Globalization: Value Chain And Competitive Advantages And Responsibility

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Globalization has driven companies to become more efficient by creating infrastructures that will provide the competitive advantage needed to not only survive but prosper. Its impact on the value chain of a given company means that said company has to learn how to effectively manage the related risks. Managing the value chain has become more complex as more companies realize conducting business internationally is not a luxury but a necessity. For banks, globalization offers both promise and risk. Promise in the gaining of new markets and customers. Risk in the form of political or economic risks. Therefore, the following considerations should be addressed:
Competitive advantage considerations
The value chain and competitive advantage complement
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Globalized companies like Citibank publish annual global citizenship reports to provide an overview of its strategic citizenship policies and programs (Patella, 2015). “In highly visible chains compliance with social and environmental concerns are central to the organization and governance of the chain and the relationships between local suppliers and global lead firms” (Lund-Thompson & Nadvi, 2010). Therefore, companies should insure its corporate social responsibility agendas reflect a shared ownership of…show more content…
Corporations are required to enhance capital flows. A practice widely used by different companies to reduce costs was and is outsourcing. Companies occasionally found purchasing from another company with a comparative advantage more affordable than offering the service or product internally. Banks are following this trend as well. For example, Citizen Bank signed a five year IT services deal with IBM resulting in IT jobs being outsourced to India and layoffs for American IT employees and contractors (Thibodeau, 2015). “If production is increasingly fragmented across geographic space and between firms, then how are these fragmented activities coordinated” (Gereffi, Humphrey & Sturgeon, 2005)? How will Citizen Bank and IBM manage its IT value chain to insure cooperation and avoid

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