Globalization and Thompson Aero Seating

This assignment examines the effects of globalization on Thompson Aero Seating, an aircraft seating company. It analyzes how globalization presents opportunities for the company to expand its business globally and explores various strategies for entering new markets. The report also delves into crucial factors influencing globalisation, such as cultural, political, environmental, and economic aspects, emphasizing the importance of considering these elements for successful international operations.

Drivers and challenges for
globalisation

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1: Analyse the key factors which drive globalisation................................................................1
P1 Key factors which drive globalisation in context to Thompson Aero seating..................1
LO2: Determine the strategic complexities associated with operating in a global environment.....2
P2 Complexities of strategic challenges faced by Thompson Aero seating...........................2
LO3: Evaluate how operating in a global market influences an organisation’s structure, culture
and functions....................................................................................................................................3
P3 Impact of globalisation on leadership, structure, culture and functions within Thompson
Aero seating............................................................................................................................3
P4 Influences of ethical and sustainable globalisation on organisational functions..............4
P5 Various ways in which decision making can work effectively.........................................5
P6 Various routes to globalisation Thompson Aero Seating may adopt, including key barriers.
................................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Globalisation can be segmented into four major elements: rapid discontinuous change,
growing worldwide interconnections, increased number and diversity of participants as well as
increasing complexity. This report is in context to the impact of globalisation and its elements on
the performance of a UK based manufacturing company Thompson Aero Seating. The report
will analyse the major factors which drive globalisation and the strategic complexities related to
business operations in a global environment. Furthermore, this report will identify the impact of
global market on the culture, structure and functions of Thompson Aero Seating. The impact of
globalisation on organisational decision making will be also determined in the following report.
LO 1: Analyse the key factors which drive globalisation
P1 Key factors which drive globalisation in context to Thompson Aero seating.
Globalisation is the procedure of integration and interaction among people, organisations
and government all around the world. It has enhanced because of development in transportation
and communication technology. There are generally four major areas of drivers for globalisation
which are cost, government, market and competition. These external drivers influence the
conditions for the potential of globalisation with regards to Thompson Aero seating which are
not in their control. The drivers of globalisation are described as below -
 Market – These drivers consist of various areas such as transferable marketing, customer
needs or demands etc. The manufacturing organisation such as Thompson gets highly
influenced by globalisation which refers to entering into new market. The organisation
needs to make sure that they fulfil customers’ needs or demand within the new or global
market by offering existing products or manufacturing new ones. Therefore, Thompson
Aero needs to make changes in their business operations for producing goods to fulfil
new demands in a global market (Beck, 2018).
 Government – The Government is another driver for globalisation, Thompson Aero needs
to follow various policies and laws imposed by the government of UK while entering into
new markets such as Africa, China; the organisation needs to adopt or follow new
policies with respect to the market they are entering into. Every market or country has its
own trading policies, taxation policies etc. which greatly influence the business
operations of Thompson Aero seating in global market.
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 Cost – Companies such as Thompson Aero seating can achieve new economies of scale
by selling their products at higher prices in new markets. The company can also gain the
benefit of low cost of production through import and outsourcing. Cost is a major
element for every organisation or business, cost of production and economic conditions
of a marketplace greatly affect the business strategies and functions.
 Competition – New markets also bring new competitors for an organisation. A company
entering into a global market is highly exposed to competitive market. There are many
organisation operating in a similar industry and adopting globalisation to expand or grow
their business and cover a large market segment that develop a highly competitive market
for Thompson Aero seating. In order to control and sustain in the competitive market, it
changes its business functions and strategies accordingly.
Environmental factors
There are various environmental factors which has a great impact on the globalisation
and these factors can be determined by applying PESTLE analysis
 Political – Each and every country has its own political policies and conditions, an
organisation such as Thompson Aero seating needs to consider political situation of a
country before expanding their business.
 Economical factors – The economic conditions such as recession, high per capita income,
individual, GDP also affect an organisation while performing various functions.
 Social factors – Another major factor is social elements such as culture, language, beliefs
and perception of the people highly effect an organisation in globalisation.
 Technological factors – The technological factors such as use of smartphone application,
internet etc are also influencing a company while entering into global market.
 Legal – The legal factors include employment laws, labour laws, business laws and so on.
 Environmental factors – The environmental factors are also needs to be considered while
entering into a new market. The climate conditions, pollution, environmental policies etc.
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LO2: Determine the strategic complexities associated with operating in a
global environment.
