GLOBAL BUSINESS ENVIRONMENT

Running Head: GLOBAL BUSINESS ENVIRONMENT
GLOBAL BUSINESS ENVIRONMENT
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1GLOBAL BUSINESS ENVIRONMENT
Table of Contents
Introduction......................................................................................................................................3
Activity 1: Global business environment........................................................................................4
Analysis of the key drivers of globalisation................................................................................4
Progress and application of technology...................................................................................4
Development of services..........................................................................................................4
Growth in consumer pressure..................................................................................................5
Increase in global competition.................................................................................................6
Changes in political situation and government policies..........................................................6
Complexities of strategic challenges in global business..............................................................7
Political changes..........................................................................................................................7
Cultural diversity.........................................................................................................................7
Diverse currencies.......................................................................................................................8
Regulatory challenges..................................................................................................................8
Interdependency...........................................................................................................................9
Critical analysis of the strategic challenges caused by globalisation..........................................9
Business risk............................................................................................................................9
Diversification strategy..........................................................................................................10
Supply chain management.....................................................................................................10
Evaluation of the global business environment.....................................................................11
Activity 2: Scenario based analysis...............................................................................................14
Influence of globalisation on organisational governance and leadership..................................14
Organisational governance....................................................................................................14
Globalisation and leadership..................................................................................................15
Principles of corporate governance.......................................................................................15
Influence of globalisation on organisational structure...............................................................16
Influence of globalisation on organisational culture.................................................................16
Influence of globalisation on organisational functions..............................................................17
Ethics and sustainability on organisational functions................................................................17
Influence of ethics on organisational function.......................................................................17
Evaluation of global sustainability over organisational function..........................................18
Global market influence over organisational structure and culture of Shell Plc.......................19
McKinsey 7s model on organisational structure...................................................................19
Hofstede’s cultural dimension...............................................................................................20

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Different ways of decision making in Shell Plc........................................................................21
Decision making in global context........................................................................................21
Ways to enter global markets................................................................................................21
Evaluation of the key barriers to globalisation and recommendations..................................22
Justified recommendation for Shell Plc.................................................................................23
Conclusion.....................................................................................................................................23
Reference.......................................................................................................................................25

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Introduction
Globalisation is identified as a significant phenomenon in the current business practice. It
is associated with products, technology, information and the jobs beyond the national and geo-
political boundaries and cultures (Dieuaide 2018). From the economic perspective, it can be
defined that the interdependence of the nations across the globe facilitates a healthy environment
which is driven by free trade practices. In course of time the concept of globalisation expands its
original idea of economic relaxation and become a part of the society and culture. From the
research of Waddell (2017) it can be argued that the concept of globalisation is a dynamic aspect
and it connotes not only the economic paradigm but the political, social and the cultural aspects.
However, the research of Thomas (2018) clearly put emphasis over the economic aspects and
corroborated the fact that the initiation of globalisation has been started with the expansion and
development of economy. As a matter of fact, the paradigm of global business is related to the
process of shared and integrated environment. Technological advancement and the competitive
dynamics supplement the development of globalisation to a great extent and help to transcend its
foundation from single economy to free trade and free capital movement. Therefore, from the
research of Cramer (2017) it can be stated that globalisation is a process to open foreign financial
and investment markets for the international companies with the characteristics of deregulation
and improved communication. Based on this understanding, this essay is going to prepare a
critical analysis of the key drivers and concepts of globalisation. In addition to this, the impact of
globalisation on companies like Shell Plc. will also be discussed in the essay for an in-depth
understanding.

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Activity 1: Global business environment
Analysis of the key drivers of globalisation
Progress and application of technology
The technological development makes it easier for people to communicate and connect
with each other. Therefore, the geographical boundaries and cultural barrier are no longer a
triggering factors for people and they can easily get connected with others even from distant
location. One of the most important advantages of technological progress is that a global village
has been created through expanding a vast network of communication. Mukherjee and Dutta
(2018) stated that the technological development and innovation supplements the process of
globalisation in business as the business organisations are also understood the importance and
significance of implementing cutting edge technologies. According to Rowley, Ishikawa and Oh
(2019) the development of technology put great impact over the relationship between the
organisation and the customers and a transparency can be made between them. Nevertheless,
there are some challenges like high costs and maintenance measures of the cutting edge
technologies is very complex that increase the expenditure of the organisation to recruit experts
who can monitor and resolve the issues.
Development of services
The gradual increase in demand and expectation of the customers have a great deal of
impact over globalisation. There are significant benefits of service development which are
supported by the empirical evidences. Faghih (2019) stated that people are well aware of their
demands and very much concern about the quality of service. Therefore, it becomes a pertinent
measure for the business organisations to deal meet the demands and expectations of the

