Global Business Environment

This report analyses the influences of globalization on the organization's structure and culture. It also analyses the influence of sustainable globalization on the organizational function. Also, it determines the various different routes to enter into foreign market with analysing the key barriers.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P3. Influence of globalization in Structure, functions and culture..............................................3
P4. Influence of sustainable and ethical globalization on organizational functioning................5
P5. Different ways decision making can work effectively..........................................................7
P6. Various routes to internationalization including key barriers................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Globalisation is a commonly used word which refers to global interaction and integration
of individuals from different countries, the two mains drivers of globalization are the foreign
direct investment and the international trade and these are supported by the information
technology rapidly (Shageeva and et.al., 2017). Globalization has several benefits and
advantages among which one is the improvement in standard of living by development of poor
nations. With the free flow of goods and services across nations it has created a system that has
provides various opportunities for local as well as multinational businesses.
British Gas is a home service energy provider. It was founded in 1997 by Frederick
Albert Winsor. Its headquarters are located in the Staines upon Thames, UK. Its products include
gas, electricity, renewable energy, central heating and boilers (British Gas, 2021). It serves
around twelve million homes in the UK. It is considered one of the biggest supplier of energy in
the markets of UK.
This report analyses the influences of globalization on the organization's structure and
culture. It also analyses the influence of sustainable globalization on the organizational function.
Also, it determines the various different routes to enter into foreign market with analysing the
key barriers.
MAIN BODY
P3. Influence of globalization in Structure, functions and culture
Globalisation refers to the increment in the flow of goods, capital, services, people across
international boundaries (Radović-Marković, 2019). In other words globalization of business
means change in the business operation of an organization from single country to operations in
multiple countries. It influences the structure, function and culture of and organization as well as
brings enormous opportunities for the company.
Mostly organization follows hierarchical structure. That is organization chooses it
structure based on the nature of their business operations and according to the needs and
requirements of the customers (Kokodey and Lomachenko, 2018). Also, while selecting the
structure of an organization environmental factors are also considered. As it is very important for
organization to select a structure that fits appropriately in the environment so that it can support
the business operations and satisfy the needs of the customers by providing them ultimate

satisfaction. Therefore, when an organization like British gas is aiming toward the global
markets, than it needs to inculcate an organization structure that supports customer needs and its
business operation. To operate in the global markets, British gas have to make strategic decisions
that focuses on the global standardization. Also, management has to choose a structure which is
adaptive. It means the structure adapts according to the different markets globally respectively.
There are three types of structure in the global markets which are:
1. Divisional structure- It a structure which is based on the division of product and
geographic in global markets.
2. Functional structure- It is a structure that is based on the primary functions of a company.
That is, it is divided on the base of operation, finance, human resource management,
marketing etc. It is used by the British gas company in the domestic markets.
3. Global matrix structure- It is a structure that is a combination of two or more structures.
To operate ion the global markets British gas should incorporate this type of structure as
it will be best fit fir the company.
So, it can be said that operating in global markets has a great significance over the
company' structure. Therefore, it is very important to choose the appropriate structure for the
organization.
Also, Operating globally also influences the culture of an organization. That is when an
organization operates in various different countries, it hires people from across the globe which
results in higher diversity ad employees are from different cultures (Damarwulan and Farida,
2018). British gas has to understand the different cultures and recognize them. By proper
understanding of the beliefs, perceptions and values of different culture, British gas can
formulate strategies for grabbing the market.
McKinsey’s 7S Model
It is a tool that is used by organization in planning and effective performance of their
business operations. It consists of 7 elements that are important for the success of a company.
For efficient performance these elements need to be aligned and reinforced properly for the
success of the organization. These are further divided into two parts that is hard and soft
elements. Hard elements include strategy, structure and systems. On the other hand the soft
elements includes the styles, skills, staffs and shared values.
HARD ELEMENTS

It includes three elements which are:1. Strategy- It refers to the action plan that show how an organization will compete in the
global markets with its competitors. It is one of the most important element of a business.2. Structure- It refers to the structure that is based on the nature of activity of the business
operations of an organization and the needs and requirement of its customers.
3. Systems- it is a part of the activities of business for delivering effective service to the
customers. Systems are a set of inter related element which are designed for achieving
something specific.
For operating in the global markets British gas needs to focus on the hard elements that is
it needs to built strategies across the core competencies, incorporate a supportive structure and
have system and process that utilizes the resources efficiently and effectively.
SOFT ELEMENTS
It includes four elements that are:1. Shared values- It refers to the standard guiding behaviour which is accepted by the
organization. In other words, it is the desired behaviour which is expected from the
individuals while performing their roles in the organization.2. Styles- It refers to how a manager or a leader in the organization is leading his team. That
is it influences the behaviour of the employees at workplace.3. Staffs- it s one of the most important element. As it drives the business of an organization
for achieving ultimate success.
4. Skills- it very important to have mandatory skill that are requires by the staff an dthe
management. Organization should provide proper training and development for
enhancing these skills.
British gas company needs to focus on the soft elements that is the leadership style that
influence the behaviour and performance. It also needs to have skills such a technical etc. by
providing effective training to its employees. With the use of this model, it will help British gas
in understanding the various elements for the success of a business. It can be critically evaluated
that McKinsey's 7S model is a very important model in planning and evaluating the effectiveness
of the performance of the business operation. It is very important that British gas company
inculcates this model so that it can enhance and improves its hard and soft skills. However
thistrategic challenges in context of risk and diversification strategies and the supply chain flow.