P2 Complexities of strategic challenges faced by Thompson Aero seating
Thompson Aero seating is a UK based manufacturing company producing products for
Aero industry. Entering into global market successfully is a current organisational goal for the
company, their main goal is to enhance their market share into new countries such as Asia,
Africa and North America. Besides this, association needs to centre on growing such a focused
technique which can recognise it from rivals in global market. For instance, McDonald’s is the
best and appropriate case that works its business at worldwide level. This association is having
various markets in-spite of the fact that it needs to bargain in different nations (Laudon and et.al.,
2016). McDonald’s is a effective brand and having a solid brand picture at worldwide level. It
has considered all natural and key parts of business while working in various nations. Referred to
wander has franchisees on the planet that serve nourishment items to a huge number of
individuals consistently. It has powerful administration and worldwide development procedures
to enter in new markets and pick up an offer of remote fast food showcase. McDonald's has
worked in a testing complex condition at worldwide level which included extraordinary rivalry
from a few extensive worldwide nourishment holding firm. It is found out that organisation has
retailing tasks in numerous nations and serve the necessities of a huge number of customers. As
the CEO, I observed that Thompson Aero seating also faced many challenges while operating its
functions globally, these challenges can be described as follows -
 Strategic stretch and confidence – Thompson Aero seating finds it difficult to be flexible
and adaptable locally as they enter or enhance their business in the global market. The
global market includes various factors such as intense competition, availability of
resources and labour. These factors influence the organisation modify their business
strategies for achievement of organisation’s goals and objectives. It makes difficult for
the companies to cope with local and international demands or needs of the customers
and this creates complexity in their strategic management or planning.
 People as an asset and a challenge – Another most influencing challenge as faced by the
organisation is developing a skilled and effective workforce. Global market affects the
working or functioning of Thompson Aero Seating such as to produce high productivity.
These changes can be managed only if the company has a strong and effective team of
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employees. Organisation needed highly skilled and talented employees to increase the
effectiveness and efficiency of the overall business or company.
 Scale and scope benefits, complexity costs – In order to enhance the scope of the
business, Thompson Aero Seating focuses on expanding its organisation in different
countries globally. This highly influence cost of business operations and creates
complexity for the company (Amador and Cabral, 2016).
 Loss of familiarity and risk diversification – Thompson Aero Seating is enhancing its
productivity and profitability by growing in the global market. But this also brings many
issues for the company, there are many risks in a global business environment which can
influence the functioning of each and every organisation. New areas of the market are not
familiar to the organisation which develops a lot of risks for a business to carry out its
functions.
LO3: Evaluate how operating in a global market influences an organisation’s
structure, culture and functions.
P3 Impact of globalisation on leadership, structure, culture and functions within Thompson Aero
seating
Various impact of globalisation on Thompson Aero seating
Globalisation has affected leadership and management style various ways through
competition, customer and markets, increased opportunities and international employee transfer.
Globalisation greatly influence business such as Thompson Aero seating in different ways, it
makes a business complex, difficult but at the same time profitable.
 Leadership - The impact of globalisation on leadership can be determined by a fact that
a good leader in a country may not be that good in some other country. Leadership styles
needs to be adopted according to the place, situation or conditions, global market needs a
highly flexible and effective leadership in order to carry out the functions of organisation
smoothly in various types of markets or countries. This influence managers to change
their management techniques or methods with respect to the new market conditions or
situations (Najam and et.al., 2016)Organisational structure - Globalisation also affects
organisational structure for example in order to meet the demand of a market of place
organisation needs to enhance its structure to increase productivity as well as when it
need to cut down its operational cost the organisation can decrease the organisational
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structure or size. Organisational culture is another main element of a business or
company, culture in an organisation highly affects or influence its performance. The
employee relation needs to be strong and effective in order to get the best outcome or
improving organisational performance
 Culture - Globalisation affects culture as each and every country or its people have
different culture therefore, it is an important concern for Thompson Aero Seating for
understanding culture differences and developing effective understanding regarding
cultural beliefs or values of a new market it needs to expand its business into. Functions
of an organisation also get affected by Globalisation, according to the new market or area
the demands of customers also changes. Every country and its people have their own
needs or demands which need to be fulfilled by the organisations in order to ensure its
profitability. Hence, Thompson Aero Seating analyse the demand of airline industry
within different market or countries for developing most suitable strategies to perform
effective functions and meet the demand of new markets in globalisation
Positive impact of globalisation
Globalisation can have both positive and negative impact on an organisation such as
Thompson Aero seating
1. Growth of world economy – One of the major benefit of globalisation is growth and
development of the global economy. More and more companies if trade globally it will
increase the income of the business as well as each country in the world. Therefore, it
will result in the development of overall economy.
2. Increase in wealth – The businesses can increase their sales and profit by trading in
different countries or global markets.
