Impact of Globalization on Business

The assignment discusses the importance of globalization in business, citing factors such as technology, communication, open markets, competition, economics, environment, and world demand. It also identifies various barriers to globalization, including managerial, market-based, and environmental challenges. The report concludes by emphasizing the need for strategic planning to overcome these obstacles and achieve success in a globalized business environment.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Cost, market, environment and competition that drive global commerce and trade of an
organization.................................................................................................................................3
TASK 2............................................................................................................................................5
P2 complexity of strategic challenges faced by the organization...............................................5
TASK 3............................................................................................................................................6
P3 Impact of globalization on Organization's:............................................................................6
P4 Influences of Ethical and Sustainable Globalization Organization's
functions:....................................................................................................................................7
TASK 4............................................................................................................................................8
P5 Different ways in organization's decision making can work effectively in a
global context:............................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The global business environment can be defined as the environment in different countries
with factors affecting the home environment of the organization, influencing their decision
making on resource use and capabilities of them.
In the present report, a detailed explanation of global business environment has been
discussed. It will cover key factors that drive global commerce and trade of Small-Medium
Enterprise's in United Kingdom and also includes driving factors of globalization. It will also
focus on the significant impact of digital technology upon globalization and its challenges and
will provide recommendations on how to overcome these challenges.
TASK 1
P1 Cost, market, environment and competition that drive global commerce and trade of an
organisation
Globalization is a process or trend of interaction between different companies or
organization on a worldwide scale. It is not inevitable. From economical point of view, it
involves goods and services, and the economic resources of capital, technology, and data.
It can be divided into three parts, economical, cultural and political globalization.
Economical globalization refers to the increase in economics of the country across worldwide. In
cultural globalization, transfer of different ideas and values in the world to increase, extend and
intensify social relations among people. While in political globalization, political aspects of the
countries are included which can affect globalization.
Over past few years, the relative success of globalization is evident in terms of increased
foreign trade and capital flows, acceleration of growth rates and rising per capital GDP in
countries that has open up their economies to world (Adekola, A. and Sergi, B.S. 2016).
There are several factors which drive globalization process. For Example: technology,
communication, commuting, open markets, competition, economics drive, environment and
world demands.Technology: Technology plays a very important role in the globalization. Faster
and cheaper technology in the digital global economy of the Internet era has helped a lot to break
national barriers of time and space.Communication: This is the only way through which an
organization can communicate with or companies. It should be done in proper manner to
maintain the relationship.Competition: In today's world, there is competition to establish

business in the market. It becomes very difficult task for everyone to successfully establish its
company
 Economic factors: An economic factor affects globalization in many ways. The cost of
goods and values to end user will determine the movement of goods and value addition.
The overall economics of a particular industry is an important factor in globalization.
This will justify success of the business in the market, for example whether he is in profit
or loss can also be predicted from this (Beck, U. 2018).
 Open market and globalization: Globalization process makes process of selling goods
and services very comfortable the without any hassle to different organization.
Globalization and opening markets in developing countries has helped industries to offer
the best quality product in affordable prices which can be highly beneficial for global
consumers.Environment: The increase in globalization process and how it affecting the
environment has been a major global concern among countries. It has both positive and
negative environmental impacts, and the challenge is to establish governance systems
which can help to minimize negative impact and maximize positive impact of
globalization. Environmental governmental rules and regulations have to be required at
local, national, regional and global levels to correct market failures related to the
environment.
In the context of globalization, PESTLE Analysis examines a company's targeted market issues
such as their political, economic, social, technological, environmental and legal dimensions in
terms of both its current situation and its future possible trends. Understanding of different
factors of PESTLE will help an organization to do their trading more efficiently. Factors that
favor globalization can lead to a higher level of imports which leads to globalization (Caiazza,
R., Shimizu, K. and Yoshikawa, T. 2017). There are number of factors which are responsible in
the overall globalization process such as costs, market, competition, classification of pull and
push drive, etc.
 Costs Factors: Costs factors favor the globalization process. In this process, there is a
huge scope of large-scale and large-scope economies. This provides high opportunities
and favorable logistics to an organization.Market: It is the most important part of
globalization. From the market research, the company can understand different customer
needs and requirements, global customer needs, various global channels available for

