International Business Environment Analysis

This assignment requires a thorough examination of the international business environment. Students must analyze various factors influencing global business operations, including cultural dimensions, legal and regulatory landscapes, economic trends, technological advancements, and ethical considerations. The analysis should demonstrate an understanding of how these elements interact and impact businesses operating in a global context.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Key factors of cost, market, environment and competition that drive global commerce and
trade.............................................................................................................................................1
TASK 2............................................................................................................................................3
P2.Complexity of strategic challenges faced by organisation operating in global environment 3
TASK 3............................................................................................................................................3
P3. Influence of globalisation on organisational governance, leadership, structure, culture and
functions .....................................................................................................................................3
P4. Influences of ethical and sustainable globalisation ..............................................................3
TASK 4............................................................................................................................................4
P5. Different ways in decision making ......................................................................................4
P6. Articulate different routes to internationalisation adopted by organisation .........................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................4

INTRODUCTION
The global business environment refers to the internal and external environment of the
organisation system. It consist of several factors that have direct impact on the decision making
process. It is the responsibility of management to examine all these elements properly in order to
carry out the overall function in effective manner. Modern time consist of different type and
nature of organisation that form the part of global business environment. The company selected
in their report is John Lewis, which is a retail public limited company situated in London. There
are around 50 stores that are located in Scotland, Wales and England. This report throws light on
key factors which drives global commerce and trade, influence of globalisation as well as
different ways of decision making. Apart from it, there are several routes to internationalisation
of an organisation that form the important part of globalisation concept.
TASK 1
P1. Key factors of cost, market, environment and competition that drive global commerce and
trade
Every business organisation have to operate in dynamic business environment which
keep son changing in time. Thus, it is necessary for the companies to work accordingly in order
to keep in pace with these changes. The globalisation is a broader concept that involve number of
transactions related to finance, communication and finance. There are number of changes that
have to be implemented in response to the this process. Its impact can be classified into two parts
that include, production and market globalisation. Product globalisation refers to the process that
involve sourcing of goods, raw materials from one nation to another in order to gain high
outcome and profit on the other hand market globalisation is a procedure that include reduction
of barriers that come across while performing selling function within diverse countries
(Cantwell, Dunning, and Lundan, 2010).
Moreover, globalisation allow John Lewis to established sustainable image and goodwill
in market place as well as facilitate them to earn high sales volume and profits. They can go for
joint venture and merger that helps them to expand their current business operations and
transactions across the world. There are numerous factor that impact the global traders and
commercialisation that are discussed below:
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Cost: It is the amount that haws to be incurred by any business organisation whole
performing functions of marketing, production, promotion and other activities (Werther Jr and
Chandler, 2010). Thus it involve expenditure of finance from the company to carry out that
process in effective way. Cost is also involved in other area of manufacturing, transportation and
updating of value of products. It can be further divided into two parts:
 Direct Cost: It is the price amount that is related to production of goods and services. It is
related to one cost object. It include cost faced by company incurred on sand, cement and
gravel.
 Indirect Cost: This type of cost cannot be linked with some certain cost objects. There are
number of functions that has to be performed in day to day operations related to supply
are consider under indirect cost.
Market: It is the place where buyers and producers meet to carry out the exchange
process. It consist of several parties that include wholesalers, traders, producers, that play
different role in the market place. It get largely impacted by demand and supply process of
products and goods. It involve some elements of market that are discussed below:
 Market related to raw materials: Every company require raw materials to produce
finished products. There are diverse type of raw materials that has to be traded over world
wide (Cavusgil and et. al, 2014).
 Labour Markets: this market is for the individuals that are looking for employment in
various places across the countries. UK have number of employment opportunities that
attract number of prospective people to gain advantage for the same.
Environment: Business environment have a huge influence on functioning of the
company. Thus, it is the duty of management to perform environment scanning and take
decisions accordingly.
 Political factors: This pose a huge impact on the organisational system in several ways
that may have positive and negative influences. It include customer's purchasing power,
taxes related to corporation, custom duties and many more. On the other hand
government draft several laws, regulations, rules, policies that have to be adopted by the
company to run it in successful manner.
 Economic Factors: It consist of exchange, inflation, deflation, current economic
conditions prevailing in current market place. All these aspects pose high impact on the
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overall structure of the company. John Lewis get impacted by the aspects related to
fashion industry.
 Social Factors: The company have to focus upon nature of society in which they are
operating. As John Lewis operates in home, electrical, fashion, technological products
hence they have to consider preferences, demand of customers and than produce goods
accordingly (Colfax, Rivera and Perez, 2010).
