Strategic Direction and Impact

This report examines the strategic direction and impact of globalization on CAMECO, a chemical company operating in South Africa and expanding internationally. It analyzes key factors driving globalization, strategic complexities faced by CAMECO, and the influence of globalization on organizational structure, culture, and functions. The report also explores ethical and sustainable globalization practices, decision-making in global contexts, and various routes to internationalization along with their barriers. Desklib provides past papers and solved assignments for students.

Strategic Direction and
Impact

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Key factors that are responsible for driving globalisation....................................................1
TASK 2............................................................................................................................................2
P2. Various strategic complexities that are faced by business concerns while globalising their
business functions.......................................................................................................................2
P3. How operating in global market influences organisation's structure, culture and functions.
.....................................................................................................................................................3
TASK 3............................................................................................................................................6
P4. Influences of ethical and sustainable globalisation or various organisational functions......6
TASK 4............................................................................................................................................8
P5. Different ways in which decision making can apply in global contexts...............................8
P6. Various routes to internationalisation along with their barriers as well...............................9
REFERENCES..............................................................................................................................13

INTRODUCTION
Globalisation is a quite important subject in present day scenario that focusses on
improved efficiency and effectiveness in overall working of business concerns. This further lays
a quite significant impact on functioning of business ventures. Strategic direction in this aspect
is a quite important or driving force in a business. It further proves quite useful for developing or
establishing a structure that combines various responsibilities. Also a fair and clear vision helps
employees in assessing purpose or objective of a company. This report has been framed on
CAMECO which operates as a chemical company with its area of operations in South Africa.
The company has currently expanded in various countries such as Mozambique, Canada, Gabon
and Australia as well. This report further comprises of various factors such as key factors that
initiate global trade along with complexities regarding strategic challenges. Also this report
comprises of influences that globalisation causes in respect of organisational functions.
TASK 1
P1. Key factors that are responsible for driving globalisation.
Globalisation is an essential process that focusses on expansion and growth of business
concerns at an international level. It is basically responsible for enhancement in growth and well
as productivity of a business concern. It is driven by a number of forces and tools such as new
development and gradual changes in relation to economy of the world. Globalisation gets
impacted or affected by a number of driving forces such as cost, market, environment,
technological advancements, reducing trade barriers etc.
Various key forces that drive globalisation are mentioned as under:
Technological advancements: Technological advancement is an essential factor that
drives globalisation. Technology is said to be improving and developing since a quite long time
along with developing various communication platforms. Also it helps in exchange of goods and
services at a quite faster pace. By bringing about technological advancements, exchanging ideas
different geographical locations today are no more a barrier. In context of CAMECO, it has been
observed that managers will need to adopt technologically advanced tools and techniques for
ensuring effectiveness.
Reduction of cross trade barriers: It is a quite important force that is responsible for
driving globalised business practices. In earlier times every country used to restrict free trade and
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movement of goods and services from one nation to another. But with globalisation comes into
existence, it has been observed that businesses are able to freely trade in different nations by
adopting ethical business practices. This has further connected different parts of the world with
each other in a quite close knit manner. In relation to CAMECO, it has been examined that by
adopting free trade among countries productivity and profitability of the company will improve
by great extents. Also it will help in developing a sound image of the company in competitive
market.
High competition: Competition is an important factor which is responsible for bringing
about globalisation in a positive and effective manner. It is a process which says that
organisations drive each other to be successful in comparison to other. It happens to be a major
driving factor which promotes or motivates business concerns to be successful and enter global
markets. Hence in the present context it has been observed that competition is a quite essential
element that is responsible for CAMECO globalising its business functionality and operations.
This provides a quite developed market to companies at global level where they can sell their
prices at a quite high price.
Cost: This is considered as drivers relate to costing that are needed for expanding
enterprises at global marketplace effectually. Therefore, to expand the operation of firm as well
as activities at international level organisation needs more capital. Due to this they has to recruit
individuals as per the requirements, perform analysis to get knowledge about firm's culture and
so on. In context of CAMECO, it needs more funds for analysing market are in appropriate
ways. Through which it can able to understand the respective company products requirement and
demand.
Market: Market needs and demands vary nation to nation that influence firm's operations
and functions. So, this is essential for them to do market evaluation as well as formulate goods or
services consequently for attracting more consumers. In respect of CAMECO, they perform
market examination for identifying consumers requirements regarding chemical and energy
products. Through knowing it management of the respective firm can able to make products or
services effectually. But this is very hard for firm to perform market analysis regularly as
consumers needs and demands are changing as per the requirements.
