Globalisation

Globalisation is the term used to describe the changes in societies and the world economy stemming from dramatically increased economic liberalisation, technological innovation and capital market developments. People are more connected to each other than ever before, thanks to the ease of international travel and the speed of modern technology. Information is instantly shared and available, capital is abundant, and talent is emerging all over the world with access to high-quality education, giving rise to new competitors and potential technological breakthroughs. For industry, this increasingly interconnected marketplace is a welcome opportunity to grow businesses and contribute positively to local and national economies.

However, this interconnectedness and the emergence of a global market raise new concerns about the responsibility of corporations. Globalisation, in its current form, is not viewed to be sustainable by many critics as it fails to provide balanced economic development to poorer countries. Increasingly, business leaders are called upon to recognise and respond to global challenges such as poverty, hunger and disease.

Globalisation calls upon companies to respect local cultures while living up to the core values of the company. Business is seen as a positive force in changing local conditions for the better by demanding more accountability and transparency. All of these issues pose leadership challenges for companies as they seek to take advantage of globalisation while dealing with the dilemmas that are an inherent part of a global marketplace.

Novo Nordisk views globalisation as an opportunity to retain its competitive edge as a focused pharmaceutical company through market expansion, global sourcing, and building a diverse workforce. With global expansion, the company achieves significant business benefits and helps build healthier societies through the provision of its core products and services. But the company recognises that these are transitions that must be handled responsibly.

Novo Nordisk recognises its role in supporting balanced economic growth and assumes a particular responsibility wherever the company has a local presence. Global outreach and a strong international mindset are required in a globalised economy, as well as consistent values, global standards of business conduct and a readiness to deal with the concerns of those affected by the impact of globalisation. 

Novo Nordisk believes that, in order to be successful and competitive, it must become increasingly global. This implies many challenges, but also opportunities in the form of access to such markets, innovation, talent and low-cost manufacturing environments.

In terms of R&D, globalisation has implications for innovation and development of knowledge. Novo Nordisk has responded by establishing R&D centres in China and the US to tap talent and existing knowledge in the field.

Emerging markets and their keen interest in being players in the global market and stimulating economic development has opened up growth opportunities and access to new markets. These emerging markets offer a number of advantages, including access to talent, low labour cost and high productivity. Novo Nordisk is expanding its international operations in countries such as Brazil and China. Such expansion can directly boost local economies through employment and tax revenue, as well as indirectly by creating jobs for suppliers.

However, while globalisation may offer opportunities for employment and economic growth in new markets, it can have implications for other employees in the company. At Novo Nordisk, top management has taken an open and proactive approach to address the concerns of employees in Denmark about the impact of  the company’s decision to expand production outside of Denmark — the company’s traditional and largest production base. This includes:

• Meetings held in 2005 where employees had the opportunity to pose questions about the impact of globalisation to Novo Nordisk CEO Lars Rebien Sørensen.
• The creation of a Job Transfer Center for production employees in Denmark from downsized Danish production sites to register their skills and preferences and be referred to jobs and relevant training with Novo Nordisk. Since May 2004, 166 employees have received a new job at Novo Nordisk through the centre.
• A Future Workplace Project, in which trade unions in Denmark and company management explored conditions for development opportunities in operations in Denmark over the next 10 years. The findings were later shared with the European Working Council.

Globalisation also has huge implications for leadership. Running a global corporation means developing future talent to have a global mindset, possess strong traits and values, the ability to work across cultures, manage dilemmas, and the ability to leverage diversity effectively to lead people from different cultural backgrounds. To address this, Novo Nordisk has made internationalisation, mobility and diversity the cornerstones of its People Strategy.

In recognition that business has a role to play in responding to global challenges such as poverty, hunger and disease, Novo Nordisk works actively to promote access to health.

In order to better understand and respond to the dilemmas around globalisation, Novo Nordisk actively engages with stakeholders.

Establishing business and operations across diverse cultural and political boundaries exposes the company to a host of ethical challenges around issues such as labour rights, human rights and bribery and corruption. Novo Nordisk addresses these issues through its way of management, Triple Bottom Line approach and policies and procedures regarding business conduct and human rights. The company’s Supply Chain Management programme also seeks to ascertain that its suppliers worldwide are also meeting universal standards with regard to environmental performance and human rights.

In 2006 Novo Nordisk will take a systematic look at the risks and opportunities emanating from globalisation. Senior management will have the opportunity to explore the challenges and opportunities in reconciling competitive needs and consumer demands with societal expectations around globalisation. By better understanding these trends, it will be possible to frame appropriate strategies for operating successfully in a globalised world. Novo Nordisk will engage with both external thought leaders and think tanks to understand the implications of the issues. Based on the engagement and the analysis, a set of recommendations will be provided.

This page has been assessed by PricewaterhouseCoopers as part of its assessment of Novo Nordisk’s statement that it reports ‘in accordance’ with GRI. Please refer to Audit and assurance for a full description of the nature of assurance offered.