by Katherine Graham

Going Global

Time To Capitalise On Global Business Markets

Emerging markets are the reason for future growth
Global .jpg
“Going global” is a catch phrase that has been popping up for years in companies’ mission statements and annual reports. But until now, it’s been merely a concept and not something that has actually resulted in true integration, with developed and emerging markets still managed as separate entities by most multinational corporations.

All this is about to change. According to Deloitte’s Human Capital Trends, “operation globalisation” is a phenomenon that is revolutionising human resource management around the world. The report states: “In 2012, forecasts predict that more than half of the world’s imports will be purchased by emerging markets, while mature markets will likely face uneven recoveries, flat growth and declining talent pools.

 Meanwhile, emerging economies are widely recognised as the primary engine for future growth, profits and talent. In response, many leading companies are creating truly global business and operating models that no longer treat the home market as the centre of the universe.”

The report goes on to say that companies are no longer treating emerging markets as merely a source of cheap labour, but also of high-value skills. “This shift to new levels of globalisation is likely to be one of the biggest changes that organisations will face this decade,” the authors assert. “For HR leaders, the shift to new global operating models is an opportunity that demands attention and focus – drawing on HR’s particular ability to lead and shape the agenda around change, talent and global HR operations.”

A new model

In the past, companies have relied on one of two models when it comes to managing their offshore businesses. The first is the entrepreneurial or international model, which treats the rest of the world as subservient to the company’s home market. The second is the federated model, in which multiple geographic areas are all seen as distinct and separate.

According to the Deloitte report, a third model is emerging which many leading companies are adopting. This is the globally integrated model, where major business operations, including both front- and back-office functions, are seamlessly interwoven. In this model, the company’s home market is treated as just one of many global markets.

How does SA stand to benefit?

“My sense is that the SA market has not fully capitalised on the benefits created through global integration,” asserts Neo Masombuka, a director of Louis Allen Southern Africa, a change management consultancy. “One cannot deny that there has, however, been a positive shift in the right direction, but I would say still not enough.”
Masombuka says she is encouraged by the fact that SA recently climbed two places to 50th position in the 2012 World  Competitiveness Yearbook, an authoritative annual study that measures how well countries manage their economic and human resources to increase their prosperity. “It’s almost like the stage has been set now; it’s up to the actors to show up and put on a sterling performance. South Africa needs to rise to the occasion.

Embracing change

“Companies need to adopt a leadership style that is visionary and yet sensitive enough to help the employees to manage the transition” says Masombuka.
“Decentralised decision-making allows shared ownership across various levels of the organisation and builds an empowered workforce. When it comes to identifying opportunities for global participation, this shouldn’t be the prerogative of a chosen few; it should be the shared responsibility of every person within the company.”

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