Influence of Globalisation on Organisational Strategy and Decision Making

This business report explores the influence of globalisation on organisational strategy and decision making. It discusses the different types, sizes, and scopes of organisations, the interrelationship of functions in organisational structure, the impact of internal and external environments on business operations, and the influence of globalisation on organisational strategy and decision making. The report focuses on Tesco plc as a case study.

Business report
Table of Contents

Topic of Business report:.................................................................................................................1
“Influence of Globalisation on organisational strategy and decision making"................................1
INTRODUCTION...........................................................................................................................1
Company’s Overview.............................................................................................................1
Literature Review.............................................................................................................................1
Different type, size and scope of organisation.......................................................................2
Interrelationship of functions in organisational structure.......................................................2
Impact of Internal and external environment on business operations....................................3
Influence of globalisation on organisational strategy and decision making...........................3
Discussion and Analysis..................................................................................................................4
Type, Size and scope of Tesco plc.........................................................................................4
Impact of interrelationship of functions on organisation structure of Tesco..........................4
Impact of internal and external environment on Tesco using SWOT and PESTEL analysis 5
Influence of globalisation on organisational strategy and decision making of Tesco............7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

Topic of Business report:
“Influence of Globalisation on organisational strategy and decision
making"
INTRODUCTION
Globalisation is a vast concept that leads to enhanced connection and integration among
different parts, economies and culture of world that facilitates easy movement and sharing of
goods, technology, information, individuals and other services among different countries and
nations of world (Hu and Haddud, 2020). Thus, the main purpose of current business report is to
evaluate about the influence lead by Globalisation on organisational strategy and decision
making. Further a discussion about different type, size and scope of orgnisation along with
interrelation of functions on organisational structure is included in literature review. And finally,
discussion about impact of internal and external factors along with influence lead by
globalisation is also forms part of this business report.
Company’s Overview
The orgnisation selected for current business report is Tesco plc which is a leading
multinational supermarket and British Retailer the headquarter of which is suited at
Hertfordshire, England, United Kingdom. A wide range of product is provided by Tesco that
caters every possible need of its consumers which includes food, electronics, clothing, home
accessories, stationary, cosmetic, etc. At present Tesco is operating in various countries of world
which consist of UK, Ireland, China and many other countries with more than 3500 stores and
around 400,000 employees that are serving a vast number of customers across the world (Tesco,
2020).
Literature Review
Literature Review forms a vital Part of every report that facilitates better understanding and
information about various crucial aspects of a topic with the help of review and survey of various
online articles and authentic and reliable journal and other sources of Literatures (Liu and
Jayaraman, 2019). Following literature review are conducted to evaluate more about curt topic
and various aspects associated with this, an explanation of which is provided below:
1

Different type, size and scope of organisation
As per the view point of Turner, J. R. and Lecoeuvre, L., 2017, the different type of
orgnisation on the basis of their size consists of small organisation, medium size orgnisation and
large organisation. An explanation abut these different types of organisations along with their
scope is provided below:
Small size organisations- These are the orgnisation that have access to limited resources
and employ a small number of employees less than 50 individuals thus, have a simple structure.
The scope of small business are limited up to meeting the basic needs and amenities of family
member and are restricted up to local or domestic market only. And being a small size
orgnisation, these ventures mainly have flat organisational structure or type (Size of the
Organization and Information Requirements, 2020).
Medium Sized Organisations- As per the description provided by Richard Jobling, 2020,
these organisation manly consist a medium sized firm or partnership business that are bigger than
small orgnisation are have more than 100 employees but less than 250 employees. The main aim
of medium size orgnisation consist of making best possible use of resources to gain higher
profits and there scope is limited unto city or national level. Mostly use of functional structure is
made by Medium sized organisations to have clarity in there operations.
Large size organisation- These organisations are having large workforces mainly more
than 250 employees and operates at national and international level. The scope of large
orgnisation is quite wide that consist of many activities and serving a larger number of
customers. Thus, large organisations mainly have functional or divisional organisational
structure to reduce the complexity and chances of chaos in its business functions and operations .
Interrelationship of functions in organisational structure
As per the view point of Fraser Sherman, 2019, a direct and closed relationship exists
between functions and organisational structure as organisational structure represent a compete
system that exists within an organisations and reflects how various activities are directed and
conducted to achieve desired gaols along with controlling the flow of operations within a
company. It has been evaluated that functional organisational structure is related with functions
as it separate all departments on basis of function which lead to a more clear chain of command
and lead to better concentration of each function on particular mission (Herold and Lee, 2019).
On the other hand divisional structure spread functions of an orgnisation across different
2

