Impact of Globalisation on Organisational Governance & Leadership, Functions, Culture and Structure

This article analyzes the impact of globalisation on organisational governance & leadership, functions, culture and structure. It discusses the challenges faced by organisations when operating in a global environment and provides specific examples. The article also examines the key factors that drive global commerce and trade.

Global Business
Environment

Table of Contents
Introduction......................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade. ..............................................................................................................3
TASK 2............................................................................................................................................5
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples..............................................................5
TASK 3............................................................................................................................................6
P3 Impact of globalisation on organisational governance & leadership, functions, culture
and structure...........................................................................................................................6
P4 Evaluation of influences of ethical and sustainable globalisation on organisational
functions.................................................................................................................................7
TASK4.............................................................................................................................................9
P5 Evaluate the different ways decision making can work effectively in a global context...9
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers................................................................................................10
CONCLUSION .............................................................................................................................12
References......................................................................................................................................14

Introduction
Global business environment is defined as a macro and micro factor that affects business
at international level. The macro factors include social, economic, technological, tax and tariff
environment. Company must understand the cultural environment of international companies to
work and operate efficiently and effectively. In assistance of this, Nowadays there are a lot of
MNCs which function and operate globally. Such organisation should involve themselves in
acquisition of culture and language of that institution in which they are working and functioning.
The success of any business based on external factor so its depend on firm's capability to plan
and design its internal environment in proper manner. Such plan helps in take opportunities
provided by external environment as well as its ability to defend against threats imposed by same
environment, for its success. The manager of CM Downton Limited provides logistics services
in order to maintain long term relationship with its client that helps in achieving success and
growth over a time period.
TASK 1
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade.
Globalisation is the term which is use to describe the interdependency of different
economy on each other. It is sharing of ideas, culture, technology and jobs across national
borders of the different country (Bedianashvili, 2016). It is grown today because of
transportation & communication advantage in business world. In context of CM Downton
limited, supervisor offer logistic services to its client internationally in order to increase
efficiency of the organisation. The key factors that affect the business globally which is
mentioned below:
Cost factor: Herein,there are various factors such as taxes,languages and political
agitation that must be considered while taking decision in respect of expanding purchase
and sales globally. The manager of CM Downton limited emphasised on taking a decision
regarding cost of providing logistic services to its client as well as benefit earn from them at
international level. They also considered various external factor such as currency, culture and
languages which deciding cost of offering services to its client. The management team of this
company offers faster transportation at affordable cost in order to satisfy the customers.

Market factor: It includes exchange rate, transportation cost, trade and tariff barrier
which have a direct impact on business across international level(Hamilton and Webster,
2018). The management team of C.M Downton limited focuses on external factors such as
transportation and logistic costs as well as trade & tariff barrier while providing services to
its client. This process helps in increasing profitability and efficiency of business by
satisfying the client.
Environmental factor:The present environmental factors involves global economical
crisis, intense uncert Analyse key factors of cost, market, environment and competition that
drive global commerce and trade ainty, multi-culture and reduction in government interest
towards common good that have a positive or negative impact on organisational that operate
at international level. In context of C.M Downton limited, the manager can considered all
those elements such as global corruption and lack of interest of government towards ordinary
goods which affect business at international level. The manager focuses on providing best
logistic services to its client in order to accelerate future success and growth of the business.
The main focus of business is earn more and more profit by considered all those factors that
affect the business organisation globally.
Competitive factor: These factors include change in policies, taxes rates, political
issues and international trade rules & regulations directly affect business operates at
international level. Political instability is one of the most important factors that impose direct
impact on business that functions at global level. In discourse to C.M Downton limited, the
managing director focuses on offering best logistic services to its client in comparison to its
rival competitors. They also analyse the business strategies of competitive firm that helps
them to gain competitive advantage. With the help of this, company will increase its profit
that helps in future success and growth of the business that operate at international level.
From above mentioned factors, C.M Downton limited company focusing on
competitive factor. The manager of this company analyse the strategies, policies and
procedures followed by other rival firms in order to achieve competitive advantage. They
provide best logistic services to its customer in order to boost profitability of business that
operate at global level. The company also emphasised on import and export rules that impose
direct impact on the companies policies and procedures.

