Page 20 - DMGT548_GLOBAL_HRM

Unit 1: Introduction to Global HRM

 and as a result increasing employment Notes
 prevent or reduce unemployment
 generate additional income for the population, and
 Finally, to increase tax revenue

1.2.5 Competitive Drivers

The globalisation is also affected by the competition. There are various forms of competitive
drivers. If there is a strong competition in the industry, the greater is the possibility of the
industry to globalise.
 Continuing increases in the level of world trade
 Increased ownership of corporations by foreign acquirers
 Rise of new competitors intent upon becoming global competitors

 Growth of global networks making countries interdependent in particular industries
 More companies becoming globally centred rather than nationally centred
 Increased formation of global strategic alliances

1.2.6 Other Drivers

 Revolution in information and communication

 Globalisation of financial markets
 Improvements in business travel

1.2.7 Reasons for the Companies to go Global

The reasons to go global are as follows:
Growth: Is there anybody who would not accept that every company in the world, and equally
its shareholders, management and staff wish to grow, to increase sales, and if possible profits, in
order to secure their long-term future? The widely accepted hypothesis is after all valid that a
company which does not achieve growth and stability, is – like a plant – condemned to death in
the long-term, or to being pushed aside by increasingly powerful competitors. The opportunities
for growth within the national territory are however often limited – although less often than is
frequently believed.
The “No. 1 Position”: Size by itself, measured in absolute numbers, is usually not a key objective
for the “multinationals”, since for such companies whether they generate sales of 30, 50 or a 100
thousand million $ is usually not material in achieving a dominant position in the world
market. Relative size is more important, i.e. the value of sales compared with those of competitors,
and in particular the objective of being the largest and strongest in the own core market, even
perhaps being “world market leader”. For example, Jürgen Schrempp, CEO of DaimlerChrysler
is clearly pursuing with all the force at his disposal the objective of achieving the “No. 1 position
in the World Car Manufacturers’ League” (Scholtys 2002).
The objective of being or aiming to be No. 1 in the market is totally logical, considering that in
the market economy, as in sport, the motto “winner takes it all” definitely applies: Once a
product, brand or a company has become market leader, and not just in its home country, but
also in foreign markets, or even worldwide, then its position is self-reinforcing, because that

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