branches with different product lines where employees of each branch or division are performing
identical function. Further, it has been evaluated that Matrix organisational structure lead to more
flexibility in business functions where each employee works in a function-based department,
under different managers and teamed with employees who have different functions. Thus, the
relationship between function and matrix structure lead to better adoption of organisational
changing needs (Orekhovskaya and et. al., 2018).
Impact of Internal and external environment on business operations
As per the view point of Hatim Abukhames, 2015, a crucial impact is lead by internal
environment on operations of business as these are that factors and aspect on which the main
operations and functions of a company depends. The internal factors that lead to impact on
organisational functions consist of Human resources, financial resources and physical resources.
Human resources lead a significant impact on business operations as employees are the vital
aspect on which the efficiency and productivity of all operations depends as they are the one who
actually conduct or carry out all operations. Financial resources also lead significant impact on
operations as the smooth flow of functions are depended on monetary funds to meet the day to
day expenses of a company (Zafar, Saud and Hou, 2019). Finally the physical resources like
location, innovation, machinery, etc also create impact in business operations as these are factors
that makes operations of an orgnisation better than other competitors and ensures enhanced
viability and efficiency of business functions.
On the other hand as per the information provided by the Ibrahim, E.B. and Harrison, T.,
2019, the external factors like customers, suppliers, political, social, economically, legal, etc lead
to significant affect on business operations as the productivity of an orgnisation is depended in
the number of target customers. Further, free flow of production and delivery functions is greatly
depended on suppliers. Beside this, the business operations are also affected in both positive and
negative way by the stability of political and economical factors (What Are Internal & External
Environmental Factors That Affect Business, 2020).
Influence of globalisation on organisational strategy and decision making
As per the information provided by Moak, K., 2017, globalisation lead to a significant
influence on organisational strategy and decision making of an orgnisation as globalisation lead
to better expansion and growth opportunity for business firms. Thus, the strategy of
organisations is now based on better expansion options and effective planning to achieve better
3

growth. Further, globalisation has also lead to a dynamic change in demand and preference of
customers who present at global level thus, more flexible and dynamic decision making and
strategy formulation are needed by organisation to keep a balance with dynamic behaviours of
customers (How Does Globalisation Influence Organisational Decision Making and Strategy?,
2019). Further, high level of competition is also created by globalisation that has hampered
productivity of an orgnisation but at the same lead to assess and reach to more innovative
technology that has enhance viability and efficiency level of operations of an organisation and
also lead to more cost and time efficiency in business operations (Tu, Suweis and D’Odorico,
2019).
Discussion and Analysis
Type, Size and scope of Tesco plc.
Tesco plc is basically a large size multinomial British readier and supermarket that is
currently having more 3500 stores across the world along with more than 400000 employees
thus, it is clear and justifiable that Tesco is a large organisations having its business operations in
UK, China, Ireland and many other locations of world (Tesco Plc, 2020). The type of Tesco on
the basis of industry in which it operates is supermarket and big multinational retailer. The scope
of Tesco is directly associated with its market size market into which it sells its products and
services, thus the scope of Tesco is quite wide as it is already the largest retailer in UK and is
also planning to expand to US and has already set up a wide markets in many locations of
Europe and Asia.
Impact of interrelationship of functions on organisation structure of Tesco
Tesco is having a highly hierarchical organizational structure that basically reflects use of
functional organisational structure in Tesco. Under the organisational structure of Tesco all
Functions are properly bifurcated on the basis of nature of work and skills required (Tesco,
2020). A close interrelationship between functions and organisational structure of Tesco is seen
which lead to a positive impact on overall performance and productivity of Tesco as all the work
and order of command are properly bifurcated and clearly stated that ensures reduction in chaos
and confusion through leading effective communication (Zaidi and et. al., 2019). Thus,
interrelationship of functions on organisation structure of Tesco lead to better coordination and
4