them, different marketing approaches etc. Competition: It is that process which helps the
organization to work more effectively in order to stay in the market as there is a lot of
competition arising in the small-medium enterprise or SME
 Pull and Push drive Factors: These motivate the companies to go global and can be
classified as pull forces and push factors. The pull factor helps the company to pull back
their business from foreign market while in push factor, it encourages the company to go
international and do their business globally (Cavusgil, S.T. and et-al 2014).
TASK 2
P2 complexity of strategic challenges faced by the organization
In globalization, there are many issues which are faced by the company. These challenges
include strategies (cost leadership, focus and differentiation), corporate structures, value chain
analysis, and supply chain analysis and ethical and governance of different countries.
These factors affect the company in several ways described as below: Strategies: In this factor,
different strategies on cost leadership focus and differentiation is included. Before treading any
material of the company to other countries, planning a good strategy is a necessary thing.
 Corporate Structure: It is very important for a company to understand the corporate
structure of the organization or country they are dealing with. This will help to
understand their rules and regulations in a better way.
 Value Chain Analysis: It is a process which is used to analyze the ability to create the
possible values for the customers.
 Supply Chain Analysis: It is a system in which organizations, people, activities,
information, and resources are involved in trading a product or service from supplier to
customer from different countries.
 Ethical and Governance: There are many factors which are included in this such as
different ethical regulations and governmental rules of a particular country in which the
organization is trading their business with. They have to follow all of their rules and
regulations (Gaspar, J. and et-al 2016).
TASK 3
P3 Impact of globalisation on Organisation's:
There is a great impact of globalization on various factors of the organization such as, it
affects the leadership, structure, culture and functions of the company. It also has a great impact

on the organization's governance as well. As globalization has become more relevant now-a-
days, company has to deal with increased cultural diversity within the workforce of the
organization. To overcome these issues, it requires understanding on how to deal with these
impacts. This can be achieved by small and large businesses to adopt new policies and guidelines
for workers within the organization. For every employee in the organization, maintaining a
cultural, religious and ethnic diversity in the workplace is very important in order to protect their
company.
The globalization process has influenced the normal business and organization’s
operations with other industries or companies being forced to adjust with the changes in order to
remain relevant and profitable in the current global markets. Effect of globalization on culture of
the organization can be explained as the factors which is used to maintain the workplace's
environment and their self esteem as well. Its very important for the employee to feel good and
happy while working for the organization to give its 100% in the work. There may be many
changes which can appear in front of the company to follow in order to deal with other
organization in different country. This will help them to promote their goods and services
globally across the world (Hamilton, L. and Webster, P. 2015).
Similarly, it also affects the organizational structure in many aspects. Organizational
structure is a very complex issue in the company. It is explained in the terms of how the
organization is dealing with different departments, functions to accomplish their target. There are
various aspects which are included in the organizational structure and globalization for example,
planning and strategies. This is the most crucial step in globally trading something to different
countries. What are the requirements and needs of the organization has to be thoroughly
understood by the employees and members. This will help them to build their relationship
stronger and stronger and will help them to become popular in their field (Losonc, A. 2016).
Another factors which should also be keep in mind by the organization is the Leadership
strategy, in which proper guidance should be available to the members in order to work
effectively. This will help to generate good revenue and profits for them. Effect of globalization
on culture of the organization can be explained as the factors responsible for the changes
occurring in the functioning of the organization. For example, if the company wants to export
their raw material to another company, firstly they need to interact with each other in order to
understand each others needs and requirements and this can lead to some changes in the

organization such as they can have to work for longer time which can increase their working
hours per day. This can have a negative impact on the employees of the organization.
P4 Influences of Ethical and Sustainable Globalization Organization's
functions:
There are many factors arise due to globalization process which affects the ethical and
sustainability of the organization. Business ethics can be explained as a form of applied ethics or
professional ethics that examines ethical principles and moral or ethical problems that arise in a
business environment. For example, if the company is selling its goods and services their clients
of different country. They should ensure that they are not hurting the ethical values of the
business like giving proper and true information of the material they are selling to them which
can include pricing, material, etc. Company should make sure that they are respecting their rules
and regulation and not offending any member of the organization. Another point is that an ethical
attitude helps the management in making better decisions for the organization. Ethics and profits
go hand in hand. Company which is inspired by ethical conduct is also a profitable one. This
practice can lead to establish their business more effectively in that market, which will help them
to expand their business in the coming years. This will increase their bonding with other
countries organizations as well (Meyer, E. 2014).
Sustainable globalization represents a fundamental process of transformation showing
how people approaching their business in the global world. To become sustainable in the
respected market, organization has to increase their promoting skills in the market. Different
promoting campaigning can be opted by the company to sell their products and services. They
have to offer some discount in order to get more orders from the clients. Company has to
increase the quality of their work to gain profit in the business and can make good revenue in the
end. Sustainable development has the opportunity for the company to refresh and maintain the
global economic balance for the future. Sustainable development is mainly aimed at the needs of
present without compromising the ability of future generations to meet their needs. The
sustainability of globalization can vary for all nations. Some countries can experience an
improved local environment as a result of the globalization process whereas others can
experience a deteriorating environment (Peng, M.W. 2016).

