Influences of Globalization on Organizational Governance and Leadership

Running head: ASSESSMENT
ASSESSMENT
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1ASSESSMENT
Table of Contents
Unit 18.............................................................................................................................................2
1 Analyse key factors of cost, market, environment and competition that drive global commerce
and trade...........................................................................................................................................2
2. Explain the complexity of strategic challenges faced by organizations when operating in a
global environment supported by specific examples.......................................................................5
3. Evaluate the influences of globalization on organizational governance and leadership,
structure, culture and functions........................................................................................................9
4. Evaluate the influences of ethical and sustainable globalization on organizational functions..13
5 Evaluate the different ways decision making can work effectively in a global context.............16
6 Determine and articulate the various routes to internationalization an organization may adopt,
including key barriers....................................................................................................................19
Bibliography..................................................................................................................................21

2ASSESSMENT
Unit 18
1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade
The global business environment can be understood to be very competitive in nature and
with respect to this, it can be largely understood that the aspect of Globalization has had a strong
influence on all the modern aspects of life. The globalization and its impacts can be largely
linked to the national, regional as well as the local environment. From self-contained countries,
the globe is moving towards an integrated business environment which then enables the different
members of the organization to perform as per the international rules and standards. In line of
this, it can be rightfully mentioned that, technology, transportation and improvised
communication systems are some of the mediums which have been able to assist the firm in
performing well. In addition to this, as the trade barriers have reduced considerably, it has
become comparatively easier for the businesses to carry out their operations1. However, it needs
to be understood that the process of Globalization is driven by four different factors. These
factors are the factors of Cost, Market, Environment and Competition. The report will be
discussing these factors and outlining the theoretical frameworks present in each framework.
Cost factor
The cost factors largely comprise of the economies of scale and scope, the experience
effects which are underwent by a firm, the exploiting differences in the factor costs for the
purpose of product development, the manufacturing as present and the sourcing in the different
international counties of the globe tend to form a crucial aspect of the cost factor of the factor
1 Ansoff, H. Igor, et al. Implanting strategic management. Springer, 2018.

3ASSESSMENT
related to Globalization. These factors can be understood to have a greater role to play in the
global strategy and it is with respect to this, that it becomes considerably important for the
managers to ensure that if they want their firm to attain success in the long run, they would be
required to see to it that, they are being able to take into consideration the different factors of
cost as present. Moreover, it also has to be understood that the Globalization and economic scope
tend to have a great impact on the overall performance of the firm and if more new economies
come up then it becomes a competitive threat for the overall business organizations as present in
the different countries.
In addition to this, it also has to be understood that, the bottom line of these factors lies
that no single market is capable enough to support a competitive strategy on a global scale in the
different industries as present2. Hence, it is for this reason that the global scale and scope
economies are being able to have far reaching effects which then go a long way in ensuring that
on one hand, if the economies of scale and scope shape the different strategies of the incumbents
in the industries, it makes it considerably hard for the new entrants to develop an effective
competitive threat and hence, in such a scenario, the barriers increase and the rivalry amongst the
current members also increase which reflect upon the broadening scope of competition which
takes place and also widens the dependency of national and regional markets which then reflects
the true differentiation in such a competitive business environment may be difficult to attain.
Environment
The business environment can also be understood to be a crucial driver for the overall
success of the workplace as present around the globe. This relates to the factors like Political
environment, Socio cultural and economic environment. It needs to be understood that, as the
2 Ansoff, H. Igor, et al. Implanting strategic management. Springer, 2018.

4ASSESSMENT
socio cultural trends have become more open and the people as present in the different cultures
are now willing to interact with one another more easily and openly, it is important to understand
that, these have also led to the easing down of various laws and other related legislatives. With
respect to this, it can be mentioned that, the business has become comparatively easier to
conduct.
Market
Another crucial factor which tends to have an impact on the overall operations of the
globalization and related factors can be stated to be the factor of Market. This determines that
globalization is greatly affected by the fact whether the market characteristics are global or local.
It is important to note that, as the individuals present in different countries often demand the
similar products as well as the services, the taste preferences are the only aspect which vary the
product and line of this, it becomes important to ensure that cultural variables like income and
standard of living are taken into consideration all along3. The strategy as used by Coca Cola can
be understood to be appropriate for the global environment as it takes into consideration different
formulas in every other country.
Competition
Competition also plays a crucial role in the business and in order to ensure that, all the
companies perform considerably well, the global rivals often tend to intensify the function of
marketing so as to see to it that, the organization would be successfully attain a sustainable
advantage. If this function is weakened then the organization may become susceptible to market
share erosion around the globe. In addition to this, the companies who are competitive in nature
often tend to introduce, upgrade as well as distribute the new products faster than before.
3 Ansoff, H. Igor, et al. Implanting strategic management. Springer, 2018.

5ASSESSMENT
Moreover, it is important to note that, all companies need to undertake considerable initiatives to
ensure that, the competition risks which are present can be combatted against easily. Moreover, it
is only the leading companies which drive the procedure of globalization. The opportunistic
behavior of Coca cola can be understood to be the reason why the soft drink market is way ahead
than the beer and spirits stage. In addition to this, with the four global drivers becoming more
crucial with time, it is important to note that, the different businesses would now be required to
undertake considerable initiatives in order to ensure that, they are able to target the low income
companies more and are able to take advantage of the openness and advancement in general4.
Hence, from the given analysis it could be understood how, the different factors related to
cost, market, the environment and the competition impact the globalization.
2. Explain the complexity of strategic challenges faced by organizations when operating in
a global environment supported by specific examples
The global environment can be largely understood to be very dynamic in nature and it
becomes considerably important, with respect to this, to ensure that the different players as
present in the business environment are successfully able to face these challenges and be
prepared to ensure that in the future, they are successfully able to overcome these challenges and
ensure success in the long run. Hence, the main aim of the report is to outline the different
challenges which are faced by the different organizations when operating in the global
environment and to also outline the complexity of these challenges.
The different challenges which are faced by the various businesses as present in the
global environment can be stated to be the challenges relating to the Collaboration, agility,
4 David, Fred R., and Forest R. David. Strategic management: A competitive advantage approach, concepts and
cases. Pearson, 2016.