Environment: This is considered as the dynamic drivers in which changes take place
rarely. Respective company have faced the problems with the changes into environment as they
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are operating their business into modifying surroundings and market. This is crucial to examine
the surroundings as well as consequently make decisions. Commerce as well as trade take place
into environment as product consumption enhances which effects ecological cycle that drives to
place stress on environment.
Importance Digital Technology effects upon Globalisation
Digital technology is considered as the utilisation of resources for effectual findings,
forming, examining, communicating as well as delivering into digital respect. This involves
usages of programming tools, applications of software and web tools. Digital; technology have
effected globalisation due to enhancement as well as growth. It compel business in order to
become globalised by aids of enhancing market size and economies scale. This minimises cost of
transportation, communication in all over country as well as provides international raw material
and inputs sources. There is patent technology that motivates globalisation to their own patent as
well as efforts another international market place without rivals. The emergence of digital
technology drives towards enhancement of international villages as well as minimises time and
place barriers in order to deal with firm.
TASK 2
P2. Various strategic complexities that are faced by business concerns while globalising their
business functions.
A strategic barrier refers to obstacles or challenges faced by business concerns that create
a problem or complexity for a business whenever they wish to enter some given market. These
barriers of entry include a number of factors such as technological challenges, start up or
expansion prices, licensing or copyright requirements, monetary funds requirements etc. Other
than this, companies that are entering foreign markets face a number of problems or issues due to
the nature of business environment as well as culture that companies follow while they operate .
An example in this context can be seen as marketing services or processes in certain companies
might be quite expensive or costly which utilises their entire fund amount. Also in certain cases
banking or funding system of different countries is unavailable or absent which hampers its
overall growth and productivity.
In context of CAMECO, various strategic complexities faced by them have been
mentioned as under:
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Monopoly situation:It is a quite complex situation that occurs at almost some point of
time. It happens to be a quite serious barrier in relation to globalisation. Monopoly exists in a
market only when a specific company is the only provider of a good or service in competitive
market. Monopolies can either be owned by government or created whenever a company
considers takeover practice. It is a process which blocks the entry of competing or rival firms
by considering patents or copyright laws and legislation. On important example in this context
has been seen as a provision of internet services in North America. In this case people have only
two choices or options i.e. either through their cellular companies or cable providers. This further
restricts the entry of other new or rival firms.
Legal protection: Lack of legal protection also happens to be a major barrier whenever a
company wishes to globalise their overall business operations. It relation to this factor it has
been observed that if any business concern cannot protect or safeguard its own business along
with effective trade mechanisms, then it will be quite difficult for companies to sustain in current
market. In many cases it has also been observed that that legal actions in some countries cannot
be practised as the law and courts do not favour foreign exporter so whenever a commercial
issues arises it will be very difficult for companies to sustain.
Corrupt business practices: Corruption and bribery is a quite substantial topic today that
is present in almost every business concern. This helps in quick and speedy conduction of
business operations. Corrupt business practices are mainly used by businesses whenever they
wish to convince government officials so as to adopt measures that are in their personal benefits.
In context of CAMECO, it has been observed that managers are strictly trained and guided foe
adopting ethical business practices and not using any unethical or illegal means. This is quite
complex yet provides a stable brand image to the company.
PEST ANALYSIS:
PEST analysis of CAMECO are as follows: Political factors: it refers as the government intervenes into economy which involves
foreign trade policy, political stability, environmental laws and many more. It is the
factors have huge effects respective firm as they are operating enterprises into metals as
well as minerals within several countries. For expanding market at international level,
this is essential to know about such industry. In case company can easily find out the risk,
corruption level etc. then they can sustain other wise can disappear from there.
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 Economic factors: This is considered as the ways of operating business into competitive
economy. It involves exchange rates, interest rate etc. These kinds of factors have direct
and long term effects upon firm as well as their performance. For expanding market at
international level through respective firm, strategic challenges may be faced in respect
of financial market, quality and many more. Few aspects required to be undertaken
before entering within marketplace like exchange rates, infrastructure and others.
 Social factors: This is considered as the social cultural aspects that includes individuals
beliefs, attitudes etc. Moreover, it involves career behaviours, development of population
and many others. CAMECO have to examine market for understanding the consumers
tastes, preferences and so on as well as generates consequently before enterprises
expansion into international marketplace.
 Technology factors: This pertains innovation into technology that impact business
operations and market. This involves innovation level, automation, technology
modification and so on. CAMECO require to utilise technology for producing products
at international level. For adopting technology, firm have to examine its competitors,
process utilised through them as well as products offerings.
Recommendation for overcoming challenges
 They have to know about the significance of belief, culture and so on of international. For
operating business into world wide respect, company required to understand customers
demands, tastes and so on as well as produce consequently for survival as well as growth.