TASK 2
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples.
C.M Downton limited is one of the biggest logistic firm established in U.K that offer
services to most prosperous blue chip organisation that operate at international level. In addition
to this,it provides best logistic services to it client for boosting profitability of the organisation.
The challenges faced by this company when it operates at international level that is mentioned
below:
Foreign rules and regulations:It is necessary to understand local rules and regulations
when company operate at international level. In addition to this, company follow foreign policies
and procedures for future success and growth of the business. The various challenges faced by
C.M Downton limited is to follow foreign laws and regulations, change in tax structure and
policies which impose direct impact on cost of the company.
Fluctuation in Currency rate: The fluctuation in currency rate is one of the biggest
challenge and issue faced by company. The change in exchange rate imposes direct impact on
business revenues and expenses, especially when it fluctuates at uncertain level. Global
economic volatility can make prediction of future earnings is difficult especially when exchange
rate fluctuate at international level.
Cultural differences and Communication difficulties:It is necessary to effectively
communicate with customer and clients for future success and growth of the international
business. However, C.M Downton limited company emphasised on effectively communicates
across different culture for growth and development of organisation operates at global level.
They provide best logistic services to its client by efficiently communicating with them across
different culture.
Human resources: The most important challenge faced by company is taking a decision
regarding the human resource requirement while operating business in foreign country. The
requirement of additional money to invest in the business for hiring new staff members for
success of business that operate globally(Wei, Thurasamy and Popa, 2018). One of the biggest
challenge for C.M Downton limited company is to take a decision in respect of investment in
hiring new team members for future success of organisation which operate and function
globally.

Choosing the right countries: It is necessary to analyse the drawbacks and benefits of
country for taking decision in respect of expanding business in that place. The challenges faced
by company are to find best country in which business operates globally (Damarwulan and
Farida, 2018). C.M Downton Company limited emphasised on providing good logistic services
to its client for growth of business in the country in which it operates.
Customer Satisfaction:Herein, Identifying needs and wants of consumer is one of key
element for taking business in foreign country. The challenge in front of company is to analyse
needs of foreign consumer and satisfying them by offering best services to its clients, customer
and communities (Doh, Lufthansa and Slocum, 2016) . Customer satisfaction is most important
element for successful international marketing of business organisation.
Tariffs and Export fees: It is important for company to analyse tariff charges and export
fees in bringing products into the country is one of the most crucial challenges faced by the
company. The supervisor of C.M Downton limited examines the tariff and export charges in
bringing products in country in which its business operates. These products help in providing
good logistic services to its client, customer and communities for successful international
business organisation.
TASK 3
P3 Impact of globalisation on organisational governance & leadership, functions, culture and
structure.
Impacts of globalization
Globalisation and number of impacts an organisation working where it have direct
impact on governance leadership functions culture and structure of organisation discuss below
which are related to working of firm. Globalisation brings opportunity for an organisation to
expand its business in different economist where it can expand its market share as well as
profitability ratio. There are some discussions about the impact of globalisation on different
factors of organisation which are mentioned below:
Organizational governance and leadership
Globalisation has different influence on working of organisation. This has also impact
on leadership & organizational governance of company. For example C M Downtown Ltd

follows autocratic leadership style because they are dealing in local borders (Kwok and Koh,
2017). But after globalisation they should focus on democratic leadership style as they have to
focus on global market. C M Downton Ltd currently governing with transactional leadership
style which follows the old school rules and have negative impact on firm because of rigid
format but in global context C M Downton Ltd should adopt the transformational leadership
as because globalisation follow concept of innovation and transformational leadership has lots
of scope for that. Globalisation and can increase its operation in that market also impact on
organisation governance of company as it will increase C M Downton resources which leads
in change in governing pattern of firm. globalisation have various impact on this firm as it
will get benefits of new market.
Structure
Structure of any organization is the key to success of firm it facilitates firm in smooth
working and bringing effectiveness in work. Globalisation have a major influence on
structure of C M Downton Ltd as company is currently following the network structure in
there limited which is rigid and flow of power is complex in it a but globalisation needs a
fixed structure which have good flow of powers and authority in organization as rigidity will
be removed(Saleh and Watson, 2017) . Smooth structure will also facilitate in easy flow of
information which is must for globally performing enterprise. Globalisation also influence on
communication structure of organization which is decrease in cooperation as it has to adopt
high level of communication network. Good structure has proper impact on firm as it will lead
in increasing chance of profitability of organisation.
Culture
Globalisation is the process of linking different economy and their culture. C M
Downton Ltd is a company of UK which follow the culture of UK. The client of this company
are also belongs to United Kingdom but in globalization company will come in tough with
different nations and cultures which means company has to higher employees there (Hill and
et. al., 2017). Which bring new culture in firm that may give rise to conflicts and these
conflicts have to be managed by staff by direct intervention and group discussion. Culture
has its great impact on organisation as it help firm in managing good working
environment
Functions

