Trade-offs in Globalization
Organizations should weigh the benefits of globalization against the potential challenges it poses. They have to make a trade-off between the complete localization of products and services and global sharing of products or knowledge to improve profits and market share.
The managers of various individual subsidiaries may be concerned about the impact of globalization on their units or position. As a result, they may be unwilling to cooperate in the coordination of the business activities. In global projects, it commonly happens that one of the subsidiaries takes the lead and the others follow. Such a situation may create a sense of insecurity in the minds of the managers of non-leading subsidiaries.
As a result of all these fears, many subsidiary managers resist the process of globalization, despite cooperating with headquarters to achieve global benefits. The attitude of these managers poses the biggest obstacle to the process of globalization. However, such obstacles can be successfully overcome by persuading these managers about the benefits of globalization or by increasing their emoluments.
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