 Another recommendation is that, respective firm have to facilitates opportunities of the
job to whole experiences, skilled staff so that they can not move from developed to
developing nation. It leads to enhance enterprises as well as economic growth of country.
P3. How operating in global market influences organisation's structure, culture and functions.
Organisational governance is a systematic system in which an organisation develops and
implement various decisions and ethical policies. Good governance can help any organisation to
achieve their successful business objectives.
Structure: Structure is an integration of frameworks in which an organisation develops
and arrange different types of lines of authorities and allocation of rights and duties. Tommy
Hilfiger follow matrix structure in their workplace in which there is horizontal flow of
information. With the help of this structure company effectively utilize their resources and foster
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their decision-making process (Alqahtani and Saba, 2013). Organizational structure is mainly
affected by globalization when an organization is launching their new business in a new market
or selling their products and services in international market. In this situation, it is essential for
members to expand their areas of knowledge and hire diverse employees who are able to deal
with various clients of national and international level.
Culture: Organisational culture is mainly a sum total of values, assumptions and beliefs.
Effective organisational culture is a formative framework which directs members to move in
right way and perceive correct thinking. Tommy Hilfiger focused on various tangible and
intangible goals and objectives and follows soft culture in their workplace. Organization culture
is affected by globalization when fresh staff are hired with different culture. This culture helps in
managing firms in managing diversity at workplace which is beneficial for managing influence
of globalization. The company focused on managing shared perspective and work ethics which
supports business in managing challenges which arise due to globalization. The cultural values of
firm are focused on promoting equality and diversity among employees which helps in aligning
business activities in one common direction.
Leadership: In Tommy Hilfiger, leaders make use of participative type of leadership
style. This helps them in gaining support and assistance from employees. Also, as this is a style
which makes use of encouragement as a tool to invite views and opinions from employees. This
helps the company in developing solutions to issues in enterprise as well as developing a sense of
loyalty in them to retain them for a long time.
Functions: Main function of Tommy Hilfiger is to create a product that is classic and
committed and take supplies from cotton fields to straight manufacturing units. One of the most
important function of company is to connect with buyers in positive and inclusive which helps
the firm in managing challenges which arise due to increasing globalization.(Our 3 Principles,
2018)
Governance: Corporate governance of firm is focused on policies and practices of
corporate social responsibility which helps the business sin managing socially responsible
practices which reduces the risk and uncertainty due to globalisation.. Governance is mainly
concerned with overall supervision and direction of an organisation. An effective governance can
take an organisation to get long term success (Black and Gregersen, 2013). In Tommy Hilfiger
their board of directors are mainly responsible for governance they make formative decisions and
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policies which ensure responsiveness and accuracy towards their customers, regulators and
stakeholders.
Application of McKinsey’s 7S Model on organization structure in Tommy Hilfiger
McKinsey’s 7S model helps business organizations to evaluate their internal strategy,
structure, values and styles. It incorporates hard and soft elements. Its benefits company to
improve their performance and examine future changes within structure of company. Tommy
Hilfiger implement this model to determine effectiveness of their strategies and improve their
performance. Mention below there are elements of model described in brief:
Hard elements: Hard elements includes organisation strategy, charts and reporting
statements. These elements are easy to defines and management can directly influence them. In
relation with Tommy Hilfiger there are hard elements that are firmly described below:
Strategy (Governance): Tommy Hilfiger managers have adopted various types of strategies in
order to develop their business operation and expand them globally to gain more competitive
advantages.
Structure: Tommy Hilfiger, implemented an organizational structure in which there are different
types of particular departments and divisions such as networking, accounts etc.
Systems: It includes day to day activities in which staff members are engage to get work done.
Tommy Hilfiger, adopted a working pattern in which specific required task in done on
priority base.
Soft elements (Culture): Soft elements are bit difficult to describe and are more
influenced by culture. It mainly includes shared values, style and styles. In relation with Tommy
Hilfiger, mentioned below there are some soft elements:
Shared values (Culture): In this, various policies and regulations are described which directly
affects employees and management behavior (Ferraro and Briody, 2013). In Tommy
Hilfiger ethical shared values are operated which aims as welfare of society and does not
harm in any manner.
Skills: Tommy Hilfiger, human resource department recruit effectively efficient and skilled staff
who have abilities do operate functions in required way within organization. Moreover,
company mainly recruit those candidates who are potentially enthusiastic and understand
company vision in order to work in formative direction.
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Style: Tommy Hilfiger follows Democratic form of leadership in which every employee in their
company are being equally treated. Leaders in company delegate roles and responsibilities to
their subordinates in order to achieve long term sustainability.
