In this essay my purpose is to show the impact of the globalization on the telecommunication industry, more exactly I choose the company called Vodafone.
Globalization affected every industry of the world, and also affected the telecommunication industry especially in the developing countries. In the beginning, I would like to present what is globalization.
The OECD defines Globalisation as “The geographic dispersion of industrial and service activities for example research and development, sourcing of factor inputs, production, and distribution, and the cross-border networking of companies, for example through joint ventures and the sharing of assets”
Presently it relies upon us how we utilize the globalization factor to take points of interest from them. In creating, nations individuals are confounded too from globalization. It gives an ever increasing number of advantages to the organizations and it has its bad effects on independent venture too. It influences the neighborhood chains. More often than not the nearby chains do need some other organization to be as a contender since they need to control in the market as a monopolist. There is just globalization which can offer help to the general population and give better thing better chances and better comprehension of the item. The world has turned into a global village now you can get anything anywhere in the world it is all the benefits of globalization. Globalization made the world so close to one another and exceptionally the telecom area. We require wherever to impart on the planet on various issues and distinctive area. It is the required of the modern world.
Now let`s talk a little bit about the Vodafone company, it is considered to be one of the world`s largest company with operations and networks in over 60 countries. Vodafone nake is taken from “VOice DAta FONE” to reflect the provision of voice and data services over mobile phones. According to their site, they are one of the biggest world communications provider, operating in 26 countries and in partnership with others in over 55 more. Across the world, they have almost 444 million customers and around 19.5 million in the UK. They made the first call on 1 January 1985 from London to Newbury HQ. They now employ over 13,000 people across the UK.
In this work, we will use PESTEL Analysis to get in the depths of the effects of the globalization of the giant Vodafone.PESTEL Analysis it’s just an acronym used to identify the pros and cons facing an organization.The letters stand for Political, Economic, Social Technological, Environmental and Legal.
This strategy should be used or it is used every 6 months in every company to determinate if there are any changes in the company or how any of their changes could affect on a worldwide scale.
We can start with the political factors which determinate the rules and the laws of a government which can affect an organization or a specific industry, this includes political policy, fiscal and taxation policies too.
The economic factors which impact the economy and its performance as well as the profitability of an organization or a company. This may include interest rates, employment, and unemployment rate, raw materials costs and foreign exchange rates.
The social factors are focused on the on the social environment and identify any new trends, these factors are based on cultural trends, education levels, changes in lifestyle and may look as well at the behavior of the people in certain places.
The technological factors are looking for the rate of technological innovation and development that could affect a market or an industry. This factors may include changes in digital or mobile technology, automation, research, and development.
The environmental factors which relate to the influence of the surrounding environment and the impact of ecological aspects, in this group we can relate to climate cycling procedures, waste disposal, and sustainability.
To operate in a good manner an organization must understand what is legal and allowed on the territories that they operate, to cover this aspect we are getting to the legal terms which oblige any company to be aware of any changes in the legislation and the impact that it may have on the company.
Vodafone is one of the most rapidly flourishing global companies, which started as a holder of one of the first two mobile communications licenses in the UK and now it`s a dominant global brand. (Ibbott, 2007) provides a view that Vodafone created a social network that was involved in mergers and acquisitions and deployment of a global network of mobile technology that serves a proportionate mobile customer base of 198.6 million in 2006.Ibbott(2007) explained what really globalisation means as “A global company is one that permits its local operations to act in the image of the market locally and yet can act in a truly homogeneous way with the respect to the supply and provision of its core products and services”Vodafone is a global company as its sourcing and supply chain activities are transferred to be entirely global for the major part of its investment, while services remain local(Ibbott, 2007).
The globalization started to influence in a very powerful way the global economy. (Salvatore, 2004) analyzed that the globalization on the comparative advantage of Europe and concluded that Europe has a lower quality in telecommunication compared to Japan, United States, and some Asian Countries.
In 2005 Vodafone has experienced a fall out in Japan.They have released the “Converged-Handset” in the winter of 2005 in 13 countries including Japan. Being one of the world`s biggest firm, it did so without taking into account the domestic environment of each country. Doing this they lost subscribers and also they got a loss on their profit.The company lost 200,000subscribers in the first few months of the year and profits declined by 15.4 percent(Fackler;Belson, 2005).
Vodafone restructured its business model in 2009, in order to save costs and to accommodate more customer-facing roles. Around 400 workers were made jobless from its headquarters or being deployed to some other places. Hence, it is being proven over the years that in large multinational organizations, a large number of workers have been made jobless, creating a sense of insecurity among workers. Taking into account the fact that globalization may also have an adverse impact on workers; The European Globalization Adjustment Fund (EGF) has been. The growing integration of the economies has been a heated debate all around the world over the last two decades. The consequences of globalization and its various dimensions have been widely debated and examined by academics, politicians, policymakers, and even the private sector. According to the United Nations Development Program, Human Development Report, 1999 “Globalization is shaping a new era of interaction among economies and people. It is increasing the interaction between people across national boundaries, in the economy, technology, in culture and in governance. But it is also splitting production processes, labor markets, political entities, and societies. So, while globalization has positive and dynamic aspects, it has also negative, disruptive, marginalizing aspects.” Critics of globalization argue that globalization is detrimental to economic growth, such as it increases income inequality among nations, economic instability may arise, workers are being exploited and governments become unable to raise taxes, on the other hand, the advocates of globalization are of the view that it brings a higher rate of sustainable economic growth and improved living standards. In a study from the Centre of Economic Policy Research by European Policy Advisors, while analyzing the economic impact of globalization, it was found that the true benefits of globalization overweigh the costs associated with it. Vodafone spent €20 billion acquiring fixed-line broadband businesses in Germany, Spain, the UK and Greece between 2011 and 2014 according to their statistics and they contributed with € 20.3 billion to the European economy from the migration of 10% of 2G customers to 3G, also they invested €23 billion between 2014 and 2016 in their network and services.
