21st Century Globalisation

21st Century
Globalisation

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Critical appraisal of fundamental factors contributing to globalisation.............................1
2. Critical evaluation of strategies for gaining entry into foreign markets.............................3
3. Strategic proposal for the expansion of a business.............................................................4
4. Critically assess both the ethical and sustainable implications of globalisation................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Globalisation can be referred to as the integration of people, economies, governments,
nations with an aim to capitalise on the flow of products and services from one country to
another. It has become the key to success for all the business organisations that are running and
functioning as a part of 21st century (Bende-Nabende, 2017). Globalisation fosters the removal of
trade barriers and the liberalisation of economic activities related to exchange of products as well
as services. In this regard, the present assignment is based upon Exergy Ltd. which is an
organisation involved in development of projects aimed at promoting sustainable development
and energy conservation such as Green Buildings & Cities, Green Processes & Industries and
Green & Innovative Organisations. This assignment consists of appraisal of fundamental factors
driving globalisation along with the strategies to enter new markets. Also, it comprises of a
strategic proposal for business expansion together with critical assessment of sustainable and
ethical consequences of globalisation.
1. Critical appraisal of fundamental factors contributing to globalisation
Globalisation can be referred to as the diminution of state-enforced restraints on
exchange of goods and services across national borders and the progressively complex system of
manufacturing and/or exchange that has resulted as a consequence. In this regard, Exergy
Limited is a company operating within the confines of United Kingdom and is involved in
preparation of sustainable projects, waste valorisation, energy assessments, process designs etc.
for clients (Projects, 2018). The vision of this organisation is to become a global sustainable
energy organisation by 2030 by capitalising upon renewable resources and projects to gain
recognition in market and significantly enhance its name and position. Looking forward to the
vision of entity, management of Exergy is planning to tap the advantage of globalisation to gain
entry into new foreign markets. The entity will enter new markets and provide services related to
project development thereby promoting the use of renewable resources such as solar energy. In
this regard, there are certain factors that have to be taken into account by managers of Exergy to
feasibly execute expansion into emerging markets:-
Political Stability: The political stability of a country attracts the attention of potential
businesses with a view to enhance the overall market share as well as sales. In this regard, being
an organisation which promotes sustainable development and utilisation of renewable resources,
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the top management of the company is looking forward to expand in countries which have
political stability. Some of the nations having political stability across the globe are Canada,
Australia, Germany, Switzerland (Hamilton and Webster, 2018). These can be selected as the
potential market to promote the sustainable and energy saving services of company. However, an
instance of political instability or terrorist attack within these nations may pose threat to the
projects of Exergy.
Population: The demographics of a nation also offers lucrative opportunities for a
company to tap advantage of globalisation while gaining entry into new markets. In this relation,
Exergy is an energy company which promotes sustainable development and has a vision to
become global sustainable organisation by 2030. In this regard, the major aim of this
organisation is to gain the attention of a large quantum of population. In this regard, China and
India are the most populated countries of the world where company can gain access and promote
sustainable energy development by creating green building, using solar panels etc. However, in
an instance where the population of new country does not like the concept brought in by Exergy,
it can act as a threat to sustainability of enterprise.
Energy Demand: This tends to be another crucial factor which fosters companies across
the globe to use globalisation as a measure to facilitate business growth and expansion. In this
regard, energy demand across the globe fosters Exergy to consider the option of gaining entry
into new markets where energy consumption is on a rise. In this relation, global energy demand
increased by around 2.1% in the year 2017 which was over twice the rate of previous year
(Global energy demand grew by 2.1% in 2017, and carbon emissions rose for the first time since
2014, 2019). This was facilitated by a strong worldwide economic growth with gas, oil coal
fulfilling the increased energy demand and renewable resources witnessing a significant gain.
This fosters Exergy to tap the advantage of this as an opportunity to gain entry into new markets
and enhance the existing level of sales and profits. Further, China and India are good markets for
Exergy to facilitate business expansion as both of these are among the top 5 energy consuming
countries (Total energy consumption, 2019). However, a sudden downfall in energy demand
within the new country can act as a threat for the country.