Staff: Tommy Hilfiger approximately recruits 20,200 people around the globe and perform their
business operations in many countries.
TASK 3
P4. Influences of ethical and sustainable globalisation or various organisational functions.
Ethical and sustainable globalisation
The word ethics is derived from Greek word “Ethos” which means character which is
used for describing ideas and beliefs that characterizes about a nation or community. It is based
on study which deals about what is morally right or wrong, bad or good behaviour. Ethics is
branch of knowledge that is applied to every business to solve ethicsl problems. This concept has
a significant role in competitive business environment. Involvement of ethics as part of strategy
formulation helps companies to gain competitive advantage, reputation and image in global
business world.
Globalisation is a systematic process of integration between two or more countries,
people, and government for international trade and investment. It process of developing,
diversifying and expanding business throughout world and maximising returns. This concept
helps in decreasing poverty, unemployment, economic growth and wide variety of products are
available in market at international level. Sustainable globalisation is a concept which represents
transformation of doing business at international level. Companies should fulfil all necessary
requirements in ethical way so that it helps in long term and stable position in international
market. Sustainable globalization is principle oriented which operates on basic values of service
and collaboration. It focuses on precious use of natural resources, respect, support which helps in
building social, human and financial capital at domestic and global level. Various organisational
functions which are influenced by sustainable and ethical globalisation are:-
Human resource- Human resource is very valuable asset for every organisation. This
organizational function deals with issues related to human resource of company such as
recruitment, training, selection,and performance management etc. This function deals with
development of employees and staff which helps in profit maximisation and accomplishment of
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organisations objectives. Human resources should comply with legislations applicable to country
in which company is based. In context of CAMECO it has been observed that managers have
started adopting ethical practices. Also, employees today are given the individual rights which
ensures effectiveness of human resource while globalising their business operations.
Finance- Lifeblood of every organisation is finance and part of management. Finance
department should maintain records of all expenses and revenues carried out by organisation.
This data will help in formulation of financial statements to comply with legal formalities and
tax purposes. The information collected is used in project management which helps senior
managers in formulation of strategies and plans. Finance department of company is also
responsible for administration of salaries and expenditure. With respect to, CAMECO it has been
observed that finance managers should collect or pool funds in ethical manner. Also, employees
are given salary on time which help in raising their standard of living and increase in work
commitment. So, that it helps in ethical and sustainable globalisation.
Marketing- This functions helps company in identifying customers needs and desires to
be produced by differentiating from similar products after proper market Research. Marketing
department should do proper market research to identify customer needs and develop strategies
to satisfy customer needs. In global economy, marketing is promotion and selling of products
and services in integrated manner. After globalisation there is cut throat competition related to
product, service, cost, quality, quantity, responses and production by companies. If company
produces its products at less cost with best quality this helps in increasing market share. In
context of CAMECO, it has been observed that marketing managers are adopting ethical
marketing strategies to satisfy customers. Advertisements of company should not include sexual
content as it is unethical way for marketing of products. Also, their should be no manipulation of
prices in market. Company should produce those products in market which have a sustainable
and long term impact in minds of competitors and consumers.
TASK 4
P5. Different ways in which decision making can apply in global contexts.
Decision making refers to a quite cognitive process which helps in selecting a specific or
effective course of action from the various available alternatives. Every process of decision
making focusses on providing a stable and final solution which may or may not provide a quick
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action. It is a quite lengthy and time consuming process that focusses on gathering important data
and information. Choices in this process can be made as per reasoned process or intuitive
processes as well. In addition, with this they also introduce the new technologies and techniques
in their business structure for creating better modification. Along with this management of
Tommy Hilfiger also focuses important things like interest of stakeholders, participation of
whole employees and performance of system while making decisions of international level. They
also motivate and encourage their employees so they can work in a proper manner and can
achieve the goals and organisation of organisation. All of these processes are done by taking
proper decisions in order to achieve sustainability at marketplace.
In Tommy Hilfiger, there are four ways in which leaders make and enforce decision
making in a global context. Such ways are described below: -
Command: It is a way where leaders within Tommy Hilfiger make and implement
decisions without much consultation with their teams. This is an optimal way wherein leaders
communicate the decision to workforce and work upon aligning their behaviour as per the
decision. Aligning employee’s activities is best way of making decision with regard to global
concerns within firm as it reduces the risk of uncertainty.
Collaborative: This is a way of decision-making where leaders in Tommy Hilfiger
gather their teams and take their views and opinions. The final decision is still taken by leader
but importance is given to feedback obtained from staff. In this, decision will be effectively
taken by management by seeking alternatives from all staff members which is best way of
making decision in globalisation era.