Negative impact of globalisation
1. Exploitation of resources – The organisation practices are increasing day by day in the
global market. The environment has limited resources which can get exploited due to
increased business functions or operation.
2. Unfair trade – Globalisation can also lead to unfair trade such as it is difficult to monitor
international businesses, and cross country activities can be utilised for illegal practices
which can be a threat.
Corporate strategy which can be adopted
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Thompson Aero seating can effectively adopt growth strategy for entering into a global
market, there are two types of growth strategies vertical and horizontal growth strategies. The
vertical strategy refers to seeking growth by taking over different elements of the operations or
functions path. On the other hand horizontal strategy refer to a business or organisation
extending its reach of existing goods or services to new global markets or areas.
P4 Influences of ethical and sustainable globalisation on organisational functions
There are various functions performed within an organisation or company such as
Thompson Aero seating which gets affected by globalisation, the ethical influences and functions
of Thompson Aero seating in international or global market can be described as below -
 Human resource management – Globalisation brings complex issues or challenges for
human resource management of the company internationally. Cultural differences in
different countries influence the commitment between employees and employers. An
important challenge for management within Thompson Aero Seating is to maintain
effectiveness in promotion, hiring and compensation. A complicated issue of child labour
has also been emerged along with other challenges such as fraud, discrimination,
harassment etc (Friel and et.al., 2015).
 Financial management - The essential objective of administration is riches boost for the
investors. There is minimal direct help that moral conduct prompts investor's riches
expansion. Backhanded investigations have likewise not found any considerable
connection between corporate money related execution and social duty. Be that as it may,
for long haul maintainability, associations ought to participate in moral practices.
Reasonableness in exchanging works on, exchanging conditions, money related
contracting, deals rehearses, consultancy administrations, assess instalments, inside
review and outside review are the zones in which moral money related practices should
be taken after. Other imperative territories are inventive bookkeeping, income
administration, misdirecting money related investigation, insider exchanging, securities
extortion, pail shops, forex tricks and so forth. (Ofori and Garcia, 2016).
 Marketing – The needs and wants of various teams vary within the international
marketing functions of Thompson Aero Seating which leads to ethical conflicts among
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employees. Most ethical issues and challenges are related to marketing policies, pricing
approaches, communications and activities related to distribution. The specific ethical
issues are – prudence of targeting vulnerable sections for utilisation of dangerous or
redundant services or products, fair pay and treatment to employees, service or products
transparency, appropriate labelling of product etc.
 Production – Production area of organisational ethics deals with the responsibilities or
duties of a business such as Thompson Aero Seating to make sure that the production
process and product do not cause harm to the environment or living creature. Addictive,
defective and dangerous services or products are not ethical practices in the
manufacturing function of an organisation. The organisation should also focus
maintaining a harmonious relationship with the environment (Cornelissen and et.al.,
2016).
P5 Various ways in which decision making can work effectively
There are various factors that influence decision making within Thompson Aero Seating
in the global market. The various studies on businesses have concluded that there are many
factors that influence decision making process in an organisation which is operating its functions
in global market. However, the global market is completely different from a local market for
each and every organisation. The decision making process is very essential for every business or
organisation as it's a major process which decides various strategies of an organisation with
respect to its functions or operations. Hence, the decision making process in every organisation
operating globally is influenced by various factors which are described as follows -
 Government policies – The organisation operating in a global market or different
countries needs to work or perform their functions according to the trading policies
imposed by government of a particular country or area. Policies which are imposed on
trading of goods and services needs to be followed or considered by organisation, every
country has its own taxation and trading policies which influence the functions as well as
decision making process of businesses. The decision making process includes analysis of
various trading laws and policies before strategic implementation in order to obtain the
best outcomes from the decisions.
 Culture – Another way in which decision making is influenced is through diversified or
different culture, values and beliefs in various countries or areas. Decision regarding
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advertisement, product designs etc. needs to be made with respect to the cultural values
of a particular country in order to attract new customers (Gancarczyk and et.al., 2015).
 Demand or need of customers – Every country or market has its own demand, which
directly refers to the needs of people in that particular market or area globally. Thompson
Aero seating's decision making is highly influenced by need or demand in the global
market and every strategy or decision is made according to the same.
P6 Various routes to globalisation Thompson Aero Seating may adopt, including key barriers.
Thompson Aero Seating can adopt the following ways in order to enter into global
market -
 Licensing- Licensing is a sort of consent or offer of exchange the rights to the utilisation
of item and administration to another organisation. It is an official consent or allow doing
orutilize something. A permit might be allowed by a gathering to another gathering as a
component of an understanding between those gatherings.