Market Effectiveness: The market effectiveness of countries tends to act as an optimum
driver for globalisation as this is a factor which attracts the attention of potential investors and
influence them to facilitate business expansion by gaining entry into such nations. In this regard,
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Energy Consumption is a sector which is creating rapid awareness among people and businesses
across the globe to focus on utilisation of renewable resources and sustainable development.
Exergy Ltd. Is an entity with a vision to become a global sustainable company by 2030 and is
focussing upon market expansion to promote this vision among maximum number of persons. To
communicate the vision to a large quantum as well as to take effective initiatives to achieve it,
organisation can gain entry into Canada and Switzerland as these are considered to be among the
top 10 countries for carrying out business owing to their high market effectiveness (The 10 top
countries for business in the world, 2019).
2. Critical evaluation of strategies for gaining entry into foreign markets
To formulate the vision of company of becoming a global sustainable organisation by
2030, Exergy is considering gaining entry into new and emerging markets. For this, post the
critical evaluation of factors impacting upon globalisation, the manager of this enterprise is now
looking into the available strategies that can be tapped to gain access into lucrative markets and
promote the concept of sustainability.
Joint Venture:
Joint venture refers to term partnership in which two or more companies work together at
international scale. In this, all of the engaged companies invested mostly equally and shares
profits accordingly in foreign area. Both of these companies work together for one common
project but they remain separate from each other in their regular based working (Hernández-
Perlines, Moreno-García and Yañez-Araque, 2016). With reference to present case, Exergy is
planning to expand its business in international market place. The company can go for this
strategy as it involves expertise of the same filed who hold high experience and could support
company in gaining competitive advantage. Along with this also provides better resources to
company through which they can establish business in effective. On the basis of evaluation, it
can be said that on one hand this strategy holds numerous of benefits but at the same time it
might become biggest hurdle in future success as in future both the involved company might face
clashes related to culture or other organisational issues.
Franchising:
It is defined as a type of business in which the owner of product or services provide
opportunity to franchisee for setting up a business with established brand image by using its
servicing idea and processes legally. This is one of the most prominent methods of expanding a
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business which help a franchisee to gain profit much quickly despite of working over any kind of
operations performed at initial stage for positioning (Mansouri, 2016). It is considered as the
most beneficial method of getting entered into new market at global level. This is because
Exergy will be able to expand its business much quickly and effectively at relatively lower cost,
for this company just have to search some trustworthy persons at new country to operate these
franchises and provide them training regarding the methods used to provide services. But despite
of this the major drawback of this mode is that inefficiency in operating the business franchise
leads to failure of Exergy company at new market and may also affect its brand image at other
places as well.
Licensing:
Licensing refers to agreement in which one company License to another company to use
its product. In this form of market entry strategy Licensor owns right to decide which product
can be used by another company and which one can not be. It mainly used to take advantage of
brand name which is held by Licensor in the market place (Schaltegger and Burritt, 2018). With
reference to Exergy, the major benefit which can be gained by this company is that it reduces
risk for both the indulge partners. On the other side the drawback of licensing is that licensee i.e.
Exergy may make a financial commitment regarding a technology for performing operation
which is not ready for commercial exploitation. This may adversely affect the brand image and
performance of company.
3. Strategic proposal for the expansion of a business
Executive Summary: Business expansion is the key to success of an organisation. In this
regard, Exergy is a company which is looking forward to gain entry into new markets with a
view to communicate its vision to a larger quantum of population.
Company Background: Exergy Ltd. is an organisation operating within the confines of
United Kingdom. This enterprise has been promoting the concept of sustainable development
within the country by engaging in provision of services such as construction of Green Buildings,
solar projects etc. This entity capitalises on the use of renewable sources and earns high
reputation across the domestic market, thereby generating huge revenues and profits.
Vision: To become a global sustainable company by the year 2030.
Mission: To offer high quality products and services with a view to promote
sustainability across the globe.
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Marketing Analysis: Exergy has conducted thorough research upon the markets based on
a number of parameters which enables the manager to decide upon the most suitable and
appropriate market for carrying out expansion of operations of company. This expansion would
assist the organisation in significantly expanding its market share and consequently, the sales and
profitability of business (Wood, Dibben and Meira, 2016).