Consensus: This is an approach where in leaders take decisions by voting or poll. The
decision is taken mutually by all the members and put into action within Tommy Hilfiger. This
implies that decision is effectively taken by incorporating suggestion of all key people which is
the best way to manage successful business process when managing organisational activities
across international boundaries.
Convenience: This is a way wherein management can delegate the decision-making
power to workforce so as to increase their intellectual capabilities as well as boost their morale.
This helps in creating an effective coordination with team where decisions are with collaborative
efforts which will help Tommy Hilfiger in dealing global issues according to different ideas from
diverse employees.
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P6. Various routes to internationalisation along with their barriers as well.
Internationalisation or globalisation refers to a process that deals in expanding business
operations at a global level. It interlinks or interconnects various business concerns with one
another at a global level as well. Internationalisation is intentional process of increasing business
in international markets. It is integrated, coordinated and strategic process which helps in
becoming globalized. It refers to designing of product or service to meet needs of users of many
countries. This concept helps in economic development and growth of company.
There are a number of ways in which business expansion can be practised such as joint
ventures, licensing, export import etc. These have further been explained as under:
Licensing- It is a process of getting or giving official permission to manufacture or
produce product or services specifies payment. Payment includes lumpsum, royalities, or a
percentage of licensee's sales. This concept helps in increasing market share, maximising
exposure, increasing sales revenue and drives customer preferences. Some common types of
licensing are patents, trademarks, and copyrights. It is a arrangement where one companies
gives another company right to manufacture its products after payment of fees. This concept
helps in profit maximisation and growth of company. Their are some drawbacks of licensing
which includes more cost, loss of control, and certain risk assosciated with agreement.
Franchising- It is contract agreement between two parties franchisor and franchisee.
Franchisor grant franchisee right to use its trademark, systems to produce products or services
according to specifications given. Also, to use business model, franchisee has to pay fees or
royalty to franchiser. This agreement is for specific time period which is mentioned in terms and
conditions. It helps in expansion of network of franchiser, increasing goodwill, and less efforts
required for promotion. This is best alternative for development of chain stores and avoid huge
investment. Major drawback is that if franchisee does not provide quality products and services
than reputation and brand name of franchiser will be suffered. Also, there are various restrictions
for franchisee due to which it lacks freedom while conducting business operations.
Joint venture- It is a cooperative enterprise formed between two or more business
entities for a specific purpose or activity. It is described as the cooperative enterprise which is
entered into by two or more business identities for purpose of specific project and business
activity. It can be formal and informal and for short and long term. This create a separate
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business identity in which owner contribute its assets. It basically separates companies with
shared goals and interest. When two or more company join together for creating synergy than
new entity formed is called a joint venture. In this two companies of different country also
undergo to this for conduct business.
Advantages: This aids in optimal utilisation of resources, competencies of technologies as well
as both firm can know one another.
Disadvantages: Joint ventures barriers can be expensive, disputes between members as well as
nation. Because of political stability as well as cultural can emphasis for threats to effective
organisational operations as well as disputes into managements.
Apart from this businesses also need to undergo or face a number of barriers which they
face while expanding their business operations which have further been mentioned as under:
Barriers of internationalisation:
Financial barriers:Finances in a business concern are present in a nominal amount
which happens to be a major barrier in expansion of business of many companies as they will
require ample amount of funds. Especially small and medium sized companies require a quite
huge amount of resources and finances if they wish to expand their business operations. For
achieving efficiency in this context companies will have to adopt facilities of loans as well as
financial assistance in a number of other ways as well.
Managerial barriers: Another important barriers or restricting force in context of
internationalisation happens to be managerial barriers which occur due to lack of skills and
efficiency in employees. In many business concerns it has been observed that managers lack a
certain amount of efficiency and skills which help in business growth and expansion. Main
reason behind this barrier is lack of knowledge regarding international market as well as
perceptions regarding managerial risks as well.
Cultural barriers: Culture happens to be a major external barrier in context of companies
which plays a quite important role in globalisation nor internationalisation processes. Culture and
cultural practices happen to be a major factor that influences consumption pattern that consumers
follow. Every country has its very own culture and background which affects business
organization in a negative as well as positive way. Before entering into new market owner should
have proper knowledge of culture and language of that country. It is quite difficult to start a
business in international market. It is difficult to communicate any information or idea due to
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language and cultural difference. If a company have sufficient knowledge about the culture, taste
and preferences of customers they can enhance the productivity and profitability of the
organisation. For maintaining sustainability at market place it is necessary for a company to
know about the culture and background of the country.
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