 Franchising - Franchising is an act of rights to utilise an organisation's plan of action and
brand for a recommended time-frame. It is the best market passage methodology and
process for quick market development yet it is picking up footing particle different parts
of the world. It is a type of diversification and it functions admirably for firm that have a
repeatable plan of action. In this system, franchiser is a provider who permits an
administrator or franchisee to utilise the provider’s trademark and appropriates the
provider's great.
 Direct exporting - Direct exporting is offering specifically into the market. While any
business endeavour specifically sends out its item and administrations, then it is known as
the immediate trading. While any organisation manages coordinate sending out, at that
point, they have built up a business program swing to operators and wholesaler to speak
to them advance in that market. This is another best system for business to enter and
development under which firm does not require joining with another organisation. In this
methodology, it is essential for organisation that choice of operator and merchant ought
to be proper. (The impact of economic, political and social globalization on overweight
and obesity in the 56 low and middle income countries, 2015).
 Collaboration- It is another imperative market section technique for Sainsbury through
which it can without much of a stretch, enter and grow its business in the Indian market.
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This is a specific type of organisation that includes the production of a third
autonomously oversaw organisation. Under this system, two partnership consent to
cooperate in a particular market, either geographic or item and make a third organisation
to attempt this. In simple words word any type of affiliation which suggests coordinated
efforts for in excess of a short lived period is known as joint venture.
Various barriers in globalisation can be identified by PESTLE analysis which is described
as follows-
 Political factors - These are the components which make positive and negative effect on
the working of Thompson Aero Seating. For instance, there will be different areas where
the organisation will work. This can be the negative effect which will looked by the
referred to association (Von and et.al., 2014).
 Economic factors - Economic states of every nation are not the same as each other. Here
and there they develop and now and again they fall. Developing of economy will make
positive outcomes while ruin of the economy will bring negative effect for Thompson
Aero Seating.
 Social factors -These are the variables which are affected by the adjustments in tastes and
inclinations of the clients. At the point when the inclinations are in support, then it will
make the positive effect. Be that as it may, on the off chance that they are not then
referred to association should confront numerous negative effects and its outcomes.
 Technological factors - There are numerous advances which come in the market. Those
can make numerous positive effects on the business. Better innovation will build the
profitability (Rozenberg and et.al., 2014).
 Legal factors - There are numerous laws and enactments which are incorporated into the
legitimate factor. These power the organisation to take after a few rules in their exercises
and activities. This will have negative effect in light of the fact that Thompson Aero
Seating should work as per these laws and enactments.
 Environmental factors - Working of the referred to association towards improving world
a place and utilize those advancements which are condition benevolent. Making sheltered
and solid condition.
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CONCLUSION
The report concluded that globalisation is an effective and essential concept for
Thompson Aero Seating to grow and expand its business all over the world. In addition, the
organisation can use various ways for entering into global market which are determined in the
report. It also determined various factors which affect globalisation; Thompson Aero Seating
needs to analyse the cultural, political, environmental and economic factors before entering into
new markets. Overall, it is very essential to consider all the elements as discussed for
achievement of success and goals while operating into global market.
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REFERENCES
Books and Journals:
Amador, J. and Cabral, S., 2016. Global value chains: A survey of drivers and
measures. Journal of Economic Surveys, 30(2), pp.278-301.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
India.
Beck, U., 2018. What is globalization?. John Wiley & Sons.
Rozenberg, J., Guivarch, C., Lempert, R. and Hallegatte, S., 2014. Building SSPs for climate
policy analysis: a scenario elicitation methodology to map the space of possible future
challenges to mitigation and adaptation.Climatic change, 122(3), pp.509-522.
Gancarczyk, M., 2015. Enterprise-and industry-level drivers of cluster evolution and their
outcomes for clusters from developed and less-developed countries. European Planning
Studies, 23(10), pp.1932-1952.
Cornelissen, S., Cheru, F. and Shaw, T. eds., 2016. Africa and international relations in the 21st
century. Springer.
Von Bergner, N.M. and Lohmann, M., 2014. Future challenges for global tourism: A Delphi
survey. Journal of Travel Research, 53(4), pp.420-432.
Najam, A., Runnalls, D. and Halle, M., 2016. Environment and Globalization: Five Propositions
(2010). The Globalization and Environment Reader, p.94.
Friel, S., Hattersley, L. and Townsend, R., 2015. Trade policy and public health. Annual review
of public health, 36.
Ofori-Asenso, R. and Garcia, D., 2016. Cardiovascular diseases in Ghana within the context of
globalization.Cardiovascular diagnosis and therapy, 6(1), p.67.
Online:
[The impact of economic, political and social globalization on overweight and obesity in the 56
low and middle income countries, 2015].Available through:
<https://www.sciencedirect.com/science/article/pii/S0277953615001744>
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