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customers effectively. In course of developing service facility, the companies feel the need of
expanding its business operation further in the international market to attract more customers. By
meeting the needs of the customers, companies are trying to ensure more profitability in business
and solidify the business to a great extent so that for future sustainability. The impact of
development of service has a positive side in terms of encouraging the business organisations to
expand business. As a result of that an opportunity to increase profitability can be created for the
business organisations in the competitive market. However, certainly a number of challenges are
arose such as the fluctuation in the consumer behaviour can jeopardise the entire service
development process. In the international market it is very much uncertain to have a preconceive
idea about the consumer behaviour. As a result of that vulnerability for the business organisation
is increased subsequently.
Growth in consumer pressure
The consumer pressure is also associated with their demands and expectations. Unique
expectations of the customers and the changing needs also pave the way for influencing the
process of globalisation. In fact, the growth in consume pressure is identified as one of the
leading advantage for the progress in globalisation. From the research of Bartsch, Riefler and
Diamantopoulos (2016) it can be derived that consumers are trying to influence the business
organisations to a great extent by placing demands and influencing the market trends. Apart from
that Jha and Gozgor (2019) confirmed that the global population is growing at a gradual pace and
it becomes important for the business companies to stretch its business operations beyond the
national market. Therefore, it also heightens the growth of globalisation to a certain extent. As a
result of that globalisation is able to be developed as per the market demand and trend. Still there

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are some challenges like growth limit even for globalisation and the uncontrolled development
can create serious threat for the business organisations to survive in the market.
Increase in global competition
Competitiveness in the market is another important advantage on which the progress and
relevance of globalisation depends. The development in the global competition can facilitate a
positive impact over globalisation where the market trends can be identified properly and the
business organisations can deliver an effective organisational practice so that it will ensure high
profitability. However, from the research of Steenbergen and Siczek (2017) it can be found out
that competitiveness in market can take bad turn and it will definitely be a catastrophe for the
business organisation to pursue with heavy burden of the market. Therefore, a balance is always
required to meet the interests of the organisation and the keep the objectives intact. Therefore, it
will be a challenge for the small and medium scale companies to survive in the competitive
market properly.
Changes in political situation and government policies
High interference from the government can also influence the development of
globalisation. Fong and Leibrecht (2019) advocated that it is an advantage for the business
organisations to follow the government regulations in order to practice a hustle free business. As
a result of that a guidance can be provided to the business enterprises so that they can easily
develop their business. Nevertheless, it can be a challenge for the companies in the form of
interference from the government can pose threat to the autonomy of the business and it is grave
challenge for the business organisations. Nevertheless, the political stability and government
policy will help a business company to follow ethical business practice. It will definitely have a

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deep impact over the globalisation process where the orientation of the organisation determines
the outcome of globalisation.
Complexities of strategic challenges in global business
Political changes
Political change is definitely identified as a crucial factor for the multinational business
companies while performing in the international or domestic market. Political strife and
instability can create a great deal of impact over to operational practice and sustainability of an
organisation (Habich and Nowotny 2019). In case of Shell Plc. the political changes is created
huge impact over the business orientation of the organisation. From the media release of Shell
Plc., it can be derived that the Nigerian government made a negotiation with Shell for
exploration and production of oil. On the other hand, the Brexit issue has been a triggering factor
for Shell Plc. to operate in the European region as there is a growing tension between Britain and
European Union that affects the business of Shell Plc. as well.
Cultural diversity
According to the research of Endong (2018) cultural diversity is considered to be a
potential factor for the business companies in order to set sustainable development. The cultural
diversity practice provides a clear picture of the stand of the organisation either for or against
discrimination. In case of Shell Plc., the company is strongly focuses on the diversity and
inclusion practice. From the sustainability report of the organisation, it can be found that the
management also interested to support the interests of LGBT. As a matter of fact, focusing on
talent rather than gender, ethnicity or sexual orientation is identified as a crucial factor for Shell
Plc. to establish a strong team. In fact, Balli, Pericoli and Pierucci (2018) opined that it is