model ignores the importance on the external environment and is considered more static in
nature.
P4. Influence of sustainable and ethical globalization on organizational functioning
Sustainable development refers to the development that meets the present needs and
requirement Without compromising the future generation abilities to meet their needs and
requirements (Tallman and Buckley, 2018). In other words it means attaining long term
development. Sustainable development is not an easy task to attain. For ensuring sustainable
development there are some factors that needs to be focused by the British gas company which
are:
 Making efficient use of the markets.
 Strengthening its decision making process.
 Using of advanced technologies.
 Controlling and finding appropriate links to enter into global economy.
 Striving towards improvement by providing increased quality services.
 Maintaining relationships.
 Providing proper training and development.
Generally, sustainability of organization depends on strategic, financial, personal and
product sustainability. It is vertrategic challenges in context of risk and diversification strategies
and the supply chain flow.y hard to ensure same sustainable development in different markets all
over the world. Sustainability may vary from market to market in which the business is operating
(Janjić and Krstić, 2019). That is it can not relate to sustainability of a market to another. Various
elements such as economic stability, environment friendly, trade regulation, political stability,
laws etc. influences the sustainability of the business. The aim of British gas is to achieve global
sustainability by ensuring sustainable development of environment, economy and society.
However, it is difficult to achieve all at once.
Ethics refers to the moral principles and values that guides the conduct of an individual.
In other words it refers to the accepted behaviour which is followed by individuals. Every
organization need to follow some ethic for proper efficiency and functioning of its business.
When an organization expand it business activities in the global markets there are chances of
having ethical problems (Hacioglu and Sevgilioglu, 2019). That is when an organization operates
locally, it hires individuals and employees from its local area with the same culture, beliefs and

values. These things help in maintaining harmony in organization without any environmental or
cultural issue. However, when a business operates in global markets, organization hires
employees from global areas which could result in ethical conflicts because of the changes in the
values, perception and attitudes of different individuals. British gas company while operating in
global markets should see that they are not inculcating any unethical practices such as copying
products or services, malpractices, cyber crime etc. for effective functioning of its organization.
However, business ethics is one of the most important factor for operating in global markets. It
should be incorporated with the main business strategy for effective functioning of the
organization. Also, it will be beneficial for the organizational and will provide them with a
competitive advantage over its competitors.
P5. Different ways decision making can work effectively
An organization that operates globally needs to be competitive in various aspects such as
faster transportation, well equipped with the latest technologies etc. but most significantly
managing the operation of business with effective communication across the world (Xie and
Redding, 2018). So while working in the foreign markets companies have to make various
decisions that depends on the several factors such as time zones, culture aspects that includes
rules, regulations ans norms of the markets. As it is very difficult in understanding and
measuring the ambiguous aspects of the global markets, swift decision-making should be done.
That is swift decision-making will help in allowing the company to grab the various
opportunities that are prevailing in the market. And will provide the company with a competitive
advantage over its competitors. There are two ways in which decision-making is done depending
upon the situation, these decision needs to be made precisely and wisely. These decision-making
actions are:
1. Reactive decision-making- These are concerned with the immediate and quick decision
making based on upon the problem that has occurred in the organization. Mainly, these
decisions are concerned with problems, they are made under pressure. It is a stage that is
above from being inactive. Most of the time it is not considered optimal decision due to
its ineffectiveness (Akhtar and Sushil, 2018). These are only used in times of needs. That
is with these decisions help British gas company in defining the problem, then identifying
solutions by creating gap analysis. It will help the company in evaluating various