smooth operations and free flow of functions through ensuring effective communication and
better connection at workplace thus, lead to a positive impact on Tesco.
Impact of internal and external environment on Tesco using SWOT and PESTEL analysis
The internal environment consists of evaluation of internal capabilities and weakness thus,
to evaluate the impact of internal environment on Tesco use of SWOT analysis is made. SWOT
is tool that provided information about the internal strengths and weakness of an orgnisation
along with existing opportunity and threat so that better evaluation of their impact on
organisation can be made easily (Orekhovskaya and et. al., 2018). SWOT analysis of Tesco plc
is provided below in following table that is providing the examination about the impact of
internal environment on Tesco:
Strengths Weakness
 It is the biggest retailer of UK with rich
brand image and enhanced goodwill
that plays a vital role in attracting larger
number of customers (TESCO SWOT
Analysis 2019 | SWOT analysis of
TESCO, 2019).
 A wide range of product portfolio that
meets and cater the all the needs of
customer is also a strength of Tesco
that lead to positive impact on its
performance and productivity.
Poor operational performance in specific
markets that consist of US and Japan are the
main weakness of Tesco that is hampering its
business expansion and growth (Liu and
Jayaraman, 2019).
Opportunity Threat
 Online operations and digital stores
lead to an enhanced growth opportunity
and better expansion for Tesco along
with leading digital market to cater
larger number of customers.
 The high level of competition
prevailing in the retail sector of UK and
other business locations is the biggest
threat for Tesco that is limiting its
profit margin a success level.
PESTEL analysis
5

To get better evaluation of impact of external environment on business operations of
Tesco, following PESTEL analysis is conducted which consist of six main factors that are
evaluated below in context of Tesco;
Political- These factors are mainly associated with attitude and behaviour of government
and political parties towards business organisations including all the trade policies and barriers.
The political environment of UK is normally stable but recently the Brexit issues has lead to
many challenges for Tesco and hampered its business operations as strict trade policy are faced
by Tesco that negatively impacted its transactions with other European countries (Hu and
Haddud, 2020).
Economical- These external factors are mainly associated with growth rate, inflation,
deflation, bank rates and other economic aspects like level of demand and employment. To cope
up with the dynamic changes in economy and current slow down lead by Brexit issues, strategy
of diversification and more emphasis on internationalisation is lead by Tesco Plc.
Social- It reflects the attitude and recent trend prevailing in the society of a nations. A
shift towards cheap and economic products is seen in society of UK thus, a change and impact is
also seen strategy and operations of Tesco as now it is delivering more products at lower price to
attract larger section of customers (Tesco Plc, 2020).
Technological- This factor reflects the level of technology in a nations, UK is quite rich
in technological advancement and innovation. This, has lead to a positive impact on operations
of Tesco as it offer a better way to operate through online stores and make efficient use of digital
tool and social media marketing to attract and cater larger number of customers.
Environmental- A high level of awareness is seen in customers and government of UK
that has lead to significant impact on business operations of Tesco as it become more vital and
essential for Tesco to operate in an eco-friendly manner and minimize emission of carbon in its
operations.
Legal- This aspect of environmental factors also leading influence on Tesco through
making it essential to adopt and implement all provisions of health and safety act, equality act,
2010 and all other legal provisions to ensures smooth and uninterrupted operations (Herold and
Lee, 2019).
6

Influence of globalisation on organisational strategy and decision making of Tesco
Globalisation is a complex concept that lead to enhanced connection and better
integration among global economies that lead to significant positive and negative impacts on an
organisation that lead to influence on overall organisational strategy and decision making.
Following points are reflecting the influence of globalisation on organisational strategy and
decision making of Tesco:
Cost efficiency in operations through automation- The first and foremost influence lead
by globalisation on Tesco is that its strategy and business operations are now more automated
due to enhanced assess and reach to global technology and use of digital technology has also
enhanced that lead to cost efficiency in operations and strategy implication of Tesco. Further,
automation of operations also lead to effective decision making through leading better access to
information and relevant facts (Zafar, Saud and Hou, 2019).
Dynamic nature of customer at global level- The another influence of globalisation
consists of dynamic nature of global customers that lead an influence on strategy of Tesco as it
need to have more flexibility and adaptability in its strategy to cater and attract larger number of
customers at global level through meeting dynamic needs of customers.
High level of competition- The concept of globalisation has also lead to an increased
competition level for Tesco that influences its business strategy through emphasising more on
innovation and better policies along with providing better and superior quality products to
customers to have better competitive strength and business position (Tu, Suweis and D’Odorico,
2019). Further, more firm and effective decision making along with digital marketing and use of
online platforms is also required by Tesco to ensure better competitive strength and superior
position at global level.
CONCLUSION
With respect to above business report it has been evaluated that there are various types of
organisation on the basis of their size which consist of small, medium and large size orgnisation.
Further, it has been evaluated that an interrelationship between functions and organisational
structure is there as functional structure lead to bifurcation of all activities on the basis of
function. It has been also summarised that both internal and external factors lead significant
impact on organisation that could be evaluated through making use of SWOT and PESTEL
analysis. Further, it could be evaluated that positive and negative impact are lead by
7