 Technological Factors: John lewis deals in technology products, therefore it is important
for them to work according to the current technology factors so that company can
perform accordance to the need and demands.
TASK 2
P2.Complexity of strategic challenges faced by organisation operating in global environment
In modern era, businesses have to face different type of challenges, issues that may come
across in their functioning and that can impact the working in many ways. Strategic challenges
can create some threats, opportunities that influence the decision making process. Globalisation
lead to increase in complexities and difficulties for the organisation system as there are many
changes that has to be incorporated in the system. Thus, there is rise of several types of risks that
has to be managed properly so that it could not hinder the overall performance of the
management. There are barriers that have to be faced by the organisation that may hinder their
performance (Trompenaars and Hampden-Turner, 2011). Some components that result in
increase of complexity due to globalisation process are discussed below:
 Change in Innovation Process
 Rules and regulations created by government sector
 Information management system
 Many variations in complexity process
There are certain challenges that have to be incurred by organisation system that are discussed
below:
 Difference in culture and communication process: It is the most important aspect that has
to be consider in performing expansion of the business organisation. There are several
levels that are present in single organisation system and perform communication system
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in effective manner thus, managers ensure that function must be carried out in adequate
way so that overall functioning must be performed in efficient manner. There is another
concept of cultural difference that involve diverse culture that are present in areas and
has major impact on the organisational system. Hence, John Lewis have to perform
market research in order to gather the important information related to demands, need of
the customers and than take decision regarding expansion of the current business. It is the
primary duty to full fill demands of the customers so that they can be retained for longer
period of time (De Jonge, 2011).
 Changes is currency rates: Fluctuations in currency rates pose a huge barrier in the
company planning to expand their structure in other parts of the nation. John Lewis have
to understand overall monetary policy that is prevailing in various locations in world.
Hence, they have to frame strategies regarding employing correct system that have to be
incorporated in effective manner so that they do not face major problems.
 Laws and regulations: It is essential to consider number of laws and rules that are present
in international market so that proper functioning could take place. John lewis have to
make decisions regarding incorporation of laws and regulations so that their set targets
could be accomplished in particular time period. These rules allow company to perform
their overall work tasks in smooth manner without facing any hindrances or obstacles.
 International Structure of business organisation: When any business organisation expand
their current operations internationally than they have various opportunities to expand
and grow in sustainable manner. There are several departments that work in single
business system that include finance, marketing, human resource, operations thus, it have
to be coordinated in effective manner so that aims and objectives could be achieved in
proper time period.
 Facing political risk: Political conditions are dynamic in nature that keep on changing and
therefore create impact on the organisational system. John Lewis may face the problem in
relation to this aspect as there may be huge impact on political conditions that are
prevailing in UK. There can be situation of political instability that may pose huge threat
in front of them and there is need for risk assessment (Tarique and Schuler, 2010).
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TASK 3
P3. Influence of globalisation on organisational governance, leadership, structure, culture and
functions
The term globalisation is a premier concept that has commence in business life as a main
element. It prime impacts on economy, community, life, business as well as environment in
several ways. In this modern era, corporations ate becoming more prosperity oriented so as to
sustain for long term period in target market. Although, it also hinders organisational governance
process or practices in diverse manner especially by the strategies which it makes available on
corporate finance, production and management. Globalisation promotes effective and efficient
utilisation of available resources in larger economy as well as the company. It also ensure that
firms are in compliance with laws and legislations. Assists corporations and economies in
attracting lower-cost investment capital by improving both domestic and international investor
confidence that assets will be used as agreed (Ferraro and Briody, 2017).
Governance: Before some time, living standard of people has been improved and this can
be only done by controlling or governing working activities in the best possible manner. Thus, to
maintain its corporate governance, Lewis provide training and development assistance to its
employees as they can manage all practices effectively.
Organisational culture: Organisational cultural insists with a set of ideologies, opinions,
symbols, values etc. which can affect its activities while meeting business objectives. Basically,
its a formal framework in which a company operates by using necessary policies or strategies.
John Lewis is currently operating over the globe and always thinks to extend its business in other
areas with an aim of raising profitability. When, a firm wants to spread its business activities
then it should manage organisational cultural in which people can easily communicate with
higher authorities. Therefore, formulating an effective organisational structure assists companies
to accomplish their goals and objectives.