Marketing Strategy: In this regard, the marketing strategy that has been decided upon to
be tapped by the business is social media marketing and extensive marketing by way of flyers
and audio and video-promos. This is being done with a view to gain the attention of the
population of newly entered country towards the sustainable projects of entity (Buckley, Burton
and Mirza, 2016). This will assist the organisation to achieve its vision and significantly enhance
its sales and profitability. Further, the use of renewable sources and adoption of sustainable
development will be promoted by entity so as to give their contribution towards the
environmental perspectives of business.
Competition: Across the globe, some of the leading competitors for Exergy are Cypress
Creek Renewables, NextEra Energy Resources, Exxon Mobil Corporation, Invenergy LLC,
Royal Dutch Shell, EcoPlexus, Xcel Energy Chevron Corporation, PetroChina, Sinopec etc. (Top
10 Renewable Energy Companies, 2019). Thus, the management will have to ensure that the
organisation does adequate marketing so as to build a loyal customer base within a small course
of time. This will assist the company in gaining an edge over rivals in marketplace.
Financial Planning: To carry out business expansion, an entity needs to procure
resources and for that, heavy investment is required. Not all the times, an organisation is able to
do whole self funding for the expansion project (Morley, Heraty and Michailova, 2016). In this
regard, Exergy has decided that the funds required for carrying out expansion by tapping the
advantage of globalisation will be half self funded and the other half would be procured by way
of taking a bank loan. The bank loan will be taken against hypothecation of assets.
4. Critically assess both the ethical and sustainable implications of globalisation
Across the globe, every business organisation is a part of wild race in order to acquire a
large market share by way of employing effective strategies and other short cut means. While
carrying out this process, companies sometimes get involved in carrying out the activities which
are not in the interest of environment and society. This gives rise to the need of ethical and
sustainable considerations which can ensure that business does not indulge in unethical code of
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conduct and practices. Ethics and sustainability have become the two most dominant aspects that
need to be taken into account by a company to prevail in marketplace for a long period of time
(Kumar, Rahman and Chan, 2017). They have the crucial components of corporate world. Owing
to the rapid and advanced globalisation of production processes as well as markets, increasing
quantum of business entities have to tackle the ethical and sustainable issues within the cross-
national and cross-cultural settings.
The positive influences of globalisation in terms of ethical and sustainable aspects for
Exergy are noted below:-
Stakeholders: Influence
Shareholders: An entity that tends to take ethical decisions in favour of shareholders gain
acceptance and support from them while moving to new countries. Thus, Exergy should act in
the interest of shareholders so as to ensure its sustainability in market for a long duration of time
Employees: Globalisation tends to raise opportunities for employees. Ethical conduct on the part
of Exergy will assist them in integrating their individual goal with the vision of company (to
become global sustainable organisation by 2030).
Government: Globalisation allows collaboration among the governments spread across the
geographical boundaries. In relation to the present case, Exergy is a company which promotes
the concept of sustainable development and utilisation of renewable resources. This will enable
government of foreign countries to also promote this social cause so that resources can be saved
and profits can be earned by capitalising on sustainable practices of entity (Buckley, Doh, and
Benischke, 2017).
Customers: Globalisation allows companies to render wide variety of products to customers. The
consumers procure cheap products yet learn the manner to use them in an ethical and responsible
manner without causing harm to environment (Lynch and Jin, 2016). In this regard, Exergy is
involved in development of sustainable projects and thus, the services provided to clients by this
organisation aim at teaching people also to adopt ways in which they can carry out sustainable
development and contribute to achievement of Exergy’s vision.
The negative ethical and sustainable influences of Globalization on International
functional areas of Exergy are listed below:-
Functional Area: Issue
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HRM: Some of the prominent issues that prevail in context of moving business outside the
confines of domestic territory with the help of globalisation are cultural differences, fraud, child
labour, sexual harassment, objectivity issues while hiring, promotions and compensations. In this
regard, if Exergy gets involved in any of the before mentioned instances or any other key HRM
issue, this will be a violation of ethical and sustainable code of conduct of business.
ICT: The internet, global satellite linkages, private exchanges, RFID and other such types of
advanced technologies behold great promise in relation to allowing international supply chains to
operate in a more effective manner thereby providing quicker response to customer demands
(Whittall and et. al., 2017). However, such types of technologies also present ethical and
sustainable challenges for firms functioning within the global market place. This has to be taken
into account by management of Exergy so as to ensure that company sustains in international
market/markets for long term. For this, entity should provide training sessions to workforce
before implementation of a new technique with a view to achieve its vision of becoming global
sustainable entity by 2030.
