Global Business Environment: Key Factors, Challenges, and Influences on Organizational Functions

This report explores the impact of globalization on Deliveroo, a British multinational company in the food delivery sector. It analyzes the key factors that drive globalization, strategic challenges faced by organizations in the global environment, and the influence of globalization on organizational culture, structure, and functions. It also discusses ethical and sustainable globalization and different ways of effective decision-making in a global context.

Global Business Environment

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Key factors that drive globalization.............................................................................................3
Strategic challenges faced in global environment by organization.............................................6
Influence of globalization on organization's culture, structure and functions.............................7
Influence of ethical and sustainable globalization on organizational functions..........................8
Different ways of effective decision-making in global context...................................................9
Various routes to internationalization and recommendation to overcome barriers...................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Globalization refers to the process that enables global interaction and integration among
people, companies and government. The increase in globalization has helped in growth and
development of international trade and economy. The report is about Deliveroo a British
multinational company dealing in delivery service in food sector. The founder of the company is
Will Shu and Greg Orlowski headquartered in London, England. It operates in more than 200
locations all over the world. It is an online food delivery platform which connect customers and
local restaurants. The revenue is generated through commissions, packaging sales and user fees.
The report is about the analysis of key factors that impact globalization using PESTLE analysis.
Further it highlights challenges faced by Deliveroo while operating in global environment. The
evaluation on the influences of globalization on organizational culture, function and governance.
Further evaluation on influence of globalization ethics and sustainability on organizational
functions. The report also highlights the various routes that can be adopted by organization for
internationalization along with its barriers. Evaluation of different ways of decision-making that
can work effectively in the context of globalization.
MAIN BODY
Key factors that drive globalization
Globalization is the manner through which countries are able to meet out the deficiency
in their countries. The expansion of global market and removal of trade barriers has enabled
exchange of goods and funds (Walter, 2021). The four aspects of globalization are exchange of
products and services, exchange of financial resources for capital and investment purposes,
migration of people and enhancement of knowledge. There are many factors that impact global
trading of Deliveroo.
Cost
The cost of resources that are used operation of any organization differ from one country
to another. Company can take advantage of this diversified cost factor as it can operate in the
market where there is low cost of operations and ensure higher profit margin. Company can also
hire human resources from other countries where cost of hiring them is low.
Market
The scope of operating in domestic market is very low and globalization gives an
opportunity to the companies to expand its business and increase its revenue (Ye, 2019).

Common customer needs and opportunity to operate in global market positively impacts the
growth of organization.
Political
Political factors refers to the political and government policies imposed in different
countries to facilitate trade and commerce in global market. These policies also enable the flow
of finance and capital in global market. A number of institutes and countries together has
formulated the policies of globalization. The change in government policies of a country may
impact the trade of company in which it is operating. It is essential for the company to have
knowledge of all the government policies and globalization policies for smooth functioning of
business. Non compliance of these policies may result to penalties and loss of market of that
country.
Economical
Globalization has enabled companies to hire people on contract basis and at cheaper
labour cost. It has also enabled banks, financial institutes to easily transfer of funds across
borders. This has helped companies to raise funds from global market and invest it in their
projects.
Socio- cultural
Social factors includes demographic, lifestyle, taste and preferences and behaviour of
customers. Socio cultural factors differ from one country to another (Babenko and et.al., 2019).
To operate in a country company needs to analyse and evaluate the socio culture of that country
and have a detailed research about the targeted customers and their behaviour. Company can
ensure customer satisfaction only is it renders services according to the need of its targeted
customers. The cost of transmitting information is very low and society can take advantage of
this by using products and services globally. This has ultimately resulted into change in tastes
and preferences of customers as it has opportunity to choose from variety of products and
services.
Technological
The advancement in technology plays a vital role in expansion of globalization and
shrinking the world in one market. Technology up-gradation has enabled the companies to reach
global market and rapid expansion of its business (Bogoviz and et.al., 2020). The multinational

