sized enterprises (SMEs), it favors smaller, entrepreneurial companies. Of all U.S. exporters, 77% have fewer than 100 employees.

Global Mindset

A global mindset is a state of mind and an orientation. It must be experienced, not simply learned. A global mindset is a prerequisite for the success of international expansion in order for a company to survive, compete, and grow in today’s worldwide marketplace. A global mindset is essential to seeking out opportunities overseas, and executives must possess it to manage foreign operations effectively. However, developing a global mindset represents an enormous challenge, especially to smaller to mid-sized enterprises (SMEs). It starts with buying a world map.

Globalization Resources

Fortunately, many good resources are available in the Tampa Bay area for SMEs interested in globalization. In addition, they can access global resources such as background materials, country profiles, consumer statistics, and industry information through the technology revolution and the Internet. The U.S. Chamber of Commerce, U.S. Department of Commerce, and trade and industry associations also offer excellent advice and support.

Further resources are provided to local SMEs at the Florida State level and by the Economic Development Corporations (EDCs), and other country and city organizations. Moreover, local colleges, their professors, and students represent another great resource to assist local companies with international business issues. In the Tampa Bay area, bi-national chambers of commerce have been established for some countries, such as China, Britain, and Brazil, and are able to provide helpful advice, contacts, and introductions for local firms. Furthermore, the Greater Tampa Chamber, St. Petersburg Area Chamber, and other Chambers of Commerce, as well as other regional organizations, sponsor a variety of international trade activities and can provide active support and introductions for local companies.

Local Assistance

Above all, globalization requires experience gained internationally in real hands-on situations. Successful international expansion requires executives with a global mindset, overseas experience, and language skills. Luckily, with an active and expanding international business climate, Tampa is becoming the home for growing cadre of management consultants available to help local companies, including SMEs, with going international, or in improving the effectiveness of existing operations overseas.

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John A.K. Lowe is President & Principal of Hilltop Global Associates, LLC, a management consultancy focused on global human resources and international business. Previously, John was a senior Human Resources executive with leading multinationals such as Brink’s, GTECH (High-Tech Lotteries), Seagram, and RCA. John is a Treasure Island resident, and can be reached at (727) 367-4646.

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