CONCLUSION
On the basis of above discussion, it has been concluded that globalisation is a key aspect
that should be taken into account by business organisation to facilitate growth and expansion of
entities. Further, it has been analysed that there are a number of factors that act as drivers for
globalisation to be tapped by a business enterprise. However, these drivers also face critique
from people which is why organisations have to be very careful while taking a move such as
business expansion by way of gaining entry into new markets. Besides this, it has been observed
that there are a number of strategies that can be adopted by companies to gain entry into new
foreign markets. The most feasible ones out of all are found to be Licensing, Franchising and
Joint Venture out of which one should be taken into use by company. Additionally, it has been
ascertained that effective marketing strategies such as social media marketing, promotion
through flyers and online tools should be used to gain attention of people within the new foreign
markets. In addition to this, it has been examined that there are certain ethical and sustainable
implications of globalisation which should be taken into account by organisation to exist in new
international marketplace for a long duration of time.
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REFERENCES
Books and Journals
Bende-Nabende, A., 2017. Globalisation, FDI, regional integration and sustainable
development: theory, evidence and policy. Routledge.
Buckley, P.J., Burton, F. and Mirza, H. eds., 2016. The strategy and organization of international
business. Springer.
Buckley, P.J., Doh, J.P. and Benischke, M.H., 2017. Towards a renaissance in international
business research? Big questions, grand challenges, and the future of IB
scholarship. Journal of International Business Studies, 48(9), pp.1045-1064.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hernández-Perlines, F., Moreno-García, J. and Yañez-Araque, B., 2016. The mediating role of
competitive strategy in international entrepreneurial orientation. Journal of Business
Research, 69(11), pp.5383-5389.
Kumar, D., Rahman, Z. and Chan, F.T., 2017. A fuzzy AHP and fuzzy multi-objective linear
programming model for order allocation in a sustainable supply chain: A case
study. International Journal of Computer Integrated Manufacturing, 30(6), pp.535-551.
Lynch, R. and Jin, Z., 2016. Knowledge and innovation in emerging market multinationals: The
expansion paradox. Journal of Business Research, 69(5), pp.1593-1597.
Mansouri, N., 2016. A case study of Volkswagen unethical practice in diesel emission
test. International Journal of Science and Engineering Applications, 5(4), pp.211-216.
Morley, M.J., Heraty, N. and Michailova, S., 2016. Managing human resources in Central and
Eastern Europe. Routledge.
Schaltegger, S. and Burritt, R., 2018. Business cases and corporate engagement with
sustainability: Differentiating ethical motivations. Journal of Business Ethics, 147(2),
pp.241-259.
Whittall, M. and et. al., 2017. Workplace trade union engagement with European Works Councils
and transnational agreements: The case of Volkswagen Europe. European Journal of
Industrial Relations, 23(4), pp.397-414.
Wood, G., Dibben, P. and Meira, J., 2016. Knowledge transfer within strategic partnerships: the
case of HRM in the Brazilian motor industry supply chain. The International Journal of
Human Resource Management, 27(20), pp.2398-2414.
Online
Global energy demand grew by 2.1% in 2017, and carbon emissions rose for the first time since
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<https://www.iea.org/newsroom/news/2018/march/global-energy-demand-grew-by-21-
in-2017-and-carbon-emissions-rose-for-the-firs.html>.
Projects. 2018. [Online]. Available Through:<https://exergy-global.com/experience/>.
The 10 top countries for business in the world. 2019. [Online]. Available Through:
<https://www.inc.com/peter-economy/these-are-the-10-top-countries-for-business-in-
the-world.html>.
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Total energy consumption. 2019. [Online]. Available Through:
<https://www.iea.org/newsroom/news/2018/march/global-energy-demand-grew-by-21-
in-2017-and-carbon-emissions-rose-for-the-firs.html>.
Top 10 Renewable Energy Companies. 2019. [Online]. Available Through:
<https://energyacuity.com/blog/top-10-renewable-energy-companies/>.
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