Leadership: leaders or managers are consider building blocks of the organisation that
guide the team members in correct direction so that final aims and objectives can be
accomplished in prospective manner. Globalisation pose a huge impact open the leadership
styles that are present in organisation system (Simic and Dimitrijevic, 2012). There are main
objectives that have to be fulfilled by the leaders that include motivate their staff members so
that they can able to perform at best of their level and produce maximum outputs for the
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organisational system. There are continuous changes that occur in the business environment
therefore, they have to adapt these alterations in proper manner (Peng, 2016). Thus, John Lewis
have to introduce proper leadership style in to their system so that final goals can be achieved in
proper mode. Leaders should possess influential behaviour so that workers get motivated to
perform work task in accurate mode in order to achieve positive results. Globalisation process
allow integration of different techniques and forces so that whole structure can be modified
accordingly.
P4. Influences of ethical and sustainable globalisation
The globalisation process results into combination of economic, regional culture with the
help of effective trade, transport and communication system. It involve several processes that
include integration of local economic system with foreign or international economies in order to
gain high competitive image. Ethical and sustainable globalisation process will assists companies
to adopt various opportunities, increase their financial strength and customer's satisfaction level.
On the other hand, it also results in improving the the overall image by increasing their
standards, quality of working structure so that all risks can be faced in effectual way. John Lewis
is a retail industry that offer large number of products of different variety to their customers that
are located in several places all over the nation. It may be difficult for the company to have
proper management of various ethical aspects related to business sustainability.
For example: if any particular nation alter their trading related activities that allow clients
to conduct the free flow of capital so that migration process can be conducted smoothly and
easily (Gecevska and et. al, 2010).
There are some key areas that can be affected by ethics and sustainable organisation which are
discussed below:
 Healthy working environment: this is a major part that is included in ethical consideration
as it is the prime duty of the management to pay proper attention on the health of the
employees that are working there. For instance: in production department of John lewis
involve usage of some harmful substances that may cause health issues thus, company
have to make proper guidelines regarding it so that employees can work in safe and
secure environment.
 Minimize various financial liabilities: In order to operate internationally it is important
for the John lewis to draft such policies that minimize its financial liabilities and increase
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the assets so that prospective outcomes can be accomplished. If the liabilities get increase
due to several reasons that it may lead to increase in unethical actions and reduce their
image in market place (Louhiala-Salminen and Kankaanranta, 2011).
 Consequence on recruitment and selection function: several company have to conduct
these functions while adopting number of legal actions. Management must concentrate on
hiring only prospective and skilful employees so that their personal objectives can be
aligned with organisation's aims in order to reach ultimate destination. John lewis have
prospective team that draft particular policies and procedures that totally concentrates on
defining various legal actions and procedures so that recruitment function can be
structured. Company also follow rules related to child labour.
 Gaining customer's interest: John Lewis is expanding their current market place in
various part of world. Thus, it is their responsibility to work in accordance to ethical
organisational culture at market place. Customers are consider important assets for them
thus it is necessary to satisfy their demands in proper manner. In order to carry out this
transaction they perform several marketing campaigns that influence the customer's mind.
Form the above discussion it can be concluded that business organisations have to fulfil
various ethical duties to run their structure in smooth manner ( Wild and Han, 2014).
TASK 4
P5. Different ways in decision making
When any company or business organisation decided to expand their current business in
several parts of the country all over the world, than it is important to make decisions related to
several key areas. There are number of filed that require proper decision making process like
target market, farming of number of strategies, strengths and other areas. Hence, management
system have to frame proper plans so that future goals can be accomplished (Hamilton and
Webster, 2015). There are important ways that require focus of decision making process, that are
discussed below:
 Allocating the issue: Managers have to find out the areas and issues that require proper
attention that is directly related to expansion of current business organisation. Hence,
management have to frame proper plan of actions in order to identify the crucial areas
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and than take decisions accordingly. There are several conditions that are very crucial and
important and has to be addressed in correct time period (Laudon and Laudon, 2015).
 Find out the solutions: After the examination of the issue, the next step involve locating
the steps that lead to solve the challenges. The other aspect include that all decisions must
be taken that do not hinder the overall profit and sales of the company. It is the duty of
higher level of management to find out the solutions in relation to specific problems.
 Execute the determined solution: it is the duty of management to implement the set
solution in practical manner to the overall system so that every individual work according
to the set rules and provide them proper path that lead them to achieve final goals and
objectives. Various problems have different solutions that has to be consider by the
management system in response to that particular situation or condition.
 Monitoring and Evaluation: This is the last step that include monitoring the applied rules
and regulations in the management. The standard performance is set and than actual
performance is measured so that deviations can be find out if it is there. After this, the
reason is find out that lead to the occurrence of that problem so that proper actions can be
taken in accurate way. As there are different departments that are present in single
business organisation and hence, it is the responsibility of the managers to monitor and
evaluate the final results and make sure that it is directly linked with the ultimate
objectives (Kasemsap, 2014).
