The March 4, 2015 HSBC article, titled “Trends to Watch for Business – HSBC Global Connections,” raises the question if a strong US dollar poses a positive impact on the global economy. Although consumer confidence in the United States has seen an increase in spending, other sectors, including local, international, and small businesses abroad tend to reap a counter effect because of a decreased demand for tangible goods. This means that food and clothing, as well as virtual goods, such as internet, telecommunications, and other technological products, have become an integral part of the spending habits of consumers since finding the best price is a matter of a few clicks on one’s computer or phone. Muriel E. Scott’s (2013) case analysis explains the rising significance of global virtual teams (GVTs), which are teams or groups that work in distant physical locations, but lack the interpersonal interaction with each other, including internal and external stakeholders. However, in order to remain competitive in a global market, US companies will need to implement GVTs as well as technological advances (“Trends to Watch,” 2015). The global increase in outsourcing services in recent years can be attributed to the rising presence of GVTs. The effect and resources of GVTs are synonymous with the global impact of the rapid rise of the US dollar. Since the monetary exchange of investments is done in a virtual environment, the consequences to the livelihood of human workers, as well as tangible end-products, could result in a seismic economic shift.
The most obvious effect of GVTs is that money exchange through the use of credit cards and electronic monetary transfers has evolved into a paperless commodity. The elimination of physical currency, including the use of lumber or the mining of ore for minting coins, which are all labor-based occupations, could displace thousands from their livelihood. We may also consider GVT based customer service further impacted by displacing overseas customer service technicians with computer generated avatars or computer bots (not bot.exe, which is a malware designed to sabotage) staffed by one or two individuals thousands of mile apart, further evolving the GVT scenario.
Similarly, for a more pertinent “real world” example, Bill Gates spearheaded the invention of “super rice,” through money spent in research through his philanthropic organization. On the one hand, this invention could inevitably displace rice growers all over the world, but on the other hand, could remedy global hunger (XINHUA, 2015). The problem raised is that the invention of “super rice” could potentially save starving nations such as China and Africa, yet the global economy could experience a catastrophic backlash because of workers displaced by GVTs. If the US Dollar goes up in value, the cost of “super rice” will go up too much to be cost-effective in feeding starving nations.
The HSBC article suggests that while the accelerated rate of the dollar increased US consumer confidence, businesses impacted locally and abroad do not necessarily reap the benefits of this growth spurt. However, what the article does not tell us is the types of products bought by consumers as well as the types of investments (foreign or local) that are being sold/bought. James E. Gruenig’s Excellence Theory (as cited in Bowen, 2008) states that the symmetrical exchange of communication between stakeholders is fundamental to good public relation practices and is beneficial to everyone. The same principle with the exchange of symmetrical communication can be applied to currency, whether it is in the form of foreign investment or a personal loan. From its origin as a small lending company known as Household Finance Corp., in 1878, by founder Frank J. Mackey of Minneapolis, Minnesota, HSBC evolved into the world’s sixth largest lending institution of MasterCard worldwide. With its headquarters based in O’Fallon, MO, HSBC oversees offices globally, meaning that the company developed into one of the leaders in its industry. It is necessary to acknowledge that the use of GVTs was not always the case in HSBC’s business practices. Prior to its acquisitions, the company would integrate J.E. Gruenig’s (as cited in Bowen, 2008) symmetrical theory when dealing with their customers. The question remains, how many individuals are needed to run these branches? How many of these individuals make the decisions that impact governments, and other institutions? And, how many individuals are needed or need elimination because of GVTs in the private sector? And lastly, what impact would these changes make on the global economy if implemented?
What are your thoughts?