Organization functioning always depend on where the organization is currently
working as it has to form its function according to the environment surrounded it. C M
Downton is working in UK and its functions are depending upon it only. But in globalisation
context it have to change its functions according to policy & laws of other nation where it
wants to expend its operations as globalisation brings increased opportunities so organisation
have to make changes in its function to grab those opportunities.
7 McKinney’s model
This model was developed by Tom Peter and Robert Waterman in 1970, where the both
are consultants at McKinsey and company. While working in the organisation they identify
that there are seven elements in an organisation which are need to be identified for building
competitive advantages as well as increasing the performance of organisation. They further
divided the seven elements in two categories which are hard elements and soft elements. Hard
elements are strategy, structure and system where soft elements are shared value, skills, style
and staff.
Strategy: this element states that there must be a good organisation plan and strategy
within the organisation for maintaining the competitive advantage over its competitor. In
context of CM down ton, company use a plant structure via top level management plan
strategy according to the staff and other internal and external factor of organisation where we
can get the behaviour of every individual towards the goal of the organisation and achieve
them with the time limit.
Structure: it is that element which is directly related to the concept of globalisation.
Because of globalisation there are number of structural changes in working of organisations
like CM Downton, prior to this globalisation have no proper structure for working but now
they are using departmentalization where every individual know that whom he has to report
and what are the duties and liabilities of their respective job within organisation which
impacted directly on the behaviour of an individual.
System: system is related to the activities and procedure which type of organisation
used for performing the job and getting the work done. In context of CM Downton, firm using
proper system where every individual know how to use it as they conduct training and
development programme, Decide breathing pattern culture and processing of organisation as
there is no delay in work because of adequate system and good working condition.

Shared values: this is related to core values of organisation which are related with
culture and work within the organisation. In reference to CM Downton, this system is directly
related to their culture and general work ethics in the organisation where from follow number
of working cultures this is because of using the concept of globalisation and no discrimination
according to the caste religion and culture of a person.
Style: this is related to the adoption of leadership style by the organisation. In context of
cm long term there is demographic leadership style where every individual has equal right to
give suggestion to leaders.
Staff: this is related to the employees and their general capacity within the organisation
for performing particular jobs. Proper training and development session will be conducted in
CM downtown for increasing the skills and capabilities of employees where we can perform
the complex tasks easily and bring productivity in their work.
Skills: skills are related to the competency of the organisation employees that how they
are better from other organisation. Here CM downtown perform performance appraisal as
well as number of other tools for increasing the performance and skills of the employees to
compete with other organisations and get maximum competitive advantage in marketplace.
P4 Evaluation of influences of ethical and sustainable globalisation on organisational functions
Impact of ethical and sustainable globalisation on organisational functions
Ethical Globalization
The Ethical Globalization is considered as the process in which it guides strive for
integrating human privileges as well standard into a further ethical globalization process. The
manager of CM Downton focuses on different social factor which imposes direct impact on
activities and functions of business organization. There are many factors which are related to
society such as child labour, environment issues, taxation as well as corruption which is going to
be mentioned below:
Child Labor: Child labor signifies to the exploitation of children in any term of work
that is physically and mentality harmful for children. It is not ethically right to perform the
different business activities and function through the children which impose direct impact on
globalization. The manager of CM Downton must focuses on performing their work from the
person who is not under 12 as per child labor act.

