Globalization with challenges and issues related to
Globalizationis creating numerous opportunities for sharing knowledge, technology, socialvalues, and behavioral norms and promoting development at different levelsincluding individual’s organization, and societies across different countriesand cultures. Globalization leads to increased competition. Thegood side of globalization is all about the efficiencies and opportunities openmarkets create. Business can communicate efficiently and effectively with theirsuppliers and distribution networks.
Globalization a greater impact on theunderstanding of strategy. Strategies are defined by covering all aspects ofbusiness, such as environmental socials values and market development regardingresources availability. Is quite difficult to understand the strategy withoutconsidering globalization effect. Globalization brings lower cost goods from abroad which leaves themwith spending power to spare and a higher standard of living.it also bringsopportunities for productive investment in higher growth investment.
Innovationis a process of translating a new method or idea. Innovation is very crucial tothe success of a business therefore also has a greater impact on strategies. Hencerequired better knowledge of innovation before getting to understand thestrategies.
Due to globalization, innovation also increased and more peopleattracted towards it and in creating new products and selling them globally. Soit’s a very important factor in the understanding of strategy. Strategies aremade by taking into account all such factors.Sustainability factors include triple bottom line approachthat considers the environment, society and profit. Sustainability has animportant impact on the understanding of strategy. Either strategy issustainable according to the environmental, social and customer needs.Sustainability must-have factor for setting strategy and their respectivepolicies.
The board of Directors is appointed toact on behalf of the shareholders to run the day to day affairs of business.Therefore, their first role is to protect the shareholder’s interest. This istheir legal duty. This means that they have to see that the shareholder’s valueincreased and they are getting an adequate return on their investment.
Board ofDirectors also responsible for taking the decisions regarding businessprosperity and affairs that would affect the long-term performance of thebusiness. In addition tobusiness and financial issues, Board of Directors must deal with challenges andissues related to corporate governance, corporate social responsibility, andcorporate ethics. Board of Directors has to oversee the top managementwith the concurrence of the shareholder.Major roles of Board ofDirectors is to provide continuity for the organization. Select and appoint ofChief Executive to whom responsibilities for the administration of theorganization is delegated including review and evaluate his performanceregularly on specific job description including executive relations with theboard and leadership in the organization. It is important that board meetings are held properly ona periodic basis so that directors can discharge their responsibility tocontrol the company’s overall situation and strategy, to monitor the exerciseof any delegated authority. So that individual directors can report theirparticular area of responsibility.
Board of Director also responsible toacquire sufficient resources for the organization’s operations and to financethe programs effectively. The roles of Board of Director include is toestablish vision, mission, and values. Business vision and mission is to guideand set the pace for its current operations and future development. To achievecompany’s vision and mission goals must be defined and directors areresponsible for setting goals and reviewing it regularly basis. Company’spolicies should be defined to achieve goals and reaching to company’s mission.
Managementteams are formed by individuals in a company and are tasked to manage company’sday to day operations. Management teams are required to implement strategiesformed by the Board of Governance. Board of Directors forms policies andprocedures to run the company and the management team is responsible forsetting up a risk maintenance system. The oversight of the management isnecessary as monitoring of controls is necessary to bring efficiency to thesystem.
Board does consist of independent directors, who are assigned the taskof evaluating, monitoring, reporting and then rectifying the errors andomissions detected by the control system. In some instances, Board might handover some responsibilities to the senior management to successfully implementthe policies and strategies, which are to be reviewed time to time to ensuretransparency.Managementis also responsible to develop organizational culture and to focus on applyingcontrol systems throughout the channel. An independent audit committee is theone which supervises the effectiveness of control culture and environment. Toavoid more reliance on management own tactical ways to apply controls, anindependent audit committee comprising of Independent Directors are responsibleto oversee the implementation of control strategies devised by the Board ofDirectors. The audit committee oversees the company’s operations on ethical andmoral grounds as well.
A well thought out oversight of management is necessaryfor the board because there may be the breach of implementation and there is arisk involved that senior management might misuse their powers. That breachmight not be quantified but it can create hurdles to meet company’s objectives.Board can oversee the organizational and operational performance of the companyby overseeing its management team and possibly could prevent any future lossarising from the breach of strategy implementation.