food chain are able to expand globally which has increased the scope of Deliveroo to enter new
market. Technology has also enabled easy fund transfer through electronic banking system.
Environmental
Globalization has negatively impacted the environment. The increase in transportation
has lead to habitat destruction, increased pollution and also affected the natural resources. It has
also reduced biodiversity by deforestation, climate change, etc.
Legal
Legal factors are those factors that arise from the changes in rules and regulations of the
country (Babenko and et.al., 2019). This may include laws imposed by the government of a
country in which company is operating to regulate the operations of the company. There are
many rules and regulations which differ from country to country. Company needs to have
knowledge about all the rules and regulation which may impact the operations of the company.
Competition
With global market there will be increase in competition within the industry as there may
be different companies with their diverse strategies and pricing. To compete in the market
company needs to achieve competitive advantages which would enable it to maintain its position
in the market and increase market shares.
The key factors of globalization may impact the business of the company in both positive
and negative manner. The globalization enables Deliveroo to access new culture and market.
This enables the company to render knowledge about the market and the customers along with
their behaviour. Globalization helps company to expand its business and increase its customer
base. The companies are able to hire resources at low cost as it can access resources from the
countries where it is available at low cost. This would enable company to increase its profit
margin as cost of rendering services is low. Globalization has enabled company to access new
skilled and talented employees which would help in rendering innovative services to its
customers. The demand for skilled employees is very high which make it difficult for the
company to hire skilled employees according to their need. The employees of company are of
different culture and background which make it challenging for the company to manage diverse
employees and avoid conflicts.

Strategic challenges faced in global environment by organization
There are many challenges faced by organization while operating in international market.
Language barrier
There is slight or huge difference in languages of different countries. When organization
plan to operate in a country it's important to take into consideration that language of that country.
To build a strong relationship with the people of the country it is essential to communicate with
them in their own language this will attract them (Ramlan and et.al., 2018). For example,
Mercedes- Benz entered into China market with Chinese name and adopted there product name
as Bensi which means rush to death. The name of the product was not accepted by the people of
China because the organization was not aware of the Chinese language. It had to change the
name to Benchi which means run quickly.
Cultural difference
Each country has its own culture and tradition and it is a very big challenge for the
organization operating in global market. Company needs to analyse and learn about the culture
of the country in which it is planning to operate. For example, the working hours of European
countries and US differ. Company needs to operate at different hours in different countries.
Managing global team
Another challenge of operating in global market is managing employees. The employees
working in the company are from different culture and background. When they all work in team
it is difficult to cope up with different languages, cultures, different time zones and there may be
technological variances too (Mockaitis, Zander and De Cieri, 2018). Company needs to facilitate
regular check-ins using conference video calls to build strong relationship among them and for
smooth functioning.
Currency exchange and inflation rates
The fluctuation in exchange rate also impact the organization. Company needs to closely
follow the fluctuation in exchange rate to avoid exchange losses. It is also important for the
company to monitor inflation rates (Ha, Stocker and Yilmazkuday, 2020). Inflation rates is
different in all countries and may impact the material and labour cost which would ultimately
impact the product price.
Foreign politics and policies

The business of the organization may be influenced by politics, policies and relationship
between countries. It is essential for the company to closely follow the changes in these factors
of every country in which it is operating and planning to operate. For example, the
announcement of Brexit has impacted the operations of UK companies.
Influence of globalization on organization's culture, structure and functions
The increase in globalization has influenced the organization's culture and raised the
concern of maintaining organizational culture. Organizational culture is very important for the
company to survive in a global market. Organizational culture refers to the human behaviour in
setting organization which represents values, principles and beliefs of members in the
organization. It also includes the organization's vision, mission, values, norms and system. The
organizational culture varies with the countries culture. The company which operates in the
global market has to follow the culture of every country in which it is operating and this impacts
the organization's culture. Emergence of new technologies and globalization are main force
towards change in organization's culture. The increase in globalization has influenced the
organizational structure and there is a need of improvement in the structure through
implementation of knowledge based structure (Isroilovich, 2020). This need for improvement in
organizational structure will enable the company to meet the needs of globalization.
Globalization has bought complexity in operation of the company and increased the level
of competition. The company needs to develop knowledge based decision-making structure to
meet the complexity and attain competitive edge. This means that globalization has changed the
organizational structure into knowledge based structure. Globalization has increased the access
of knowledge and information and influenced the cultural beliefs and values. This has
pressurized the company to change its leadership style to participatory transformational
leadership style. This leadership style enables the company to implement effective and efficient
strategic plans. The company is able to flexibly adopt the changes in customer needs due to
change in leadership style. Company is required to take internationalization decisions while
operating in global market which includes the decision related to entry in selected market and the
ways to exit the unattractive markets (Khan and et.al., 2020). The key factors of globalization
has influenced and impacted the organizational performance. The technological innovation has
improved the performance of company in the global market.

