Globalisation of Google

4196 Words Aug 19th, 2010 17 Pages
Introduction
Globalization can be defined as the integration of the world economies by allowing free movement of trade, technology and people (Daniel et al, 2009). Furthermore, the developments in technology are perceived as a driving force of globalisation (Denton & Al-Shamali 2000). This tends to be identified and observable in every day to day activity primarily due to the emergence of internet technology. The internet is globally integrating and merging the different nations of the world. The impact of the internet cannot be over emphasized; it has provided a common base upon which countries from the entire world are able to communicate and share information leading to a wide spread of values, culture and trade (Luthans and Doh, 2009).
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18). The IR framework is designed to consider managerial perceptions of the environment along two basic imperatives – the pressures for GI and the pressures for LR.

As shown in Figure 1, the IR framework is illustrated on 2 different axis forming a 2 by 2 matrix. According to, Prahalad and Doz (1987) international companies in foreign markets use three strategies in responding to integration or localisation pressures. On one hand if managers perceive the high pressure for “global integration”, they may concentrate on a global strategic approach. On the other hand, if managers perceive the high pressure for “domestic affairs”, they may apply “locally responsive” strategies. Furthermore, Prahalad and Doz (1987) added that when perceptions of environmental pressures shows a need to respond concurrently to both integration and responsiveness demands, managers may choose to adopt “multifocal” business strategies to harmonize their the operations while maintaining a high level of responsiveness to each local context.

Figure 1

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Barlet and Ghosal, 1989 further classified MNC strategy into four basic strategies. They developed the work of Prahalad and Doz and initially suggested three types of MNCs, each tackling a different strategy (namely Global (High integration and low responsiveness), Multi domestic (low integration and high responsiveness) and transnational strategies (high integration and low responsiveness).

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