Environmental issues: There is different kind of pollution such as air, water as well as
noise pollution which imposes direct impact on globalization. Therefore, it is necessary for the
manager of CM Downton Company to minimize the pollution in order to increase the standard of
living of people in the society. It maintain positive image in mind-set of customer at
marketplace.
Taxation: It is important for top management of CM Downton Company is to consider
taxation structure in order to run business in successful manner. The tax policy imposes direct
impact on globalization. Therefore, it is necessary for business firm to provide tax in timely
manner, thus it helps them in enhancing success as well as growth of business organization.
Corruption: Corruption is considered as a dishonesty as well as immoral crime which
occur within business organization which imposes direct impact on globalization. Therefore, it is
the responsibility of manager to emphasize on immoral crime occurs within workplace as well as
minimizes it to increase productivity as well as profitability level of business organization.
Therefore, it is necessary to consider all these issues which impose direct impact on
globalization. And also the manager of CM Downton tries to minimize these effects which occur
within business organization. It helps in maintaining brand image as well as reputation of
business form at marketplace. And also it increases sales as well as profitability level of the
company.
Organisation functions
These are those functions which are related to produce and sell product of organization.
These are mainly six functions Design and Production, Finance, Human Resources, Sales and
Marketing, Administration, Research and Development. Management has to establish smooth
communication in these functions for effective utilization of resources.
Design & production: this function is directly related with production of product. It
includes labour, capital, energy, materiel and information which are core for design &
development. Factor of production can vary with firm nature like C M Downton Ltd is logistic
firm so its factor of production are heavy duty truck, land and labour (Thanetsunthorn and
Wuthisatian, 2016) . Globalisation have positive impact on this function as ethical and
sustainable globalization facilitate C M Downton Ltd better designs for them and it will also
help them to adopt new production methods .

Finance functions: function is related to capital requirement of company for running
their operations. This can be done by issuing shares or debentures. If C M Downton Ltd wants to
expend its business globally than it has to face direct impact on its financial position as
globalisation requires more capital investment of the company for expebnding its operation to
global market. Like C M Downton Ltd has to buy new transportation methods for other nations
which require huge investment.
Human resources functions: these functions are those which helps the management in
fulfilling human resources needs of organization. Human resources are the prime resources of
firm without which no organisation can work. Ethical & sustainable Globalisation will directly
impact this function of C M Downton Ltd as there is large number of HR requirement in firm
and they have to fulfil these needs by ethical recruitment and fair selection of personnel.
Sales and Marketing: sales & marketing is important function of management which is
directly related with their product sales. Marketing involve advertisement & promotion of firms
product. Sales is not the purpose of C M Downton Ltd as they does not deals in product (Praka
and Baru, 2016). But marketing is the important for organisation as in globalisation company has
to introduce itself to new market so it needs to use advertisement ethically with sustainable
globalisation.
Administration: this function involves administration working of mail handling, dealing
with enquiries/complaints, catering, and computer services. Globalization also bring these
changes in administration of firm. Organisation like C M Downton Ltd has to change its
administration functions for achieving global consumer’s satisfaction in aim of ethical &
sustainable globalisation in firm’s perspective.
Research and Development: research & development is that function of management as
it includes development of product, analysis competitor product and improve production
methods (Habisch and Bachmann, 2016). The process of research and development is very
important for firms like C M Downton Ltd just because they have to face tough competition
from global competitor which can cause negative impact on firm profitability so firm have to
make a proper research and develop their product accordingly for sustainability in globalisation.
This all thinks have direct impact on function of CM Downtown as it will leads in proper
analysis of all factors of firm which can help it in increasing its growth and objective which also
facilitate smoothness in working environment.

TASK4
P5 Evaluate the different ways decision making can work effectively in a global context
Decision making is the process of choosing best one from among given alternatives.
Decision making of supervisor and manager is plays an crucial role in order to manage
business functions in suitable manner. It is essential for supervisor to take decision based on
situation and circumstances of workplace thus it results in boosting profitability and
productivity of the company. In context of C.M Downton limited, the manager of company
emphasised on taking best decision among various alternatives given. It is necessary for
company to take a best decision that helps in providing best logistic services to its customer.
In addition to this, it helps in future success and growth of the organisation that operate and
function at global level.
Steps for improving decision making
Identify clear objectives and goal: The manager of C.M Downton limited identifies
goal and objective of organisation. Based on this, the manager take a best decision about how
to achieve goal and objectives of organisation in order to expand business globally (Tuleja,
2016). This will help in increasing sales as well as market share of the company.
Dynamic Process: It is necessary for supervisor to take decision according to the
changing situations and circumstances in order to accelerate profitability and productivity of
business organisation . In context of C.M Downton limited, higher authority takes a decision
based on changing condition and situation that helps in increasing efficiency of the company
at global level. The manager must focus on changing situations that helps in boosting profit of
business organisation.
Fulfilling needs of employees:It is necessary for company to fulfill needs and wants
of employees for expand its business in foreign countries. In addition to this, the organisation
must focus on satisfying the needs and wants of employees in order to increase sales of
company. The satisfied employees offer best services to its customer that helps in accelerating
market share of the business organisation.
Market Trends: Hereby, the manager of C.M Downton limited emphasised on
change in market trends, fashion, taste and preferences of consumer in order to take decision
about how to expand its business at international scale. The company must consider all market
trends before taking any decision of the company (Chandramohan and Bali, 2016). Due to