Influence of ethical and sustainable globalization on organizational functions
The ethical and sustainable decision-making in global market is influenced by many
factors which includes external environment, organizational factors and society. Globalization is
the process in which the functions of an organization is influenced more by international
characteristics and less national. Globalization implies a lot of structural reforms which are
influenced by Government of the country in which it operates. The tools that facilitate the growth
of company in global market are transportation, telecommunication and technology. Ethics is the
principles and policies that enable the functioning of the company. The decisions of the company
is taken after considering the ethics. Ethical decision impacts the reputation of the company so it
is essential for the company to carefully take ethical decisions. The ethical and sustainable
globalization impact on functions of organization are:
Human Resource department
Human resource is the one of the essential pillar for the organization to become
successful. These resources are managed by human resource management of the company and it
faces a lot of challenges in global market. The employees of the company are of diverse culture
and background and it is difficult to manage them. Due to difference in culture of employees
there is rise of commitment issues among employees and employer. Human resource
management of the company faces difficulty in hiring employees with unbiased attitude
(Stofkova and Sukalova, 2020). The ethics of globalization enable the HRM of the company to
be biased free. This also imposes the importance of avoiding discrimination, child labour and
sexual harassment.
Finance department
The company can't function without funds and financial resources and finance
department manages the flow of funds in the company. Ethical and sustainable globalization has
a direct impact on financial functioning of the company. There should be good ethical practice
by the organization to be financially sustainable in long run. The ethical practice includes fair
trading of products and services, mutual agreement between two parties in the trade and fair
consideration for providing products and rendering services. The company must also ensure
timely payment of taxes and filling of returns to the government. It is the responsibility of
finance department to produce fair financial statement and there must not be intentional
misleading.

Sales and marketing department
It is difficult to provide diverse products to different customers and to render customer
service. There may be rise in ethical conflicts due to different needs and preferences of the
customers. It is the responsibility of sales and marketing department to ensure the compliance of
ethical practices. There may be ethical issues regarding market policies, the promotion methods,
pricing and distribution methods and manner of communication with the customers (Ferrell,
2019). The sales and marketing department must ensure that there are correct labels on the
products and customers purchase exactly what they want. While giving advertisements for the
products and services company need to ensure that the content of the advertisement would not
affect the feeling of customers of any community or region.
Different ways of effective decision-making in global context
Effective decision-making is very essential in the organization to achieve success.
Effective decision-making is the one which can mitigate all the problems that are faced by the
company. There are many challenges faced by Deliveroo in the global market. Effective
decision-making enables the company to analyse the problems and take corrective measures to
mitigate the problems (Zhang, Kou and Peng, 2019). The decision-making strategy must involve
the employees of the company to ensure effective decision is taken. The ways of effective
decision-making in global context are:
Command
This is the method in which decision is taken by senior management without consulting
others. It is also known as authoritative method and employees need to just follow the command
of the senior management. It is the fastest decision-making method as it doesn't encourage any
ideas or recommendations from others. Deliveroo can apply this method of decision-making
when the decision needs to be taken quickly. It involves high risk as this method doesn't involve
any alternative opinion.
Consult
In this method the senior management of the company invite the opinion of others but the
final decision is taken by them (Pérez and et.al., 2018). The senior management or leader takes
opinion of other employees to analyse alternative ways to solve the problem and take final
decision. As Deliveroo is operating in global market it needs to take decisions which would have