P6. Articulate different routes to internationalisation adopted by organisation
There are number of business organisations that have to be expanded in international
market after the globalisation process. But, there are number of obstacles that have to be faced by
John Lewis in regarding to this aspect. There are several options that lead to different routes that
need internationalisation and thus have to make proper decisions regarding it. It is the
responsibility of the management level to choose the best possible options that will result into
earning of high and optimum results. There are number of advantages and disadvantages
associated with each and every option hence, it is required to evaluate such options in conducive
manner. Some options that are available for internationalisation routes that are discussed below:
 Strategic Alliances: It is the process that involve the agreement that occur between two or
more business organisations that is based upon certain criteria and goals. This occur
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between two companies so that both get benefited from each other in number of ways
that include their assets, key areas and many more. Thus, John lewis can opt for this
option as they can earn long term benefits or outcomes.
 Joint Ventures: This refers to the newly established company that owns some part of
other business. There are number of benefits that chooses this option as there are number
of benefits associated with it. Similarly, John lewis can enjoy access to new technology
 Licensing: It involve taking permission by the company to produce particular goods and
products in the sake of organisation's name. John Lewis can expand their business by
choosing this options as their entry mode. The main benefit associated with this mode
include reduction of expenses related to expansion overseas.
From the above discussion, it can be concluded that John Lewis can opt for any of the
option for entry mode that will lead to earn them high profits and outcomes in set time period.
There are number of issues associated with this aspect, that are discussed below:
 Legal related problems: there are number of rules and regulations that have to be
implemented by the company in order to increase their overall performance so that final
set objectives can be achieved. This aspect in very important to be consider by company
expanding their operations and carnations as different countries have diverse rules that
need to be incorporated by them in proper way.
 Corruption problems: there are several countries that face issues related to corruption.
Thus, it may hinder the overall performance of the organisational system in several ways.
Therefore, it need to be consider by the company before entering into particular market
place.
All the discussed problems and issues can restrict the overall functioning of the
organisational system thus, management have to take necessary steps in order to eliminate
barriers.
CONCLUSION
From the above prepared report it can be concluded that globalisation is a broad scope
that pose huge impact on various areas of the organisation system. It involve carrying out several
important functions related to appearance, integration and development of global markets that
lead to improvement in economical conditions. This report highlights the case of John Lewis that
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is a retail company operating in number of locations across the world. There are number of
factors like market, environment that enhance the global trade. Apart from it, there are several
mode of entry that has to be selected by company to expand their current business in effective
manner.
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REFERENCES
Books and Journals
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understanding international business activity: The co-evolution of MNEs and the
institutional environment. Journal of International Business Studies. 41(4). pp.567-586.
Cavusgil, S. T., and et. al., 2014. International business. Pearson Australia.
Colfax, R. S., Rivera, J. J. and Perez, K. T., 2010. Applying emotional intelligence (EQ-I) in the
workplace: Vital to global business success. Journal of International Business Research.
9. p.89.
De Jonge, A., 2011. Transnational corporations and international law: accountability in the
global business environment. Edward Elgar Publishing.
Ferraro, G. P. and Briody, E. K., 2017. The cultural dimension of global business. Taylor &
Francis.
Gecevska, V., and et. al., 2010. Product lifecycle management through innovative and
competitive business environment. Journal of Industrial Engineering and Management.
3(2). pp.323-336.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Kasemsap, K., 2014. The role of social networking in global business environments. Impact of
emerging digital technologies on leadership in global business. pp.183-201.
Laudon, K. C. and Laudon, J. P., 2015. Management Information Systems: Managing the Digital
Firm Plus MyMISLab with Pearson eText--Access Card Package. Prentice Hall Press.
Louhiala-Salminen, L. and Kankaanranta, A., 2011. Professional communication in a global
business context: The notion of global communicative competence. IEEE Transactions
on professional communication. 54(3). pp.244-262.
Peng, M. W., 2016. Global business. Cengage learning.
Simic, V. and Dimitrijevic, B., 2012. Production planning for vehicle recycling factories in the
EU legislative and global business environments. Resources, Conservation and
Recycling. 60. pp.78-88.
Tarique, I. and Schuler, R.S., 2010. Global talent management: Literature review, integrative
framework, and suggestions for further research. Journal of world business. 45(2).
pp.122-133.
Trompenaars, F. and Hampden-Turner, C., 2011. Riding the waves of culture: Understanding
diversity in global business. Nicholas Brealey Publishing.
Werther Jr, W. B. and Chandler, D., 2010. Strategic corporate social responsibility: Stakeholders
in a global environment. Sage publications.
Wild, J. J ., Wild, K. L. and Han, J. C., 2014. International business. Pearson Education Limited.
Online
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