Globalisation on an organisation that consist of cost efficiency and larger target market along
with high level of competition.
REFERENCES
Books and journal
Herold, D. M. and Lee, K. H., 2019. The influence of internal and external pressures on carbon
management practices and disclosure strategies. Australasian journal of environmental
management. 26(1). pp.63-81.
Hu, J. and Haddud, A., 2020. Exploring the Impact of Globalization and Technology on Supply
Chain Management: A Case of International E-Commerce Business. In Supply Chain and
Logistics Management: Concepts, Methodologies, Tools, and Applications (pp. 1353-
1376). IGI Global.
Ibrahim, E.B. and Harrison, T., 2019. The impact of internal, external, and competitor factors on
marketing strategy performance. Journal of Strategic Marketing, pp.1-20.
Liu, Z. and Jayaraman, V., 2019. Exploring the effect of internal and external integration on the
performance of professional service outsourcing. Journal of Global Operations and
Strategic Sourcing.
Moak, K., 2017. Developed nations and the economic impact of globalization. Springer.
Orekhovskaya, N.A. and et. al., 2018. Globalization and youth: philosophical analysis of
challenges and ways to overcome them. XLinguae. 11(2). pp.256-264.
Tu, C., Suweis, S. and D’Odorico, P., 2019. Impact of globalization on the resilience and
sustainability of natural resources. Nature Sustainability. 2(4). pp.283-289.
Turner, J. R. and Lecoeuvre, L., 2017. Marketing by, for and of the project: project marketing by
three types of organizations. International Journal of Managing Projects in Business.
Zafar, M. W., Saud, S. and Hou, F., 2019. The impact of globalization and financial development
on environmental quality: evidence from selected countries in the Organization for
Economic Co-operation and Development (OECD). Environmental Science and
Pollution Research. 26(13). pp.13246-13262.
Zaidi, S.A.H. and et. al., 2019. The impact of globalization, natural resources abundance, and
human capital on financial development: Evidence from thirty-one OECD countries.
Resources Policy, 64, p.101476.
Online:
Size of the Organization and Information Requirements. 2020. [Online] Available Through:<
https://www.zeepedia.com/read.php?
size_of_the_organization_and_information_requirements_information_systems&b=14&c
=3 >.
Richard Jobling. 2020. What is an SME?. [Online] Available Through:<
https://www.thecompanywarehouse.co.uk/blog/what-is-an-sme >.
Fraser Sherman. 2019. What Is the Relationship Between Organizational Functions &
Organizational Structure?. [Online] Available Through:<
https://smallbusiness.chron.com/relationship-between-organizational-functions-
organizational-structure-18571.html >.
8

What Are Internal & External Environmental Factors That Affect Business. 2020. [Online]
Available Through:< https://www.mageplaza.com/blog/what-are-internal-external-
environmental-factors-that-affect-business.html>.
Hatim Abukhames. 2015. Internal Factors that May Affect the Business Organization. [Online]
Available Through:< https://www.linkedin.com/pulse/internal-factors-may-affect-
business-organization-hatim-abukhames>.
How Does Globalisation Influence Organisational Decision Making and Strategy?. 2019.
[Online] Available Through:< https://www.iqualifyuk.com/library/business-management-
section/how-does-globalisation-influence-organisational-decision-making-and-strategy/
>.
TESCO SWOT Analysis 2019 | SWOT analysis of TESCO. 2019. [Online] Available Through:<
https://bstrategyhub.com/tesco-swot-analysis-2019swot-analysis-of-tesco/>.
Tesco. 2020. [Online] Available Through:< https://www.tescoplc.com/about/ >.
Tesco Plc. 2020. [Online] Available Through:< https://www.tescoplc.com/ >.
9