impact on business and also the stakeholders. This way of decision-making also help in
motivating employees as they feel that they were included in decision-making process.
Vote
The company is operating in global market with diverse employees, this method enables
the company to take decision through voting method. It is a democratic method as each and
every employee is involved in this decision-making way. This will ensure bias free decision-
making method and employees would be encouraged to share their opinions. This would help
them to learn from each other and work in a team. It is a very good way to enable employees to
work in a team and also minimizes conflicts.
Consensus
It is the method in which group share their opinion and take decision when everyone
agrees to one opinion. This is the most time-consuming way of decision-making as it involves
different kind of people (Different ways of effective decision- making, 2022). In a global market
this way is not effective as employees are of diverse culture and it may take time for them to
reach at one opinion. The risk involved in this method is very low in comparison to other
methods but as it is time-consuming method company engaged in global market must not prefer
this method.
Various routes to internationalization and recommendation to overcome barriers
There are various routes through which company in local market can enter international
market. Company needs to follow following steps to enter new market and expand its business:
Choose the expansion country
Deliveroo needs to analyse and choose the market in which it wants to expand its
business. There are many factors that is need to be considered while choosing expansion country
i.e. demand for the service, legal regularities and policies, taxation issues, licensing and
certificates, etc.
Conduct a market analysis
Different methods and tools need to be used to analyse and evaluate the market of the
chosen country. The tools that can be used by the company are SWOT analysis, PESTLE
analysis, Porter's five forces, etc. Company need to evaluate internal and external factors that
impact the operation of the company.

Plan the market entry
After analysis the market, company needs to develop a plan to enter the market. There are
various routes to enter the international market.
Export method
The company can directly export its services through commercial intermediary. Company
can render services through intermediary in the chosen country.
Foreign direct investment
The company can partially or completely acquire the company which is already operating
in the chosen expansion country. It is a high cost route but the risk involved in entering the new
market is reduced.
Licensing
Company can enter into new market by entering into an agreement where licensee would
pay royalty to the licensor for using proprietary resources for specified period.
Franchising
In this method company enters into franchising contract where franchisee is authorized to
render services using franchise format and business system (Galhanone and et.al., 2020).
Company can enter into franchising contract with the company in chosen country and the
company will pay fees to franchisor. The company can authorize another company in the chosen
market to use its brand and business system.
Joint venture
The company can enter into a partnership contract with the company operating in chosen
market for a given period. This is a very good method of entering international market through
the support of partner who already know the new market.
The best route to expand the business of Deliveroo is entering into franchising contract
with the company in the targeted country. The advantage of franchising is that the company with
whom Deliveroo is entering into the contract know the market and there is less risk.
Evaluate the market position
After entering the market company needs to evaluate the market position of the
competitors in the new market.
Consider the targets

The company needs to group different consumers into different segments and choose the
targeted customers from different segments.
Render service and build customer base
After choosing the targeted customers company needs to render services according to the
customer needs (Dinu, 2018). This will enable customer satisfaction and to build strong customer
base.
The key barriers and recommendations to overcome them
There are many challenges and barriers faced by the company while entering global
market which were discussed earlier in this project.
Language barrier
The company needs to hire translator to translate the language of the country in which
company is planning to enter. Company can hire a person who has knowledge of different
languages. This would enable the company to overcome the problem of language barrier.
Cultural difference
Company needs to closely analyse and evaluate the different cultures of different
countries and render services which will not affect the feeling of people of diverse culture.
Company can group customers into different segments and render services accordingly.
Managing global team
Company must have an effective human resource management and good leader who can
effectively manage the diverse team members (Recommendations to overcome barriers, 2022).
The company needs to conduct induction for the new employees so that they can know the work
culture and the existing employees.
Currency exchange and inflation rates
The foreign exchange losses can be mitigated by the company using payment platform
like currency-cloud which would manage scheduling and create flat fee structure and stabilize
rate. Company needs to keep a close watch on the change in inflation rate and operate
accordingly.
Foreign politics and policies
The company needs to analyse and evaluate the changes in political and legal policies and
ensure the compliance of all the policies imposed in the country in which it operates.

CONCLUSION
Globalization enables the countries to exchange products, services and financial
resources globally. The increase in globalization has enabled international economic growth and
employment opportunities worldwide. It has helped people of different country to connect with
each other and understand diverse cultures and share ideas and knowledge. The project has
highlighted the key factors that drive global trade and commerce using PESTEL analysis. The
various challenges faced by Deliveroo in operating in global market. It also evaluated the
influences of globalization on organizational culture, structure and leadership. The influence of
ethical and sustainable globalization on the functions of Deliveroo. Further it discussed the
different ways of effective decision-making in global market. Finally, the project highlighted the
various routes to enter into global market for expansion of business and the recommendations to
overcome the key barriers of doing business internationally.

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Online

Different ways of effective decision- making, 2022. [Online]. Available through:
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Recommendations to overcome barriers, 2022. [Online]. Available through:
<https://www.askattest.com/blog/articles/6-ways-to-break-through-the-barriers-to-
international-expansion>