With reference to one or two organization(s) that you have studied evaluate different approaches that businesses can adopt to respond to issues of globalization and ethics. Globalisation, being the increasing international integration of companies as a result of the emerging freedom of transport and movement, and Ethics, referring to the moral and environmental implications of a company’s actions, are vital elements to be considered in the direction and management of a business. This is made especially apparent in the application of various strategies and actions engaged in by Lenovo, the Chinese computer manufacturing company based in Hong Kong. It has responded to the increasing ease of globalisation by expanding itself through various large scale acquisitions, a quick, external form of expansion. It has also responded to a global issue of ethics through its Ethics and Compliance program, which aims to meet international regulations and law alongside the issues of internal ethical behaviour with regards to diversity and acceptance within the workplace. Lenovo has embraced increased globalisation through its strategies of external expansion, and as the leading computer manufacturer in the world, with $39 billion in 2014 sales, it has been able to make some recent high value acquisitions. One such is a segment of IBM’s chinese server operations, which Lenovo purchased for $2.3 billion in 2014, that was unprofitable under IBM management but which flourished under Lenovo - playing its part in leading to the record high 2014 sales. It has also acquired the recently Motorola owned Google Handset division for $2.9 billion in 2014. This aggressive acquisition policy has helped improve Lenovo’s market share worldwide. By engaging in external acquisitions, Lenovo was able to expand quicker than it would have been able to through internal methods while simultaneously improving its overall market and technology access. Through its global brand recognition, expansion, and sales, Lenovo has gained a number of new marketing advantages, such as increased funds towards global advertising campaigns or sponsorships, such as when it sponsored the 2008 olympic games; Lenovo spends around $500 million a year on marketing and it is largely due to this that it has such high global awareness, such as its 26.3% awareness in the US. Alongside this acquisition policy, Lenovo also operates with a dual headquarters in Beijing and North Carolina, meaning that its corporate structure is more decentralised and it has been able to recruit and retain greater technology and local talent, facilitating its growing strength in both Western and Eastern markets. This means that employees are able to operate in an environment where they feel more comfortable and connected to the upper management, potentially decreasing employee turnover and resulting in greater internal talent and therefore greater efficiency, innovation and ultimately, profitability. Similar to its response to globalisation, Lenovo has acted pro actively regarding the issues of ethics by implementing its Ethics and Compliance program, which promotes an ethical organisational culture throughout the company. This highlights its desire to adopt new policies to address prevalent issues and through such policies to not only promote the external ethical code of compliance with the law and environment, but also the internal issues of safety, welfare and diversity. Through this program, Lenovo clearly demonstrates its development as a corporate citizen by acting with good Corporate Social Responsibility with regards to both its internal and external stakeholders. Alongside these active policies, Lenovo also promotes a more subtle workplace attitude, increasing awareness of diversity and innovation, leading to a more heretic workplace where ethical codes are strong among employees and it is seen to be a very accepting company. This ethical transparency and the adoption of policies has been largely in response to the newly placed emphasis on ethics by consumers and the government, but Lenovo’s integration of these policies can be
seen as something going beyond the expected minimum measures, resulting in an increasingly favourable view of the company by consumers and a greater internal satisfaction among employees and managers that they are part of a vibrant and ethical company rather than a “soulless” corporation. This perception of the business, especially in Chinese markets where transparency and ethics are not largely adopted, can play a major role in the way in which consumers shop; they will be more likely to buy products from a company that they see as having good Corporate Social Responsibility rather than one which does not. Overall, Lenovo is a company that has seen many proactive policies and ideas in response to the issues of globalisation and ethics. Globalisation has been particularly addressed through aggressive expansion strategies as well as a multinational base of operations to address the broad market that Lenovo supplies. Ethics has been largely satiated through the Ethics and Compliance policy alongside the unmandated ethical workplace culture that has been developed within the company, likely having a greatly positive impact on its internal and external perception. Lenovo has done well to maintain itself alongside both of these issues and has benefitted greatly from it as it is still leading the global computer manufacturing industry in many aspects.
