Current Issues in Management: Managing Globalisation in the Case of Halma

CURRENT ISSUES IN MANAGEMENT: MANAGING GLOBALISATION-A CASE OF HALMA
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Current Issues in Management: Managing Globalisation-A Case of Halma
Executive Summary
The purpose of this report is to explore globalisation as a management issue. Specifically, the report examines how Halma manages globalisation in terms of global integration, local responsiveness, access to new markets, currency fluctuations, and diversity. Independent research about the company and the issue is conducted. Based on information obtained from the company’s website and annual reports, this report finds that Halma utilises a multi-domestic strategy that builds on local responsiveness. The report also finds that the company utilizes acquisitions and strategic partnerships to access new markets. Further, it uses currency hedging to manage currency fluctuations and relies on a discrimination-and-fairness approach to manage diversity. Two key recommendations are provided. One, the company should shift to a transnational strategy that gives companies the benefits of both global integration and local responsiveness while minimising the risks of each strategy. Two, the company should integrate the access-and-legitimacy approach in managing diversity to increase its access to niche markets in different countries. The two recommendations will help Halma better manage globalisation and its related issues.
Table of Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc72254523 \h 2Introduction PAGEREF _Toc72254524 \h 4Integration versus Responsiveness PAGEREF _Toc72254525 \h 4Access to New Markets PAGEREF _Toc72254526 \h 6Foreign Currency Fluctuations PAGEREF _Toc72254527 \h 7Diversity PAGEREF _Toc72254528 \h 8Conclusion/ Recommendation PAGEREF _Toc72254529 \h 10References PAGEREF _Toc72254530 \h 12
Introduction
Firms operating in the international markets are faced with a myriad of issues that stem from globalisation. Over the years, technological advancements and changes in government policies have allowed inter-connectedness across the world, thus driving globalisation (Naz & Ahmad, 2018). This paper explores globalisation as a management issue at Halma. Halma is a British multinational group of companies that specialises in safety equipment (Halma, n.d.). It has companies in Australia, Belgium, France, Germany, Italy, Netherlands, United Kingdom (UK), Switzerland, United States (US), Brazil, India, and China. Its success has mainly been as a result of business agility and the ability to identify and enter niche markets around the world. Understanding how companies manage globalisation is a crucial part of understanding how companies change as they move into international markets. This paper will examine integration and responsiveness, new markets, currency fluctuations, and diversity as some of the key issues in globalisation, with a special focus on how Halma has managed those issues. Data for this report will be obtained from secondary sources such as the company’s website and annual reports as well as other relevant scholarly materials.
Integration versus Responsiveness
According to Johnson et al. (2014, p.270), global firms have to balance between global integration and local responsiveness. Global integration allows firms to enjoy economies of scale because similar goods can be produced to serve the global market. Local responsiveness allows firms to serve the unique needs of each market. However, creating a balance is usually a difficult task and companies have to carefully strategise. Different firms use different strategies based on whether they want to focus more on global integration, local responsiveness, or both. Halma understands that each of its markets is unique and different markets have different product standards, regulations, and customer needs. Therefore, it has adopted an international strategy that focuses more on local responsiveness and less on global integration. Johnson et al. ( 2014, p.271) refer to such a strategy as a multi-domestic strategy, which builds on meeting the needs of the local market. For instance, Crowcon, which is part of the Halma group of companies that specialises in gas detection equipment, had to adapt its equipment when the company launched its operations in China (Halma 2017, p.29). The Chinese market has different product standards, specifications, and requirements for gas detection equipment, and the company had to customise its gas detectors to meet these needs. Halma has high-level business agility that allows it to adapt to changing needs of customers in different countries as well as within its home country. Also, each country has a set of different requirements for international companies. While meeting these specific requirements is time-consuming and costly, Halma indicates that this is a source of barrier to entry for new firms. To meet these changing needs, Halma is constantly building on local expertise to ensure that it stays in business and continues to expand its international markets (Halma 2018, p.28). By focusing on the needs of each foreign market, Halma is incurring costs that new firms would likely fear, which deters them from entering markets that are already being served by Halma. According to Johnson et al. (2014, p.272), a firm that is using the multi-domestic strategy usually has business units that are managed locally to allow managers some independence in deciding how to meet the needs of the local market. Unlike globally integrated firms, locally responsive multinationals do not focus on high coordination and interdependence of subsidiaries and the holding company (Liao & Le 2017, p.1395). Halma has built on local responsiveness by managing certain activities such as human resources, sales, manufacturing, and marketing, among others, at the subsidiary rather than group level (Halma 2014, p.20). Each company, depending on where it is located, is managed by the subsidiary management. This means that the holding company has little say about the operations and this allows the subsidiary management to independently make decisions on how to allocate resources to meet the needs of the local market. Also, acquiring local companies in foreign countries that are already meeting the needs of local consumers has allowed Halma to build on local responsiveness benefits.
Access to New Markets
One of the key motives for globalisation is access to new markets. This is one of the key issues in globalisation that requires the attention of the management of multinational corporations. There has been an increasing similarity among consumers from different parts of the world (Naz & Ahmad, 2018). As consumers become similar, their needs also become similar, creating a homogeneous market. Naz and Ahmad (2018, p.134) indicate that the world has become one single market. Companies such as Halma work tirelessly to take advantage of new markets that have become accessible due to globalisation. Currently, Halma has a growth model that is centred around identifying and penetrating markets that have a global niche (Halma, n.d.). The management understands that to access new international markets, the company has to establish a sustainable growth strategy. According to Bright et al., (2019), one of the reasons why companies go global is because of the growth opportunities presented by foreign markets, especially in emerging economies. As revealed earlier, Halma is operational in both developed and emerging economies, such as China and India. Tapping into such markets has allowed it to grow and become the most admired company in Britain in 2020 (Halma, n.d.).Companies that are looking to tap into new markets employ different approaches. Halma has mostly relied on acquisitions and strategic partnerships to gain access to new markets and grow (Halma, n.d.). Acquisitions entail a firm procuring another firm within the same country or in a different country, which gives it control and access to local resources (Bright et al., 2019). Strategic partnerships involve two companies from different countries coming t...