Analyse the effect of globalisation on operations management

Resource Description

Analyse the effect of globalisation on operations management

Globalisation and research and development

Businesses use operations strategies such as research and development as a response to the influence of globalisation. Globalisation is the process of interaction and integration among people and companies worldwide. Research and development refers to working directly towards innovation, introduction and improvements to products and processes. There is a strong positive relationship between globalisation and research and development as businesses now have the advantage of accessing the latest market research and customer preferences which opens up new market options for consumers. A positive implication of using research and development as a response to globalization involves McDonalds using the R&D process involving the understanding of the external factors that affect consumer spending habits. McDonalds engages with suppliers, customers and franchises around the world to ensure that the product and service offerings satisfy the world. This can be seen when McDonalds employs an Executive chef to help a team of chefs to create new menu items for Mcdonalds in the test kitchen Chicago USA. However, research and development may be seen as a negative implication as it can consume valuable financial resources that do not provide return for years. This can be seen when McDonalds tries to create new products in its test kitchen which can be lengthy depending on the product, and it can take years before its products hit the restaurants. Overall, there is a strong relationship between the influence of globalisation and the response of research and development as a strategy which is based on consumer preferences around the world McDonalds will go through R&D in order to satisfy consumer demands.

Globalisation and ecommerce

Businesses use operations strategies such as ecommerce as a response to the influence of globalization. There is a strong positive relationship between globalisation and ecommerce, as the majority of business activity is conducted online which is considered a time efficient method of addressing many core business activities. Globalisation has led to the development of ecommerce. This had a positive impact on businesses such as BlueScope Steel in China which allowed the business to buy sources of iron ore online from cheap suppliers from around the world. This resulted in a 6% decrease in BlueScope Steel’s cost in purchasing their inputs. Overall, there is a strong relationship between the influence of globalisation and the response of e commerce as a strategy as it allows businesses to purchase inputs online from cheaper suppliers.

Globalisation and outsourcing

Businesses use operations strategies between globalisation and outsourcing, as businesses now have the advantage of accessing cheaper materials and supplies. There is a strong relationship between globalisation and outsourcing, as businesses now have the advantage of accessing cheaper materials and supplies. A positive implication of using outsourcing as a response to globalisation involves having instant global access to cost effective manufacturing. This can be seen when Apple outsourced its non-core business functions such as operations to Foxconn which allowed Apple to save immense costs on the operations process through cheaper labour. In effect this allowed Apple to mass manufacture products at low costs. However, a negative implication that globalisation has prompted is the lack of control. This can be seen where Apple does not have full controll of the operations proccess in Foxconn when it comes to the suicide attempts made the employees of Foxconn in 2012 which resulted in negative publicity for Apple. Overall, there is a strong relationship between the influence of globalisation and the response of outsourcing as a strategy as it allows businesses to outsource its non-core business functions such as Apple.