In the Vodafone sustainability report, we can find that they are trying to replace their network equipment with new, more energy-efficient equipment that improves the network service for the customers and makes the operations more efficient.Anyway, this generate e-waste which stands for electronic waste, most of it is reused but some of it, it is recycled. During 2014/2015 the amount of e-waste was significantly increased as a result of their roll-out of Project Spring to upgrade the network across a number of markets, therefore they tried to achieve a high rate of recycling with a success of 98% recycled. Some of the electronic waste can be hazardous so it must be handled separately and disposed of responsibly. Trying to comply with the environmental regulations they have systems in place to manage the safe disposal of such materials, in the mature markets they have choices of experts in e-waste such as recycling contractors that comply with international regulations. However in small or in progress markets this can be challenging because often there are insufficient facilities and legal safeguards for recycling and disposal of the e-waste safely ,so in this particular cases they are choosing between allowing materials to be processed within the emerging market even there are insufficient facilities but in the meantime they are helping to build recycling facilities for the future, or in another manner to take care of the safety of the environment they are transporting the materials to the big markets which helps them to use high-quality facilities but they are increasing the carbon emission from transport . In some cases, they are storing the old equipment for future use or until there is a safe way for it to be disposed of .98% of the waste is sent for reuse or recycling and the rest of 2% is disposed of. The most important European regulations that they are complying with are : the Eu`s Restriction of the use of certain Hazardous Substances in Electrical and Electronic eQuipment(ROHS) Directive, the Waste Electrical and Electronic Equipment (WEEE) Directive in EU countries wich requires companies to take back and recycle used electrical and electronic equipment at the end of their useful life, the EU`s Registration,Evaluation,Authorisation and Restriction of Chemicals (REACH) Directive wich restricts the use of certain substances of high concern in any of the products that are selling .
From a cultural way, Vodafone is open to diversity as their CEO (Vittorio Colao,2018) said “We are committed to ensuring that our employees are drawn from diverse communities and societies. Our ambition to be one of the best employers for women in the world is central to that commitment.”Vodafone is launching as well a programme called ReConnect which is bringing talented women back into the workplace after a career break.The company is also launching a campaign called “Belong” which brings its commitment to diversity and inclusion to the forefront, the principles of “Belong” are to embrace employees from all different backgrounds.
According to Catalina Schveninger of Vodafone Group, the organization believes it “can only leverage diversity by building an inclusive culture where everyone is respected and strives to be their best — for our employees, our partners, the communities we work in and our customers.”
Vodafone’s employee base reflects that goal: 100,000 employees from 138 nationalities, based in 23 countries. Equally reflective of their D&I aspirations is the fact that 28% of management positions are held by women, with a goal of hitting 30% by 2020. Furthermore, internal surveys found that 89% of employees feel that they do belong within the organization.
Taking everything into consideration globalization is not just an intensification of the worldwide connections arranged through a marketplace, it is a global aspect determined by the capital as well which aims to build a global marketplace. Globalization it does have pros and cons, from increasing the trade between the nations, building organizations everywhere the environment is suitable for the business, opening the marketplaces and also remove the cultural barriers, and getting to the disadvantages which can include violating the rule of culture and religion , one country can economically disturb affecting all to difference of the labor cost.(B. Obama) said “Globalization is a fact, because of technology, because of an integrated global supply chain, because of changes in transportation. And we’re not going to be able to build a wall around that.” which I think is one of the best statements thinking of how fast everything is going, is not just about the telecommunication industry that is growing worldwide really fast I think all the major industries are extending globally.
Or how (B. Asjad, 2009) is saying In the current cellular service providing in the USA the most of the company charge extra bill by mistake. When any company representative call to a cellular company about the billing information they say it is a mistake and approximately 80% of USA business are overcharged on their bills. When you talk to any cellular company representative about all these issues they say they all r coming from day 1st.
As well as how (B.Midhat M.Sana, 2006) explains that globalization is breaking the gaps and epically its impact on telecommunication and information. Creating paradox between who have information and who have not. This revolution is providing a chance for everyone to contribute as much as they can. Now a day’s information systems are playing a major role in developments of countries and the telecommunication is one of them. In the current time of the world, people don’t have many things like food, shelter and water etc but they should have the telecommunication facilities to communicate the others. Today, the telecommunication has become a more dominant factor in the development of any country and it is playing a vital role as well. It is necessary to have better telecommunication faculties for every country.
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