alternatives and options by analysing their impacts and then selecting the best alternative
for the outcome in the global markets.
2. Proactive decision making- These are the decisions that are concerned with anticipation
of several events which can impact the organization. Based on the insights , it is
concerned with rational and proactive decisions (Belyaeva, 2018). These are the
decisions which are considered most strategic in terms of decision making. This type of
decisions help British gas company in looking for possible solutions and making effective
use of that solution. Also, proactive decision helps in utilizing the experience and
knowledge in the workplace of an organization. In this manner, British gas company can
select more logical decision making action for their business operation in the
international market.
However, when an organization rather than being passive, it is active. That is when a
business takes initiative to make decision for the incidents rather than to react to it, then it is
making proactive decisions. Also, some additional variables are to be considered while working
in the global markets. Various elements can change globally without representing a sign and the
company may require making several decisions depending on it.
P6. Various routes to internationalization including key barriers
Routes to global markets refers to several channels that a company can use for entering
into the foreign market place. There are many alternative routes with diversity for entry
international markets. Some of the channels of internationalization of a business are as follows:
1. Licensing- It refers to an arrangement where one organization gives another organization
permission for manufacturing its goods and services for a specified amount. It includes
turn key contracts and franchising (Keivanpour, 2017). Also, licensing involves contract
manufacturing. In other words licensing is a process that charges royalty fees for using a
company's brand and expertise. It helps an organization in creating new opportunity for
business and passive income. Also, it creates an easy entrance into the international
markets. However, licensing may result in loss of control over its intellectual property.
2. International distributors and agents- These are refereed as an initial step to enter into
the foreign markets. Agents are the organizations or individuals that contracts with
companies to represent a particular country representing more than one business (Palalić
and et.al., 2021). On the other hand distributor takes full ownership of the goods and

services provided unlike agents. It is one of the most flexible and incurs low start up
costs. However, it provides a limited skill set to the organization.
3. Strategic alliance- It refers to a business agreement between two or more organization to
share resources for commencing a business precisely with an advantageous scheme. It is
a process where companies remains independent by forming a legal partnership between
the companies (Hrechyshkina and Samakhavets, 2019). It is less binding and involved in
compared to a joint venture. British gas to enter into international markets should use
strategic alliance as it will help the company in scaling up quickly by pooling invaluable
resources and expertise. However, strategic alliance may turn out to be a little risky as
trade secrets have to be shared. Also, there are possible chances that it might create
potential competitors.
4. Joint venture- Another route for entering into international market is through joint
venture. It refers to a commercial arrangement between two or more organizations who
come together to achieve a specific objective. In other words, it is an equity based
partnership where organization possesses a particular percentage of the business. It is one
of the most famous and commonly used routes to enter into global markets. It helps an
organization in reducing its liability that is by sharing its risks and costs. However, joint
venture are not flexible and may lead to clashes of cultures. Also, objectives of joint
venture are vague and unclear.
Strategic challenges in the supply chain flow
there are various challenges that are being faced by the supply chain management in
globalization of business. One of the major challenges faced ids the market volatility that has
continues in undermining the supply chain risk management. Also, with the limited granularity
of the data has led to lack of actionability. Also, another biggest challenges that is faced by the
British gas is the traditional inventory replenishment strategies are no longer effective.
Therefore, it is very important that there is proper formulation of strategies so that these
challenges in the supply chain can be overcomed.
Barriers to Internationalization
There are various barriers to internationalization of organization. According to the study
of international markets barriers to internationalization may occur in any phase of the process of
internationalization. Some of the barriers are as follows:

1. Financial barriers- Mainly organization face problems and difficulties in the global
markets related to availability of physical and financial resources (Aithal, 2017). While
entering into foreign markets British gas company may face issues regarding the lack of
financial sources, uncertain costs in international market and limited availability of funds.
These are the financial barriers that can be faced by a business in entering into
international markets.
2. Market based and managerial barriers- These are the most common barriers that are
faced by almost every organization while entering into foreign markets. It
includestrategic challenges in context of risk and diversification strategies and the supply
chain flow. behaviours and attitudes of managers, lack of knowledge and experience
about the foreign market rules and regulations. It also includes lack of skills of managers
in the foreign markets.
3. Industry specific barriers- These are one of the most crucial barriers which causes
pressure upon the organizations in the international markets (Veselovsky and et.al.,
2017). Example of these barriers is competition with rivals. That is competitors
influences the demand and supply in the markets for substitute products. Thus, it
becomes difficult for British gas company in competing in international markets.
However, it is recommended to the company that to overcome these barriers the British
gas company needs to take some corrective action so that there can smooth functioning of the
business internationally. That is with proper training and development of its employees it can
overcome its managerial barriers with higher diversification. And also, wit proper market
research it will help in understanding market trends better and grabbing the opportunities first.
Thus, providing a competitive advantage.
CONCLUSION
From the above report it can be concluded that an organization that operates in the
international markets needs to be competitive in various aspects that is in terms of technologies,
transportation facilities etc. Also, organizations need to make various decision depending upon
the situation like cultural norms and beliefs that are prevailing in the global market. Also, it can
be concluded, organization need to be active in terms of decision-making rather than being
passive for effective decision-making. At the end it can be concluded that there are various
routes to internationalization of an organization. British gas company uses the strategic alliance

route to enter into foreign markets as it provides them various advantages like low cost high
profits. However, there are some limitations to it. Also, there are some barriers that are being
faced by organization while entering into the international markets.

REFERENCES
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Online references
British Gas, 2021. [Online]. Available through <www.britishgas.co.uk/home-services/boilers-
and-heating.html >
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