change in market trends and fashion, the R&D Department of company emphasised on
searching information related to new trends that helps them in modifying and updating the
understanding towards the fashion. It results in boosting sales and profit of the company.
Technological advancement: It is one of the most important decision taken by
supervisor in order to implement and execute the advanced technology in the company.
Technological advancement is a key element that is necessary for expand business globally.
It saves time and efforts that helps employees in performing their work and task within a
given time frame. Due to advanced technology, the employees of company provide best
logistics services to its customer in order to accelerate business at global level.
P6 Determine and articulate the various routes to internationalisation an organisation may adopt,
including key barriers
Internationalisation of an organization have various stages and methods which are
stated below ;
1. Direct & indirect export : In this method internationalisation is done by producing
products in home market but exporting them to forging market . This is the oldest and
most common method of internationalisation. This concept got strengthens due to
European Union (EU), NAFTA (North American Free Trade Association), ASEAN
(Association of South East Asian Nations), and APEC (Asia Pacific Economic
Corporation) free trade agreements. The export based methods of internationalizing are
divided into ‘indirect exporting’ and ‘direct exporting’. This method of
internationalisation is not suitable for C M Downton Ltd because company is not
manufacturing products and services can’t be exported.
2. Licensing: It is the permission granted by owner of property to licensee for doing
business activity on the resources of other person ( licensor). The licensee buys the right
to exploit technology and products from the licensor, which is protected by the
intellectual property rights like patent, trademark or copyright(Falkner, 2017) . This type
of agreement is mostly found in industries like R&D and other industries where fixed
costs are high. This method is suitable for C M Downton Ltd as there are huge
investment in assets of the company.

3. Franchising: In this method firm use franchise of other rather than using patents of
company. In this company can work by using name of other firm. Many firms choose
franchising as a means of internationalizing as it establishes firm’s business in short time
with little direct investment and creates global image through standard marketing
approach (Kasemsap, 2016) . This method is also suitable for C M Downton Ltd as it
includes low investment and have no global presence so it can start under other company
brand name
4. Joint Ventures: When two or more firm come together to form a new organization in
market with separate legal existence then it is termed as joint venture . It helps to share
technologies and lower the costs of high risks in various development projects of
enterprise. This method is also good for C M Downton Ltd as it will help the
organisation in identifying new market.
5. Merging with a firm : It is equity based method of internationalisation of firm.
According to it a firm can internationalise itself through FDI in other nation organization
and purchase there equity for holding the powers in that company (Adekola and Sergi
2016). It helps to extend its business rapidly and can use its infrastructure and knowledge
about local market to improve its market share compared to its competitors for C M
Downton Ltd .
Barriers in internationalisation
these are those factors which bars the organization to enter in global market. These are
mainly Legal Barriers,Non-Tariff Barrier and Political Barriers.
Legal Barriers
legal barriers are those which bars organisation in entering to new markets on global platform.
he government of certain countries impose legal impediment or incorporate trade restrictive
legalities for firms which restrict them to enter in those nations market. This is because every
county have its own laws, for example one nation allows truck drivers to drive 24 hours in a day
but other allows only for eight hours. This can impact adversely on performance of C M
Downton Ltd as they have to mange time for different country which will impact on there cost.
Non-Tariff Barrier

Non-Tariff barriers , such as quotas, embargoes, sanctions, quotas and other restrictions pose
barriers to internationalization. These barriers are used by developed nations or big economy to
control trade . It is also act as barrier for C M Downton Ltd as, developing economy provide
huge amount of subsides to there local firms which will decrease cost of competitor of C M
Downton Ltd in these nation and will have negative impact on firms profitability.
CONCLUSION
After a brief study of above report, it can be seen that globalization is important in
business as well as firm . Every enterprises should follow sustainable and ethical globalization
in order to run activities successfully. So, organisational functions are carried out carefully
and their effects of globalization is determined. To expand the business firm adopt
internationalisation method which means expanding and and widening the market area of
enterprises. It depends on the corporation to adopt which route or path to for
internationalisation. Also, there are various barriers which occur while going with these entry
modes in foreign market. So, barriers are to be considered while going with international
market. Hence, globalization and internationalisation both are crucial for business .

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