Consequences of globalisation

WITH the world evolving towards globalisation, this has brought about increased complexity of operations as companies globalise.

Complexity moves hand in hand with globalisation and is brought on by increased overseas commercial activity and prevailing geopolitical forces; while globalisation involves breaking barriers and international co-operation. Complexity can be good when it involves commercial activities that add value but bad when it involves geopolitical forces which are beyond the CEOs’ control, and yet, can destroy value.Around 77 per cent of global Chief Executive Officers, interviewed by PriceWaterhouseCoopers (PWC) in its ninth Annual Global CEO Survey, said that the level of complexity in their organisations was higher than it was three years ago.As a result of this, the chief executives said managing complexity had become a high priority.For the survey, 1 410 CEOs were interviewed in 45 countries during the last quarter of 2005.However, only two African countries – South Africa and Kenya – were featured in the survey.Said PWC International Limited CEO, Samuel DiPiazza Jr: “While providing benefits, globalisation brings with it increased complexity.The CEOs express a clear understanding of what needs to be done to manage complexity successfully.”However, we learned that the CEOs are not doing as well as they can in converting that understanding into meaningful action and that much work needs to be done before this performance gap can be closed.”The survey also revealed that chief executives were optimistic about the impact of globalisation on their companies, believing that it would brings opportunities to reach new customers and lower costs.Leaders of the world’s companies showed that they believed that China was the best place to locate their overseas operations, with 55 per cent of CEOs reporting that they plan to do business there in the next three years.Other countries that followed China are India, Russia and Brazil – known as the BRIC economies.These economies are poised for immense economic growth over the next several decades, and according to the survey, they are increasingly the focus of CEOs’ globalisation efforts.Finding new customers and markets, and not just cost-cutting, is the primary goal of companies that are expanding across the globe, especially in the BRICs economies, according to PWC.”We recognise that an in-depth look at complexity in the context of globalisation is something of a pioneering effort.And we do not have all the answers.However, if the results of this survey raise the level of awareness about this important issue, foster debate and stimulate additional research, we will have accomplished our objective,” said DiPiazza Jr.Fifty-two per cent of the survey participants are publicly listed on a stock exchange, while 47 per cent are privately owned.One per cent did not specify their companies’ status.The issue of globalisation has not gone without its problems, there are anti-globalisation advocates at most of the international economic forums who believe that Africa and the rest of the third world, are getting a raw deal and no benefits.Other experts have gone on to argue that globalisation has in some instances, reinforced the strong economies and weakened those that were already weak.Complexity can be good when it involves commercial activities that add value but bad when it involves geopolitical forces which are beyond the CEOs’ control, and yet, can destroy value.Around 77 per cent of global Chief Executive Officers, interviewed by PriceWaterhouseCoopers (PWC) in its ninth Annual Global CEO Survey, said that the level of complexity in their organisations was higher than it was three years ago.As a result of this, the chief executives said managing complexity had become a high priority.For the survey, 1 410 CEOs were interviewed in 45 countries during the last quarter of 2005.However, only two African countries – South Africa and Kenya – were featured in the survey.Said PWC International Limited CEO, Samuel DiPiazza Jr: “While providing benefits, globalisation brings with it increased complexity.The CEOs express a clear understanding of what needs to be done to manage complexity successfully.”However, we learned that the CEOs are not doing as well as they can in converting that understanding into meaningful action and that much work needs to be done before this performance gap can be closed.”The survey also revealed that chief executives were optimistic about the impact of globalisation on their companies, believing that it would brings opportunities to reach new customers and lower costs.Leaders of the world’s companies showed that they believed that China was the best place to locate their overseas operations, with 55 per cent of CEOs reporting that they plan to do business there in the next three years.Other countries that followed China are India, Russia and Brazil – known as the BRIC economies.These economies are poised for immense economic growth over the next several decades, and according to the survey, they are increasingly the focus of CEOs’ globalisation efforts.Finding new customers and markets, and not just cost-cutting, is the primary goal of companies that are expanding across the globe, especially in the BRICs economies, according to PWC.”We recognise that an in-depth look at complexity in the context of globalisation is something of a pioneering effort.And we do not have all the answers.However, if the results of this survey raise the level of awareness about this important issue, foster debate and stimulate additional research, we will have accomplished our objective,” said DiPiazza Jr.Fifty-two per cent of the survey participants are publicly listed on a stock exchange, while 47 per cent are privately owned.One per cent did not specify their companies’ status.The issue of globalisation has not gone without its problems, there are anti-globalisation advocates at most of the international economic forums who believe that Africa and the rest of the third world, are getting a raw deal and no benefits.Other experts have gone on to argue that globalisation has in some instances, reinforced the strong economies and weakened those that were already weak.