TASK 4
P5 Different ways in organization's decision making can work effectively in a
global context:
Decision making is a very important part in the organization which has to be fulfill by the
members of it. This step is important because it can help the company to make different plans
and strategies which can be beneficiary for them to increases their business globally. This will
make sure to increase their customers and will promote the organizations name worldwide in
positive way. Decisions are made at every level of management to ensure organizational or
business goals are achieved by the employees. Decision making is considered as the backbone
for the business management because without taking the right decision at right time, nothing can
be performed right in the organization. While doing business with other country, various
decisions have been made by the company for example, will it be profitable for them to do
business with other clients, what will be the positive and negative impacts of that. There are
many factors which can help the organization to improve their decision making skills (Pieterse,
J.N. 2015).
 Proper utilization of resources : Organization has various resources which they can use
such as man power, money, method, material, machine, market and information. All
these resources should be properly utilized without any wastage with the help of applying
decision at the right time. As a result, organization can operate at a minimum cost and
can generate more profit margin.
 Selecting the best alternative : In this method, its very important for the management
department to smartly utilize their best options to promote their services. Decision
making will help the organization to select the best option among various available
alternatives by analyzing them using financial, statistical, and accounting tools and
techniques.
 Employees motivation : Decision making helps to motivate the workers to work hard for
the company. It provides an overall framework of operation and guideline to the
operating level of staffs.
 Achievement of goal/ objectives : It is important to achieve the organizational goals or
objectives within the given time period and available budget. It helps to get the best
alternative, utilize the resources properly and satisfy the employees at the workplace. As

a result, organizational goal or objectives can be achieved as per the desired result which
is very good for the organization to make his brand name in the market (Wirtz, J.,
Tuzovic, S. and Ehret, M. 2015).
Various steps which can help the organization in the process of decision making can be
explained as follows,
 Identification of problem : This is the initial step in the decision making process. In this
management tries to identify the problem in the organization.
 Analysis of problem : After identifying the problem it the time to analysis it properly.
And identify the reason of that problem.
 Developing an alternative course of action : After analyzing the problem thoroughly,
management will try to make some alternative plans or strategies to solve the issue.
 Selecting the best alternative : From various alternatives, selecting the best one is the
main objective of the team which can help them to minimize the issue as much as
possible.
 Implementation of decision : Implementation of the decision is very important part as
this will suggest the success of the plan.
 Review of decision :
P6 Various routes to Internationalisation for the organization
including key barriers:
Companies entering into foreign markets can face problems because of the business
environment and the way in which companies operate, for example, marketing services might be
prohibitively expensive. There are various factors which contribute in the enhancement of the
organization, they are described as follows,
 Growth motives : The growth opportunities associated with international markets is
identified as a key tool for the internationalization of the organization. Growth
opportunities in other markets and increase profits from international opportunities have
been identified as an important aspect for exports.
 Knowledge-related Motives : From the internationalization of the organization,
knowledge improvement is very important. It helps to motivate employees. Knowledge
assets both push and pull small and medium-sized enterprises into international markets
(Top three potential barriers to foreign market entry. 2016).

There is number of barriers present for the Internationalization of the organization
which includes,
 Financial Barriers : In this barrier, limitation of budget and physical resources are
included which can be a huge barrier for the organization to work. For SMEs to grow,
they should get more resources, yet due to their original smaller size this is not an easy
task.
 Managerial Barriers : Difficulties arising from limited management knowledge base are
presented as a top barrier to small and medium-sized enterprise's internationalization in a
number of recent surveys. These barriers include factors like managerial attitudes, lack of
international experience and skills, limited time management, commitment, and
partnership difficulties.
 Market based Barriers : The lack of knowledge of foreign markets is also emerging as a
major barrier for the Internationalization of the organization.
CONCLUSION
Above report concludes that global business environment is a huge demand in any
organization to expand their business internationally. In this report it explains various factors
which affects the company's overall functionality due to globalization process. Various factors
affecting globalization process such as technology,
communication, open markets, competition, economics
factors, environment and world demand has also been explained in it. Other elements like cost,
market, environment, pull and push drive factors has also helped the organization to build
international relationship with other companies worldwide. In the end, this report helps to
understand the importance and impacts of globalization on the overall growth of the organization
by explaining various challenges of globalization and the strategic to overcome such challenges
in the future.

REFERENCES
Books and Journals
Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Beck, U., 2018. What is globalization?. John Wiley & Sons.
Caiazza, R., Shimizu, K. and Yoshikawa, T., 2017. Cross‐border M&A: Challenges and
opportunities in global business environment. Thunderbird International Business Review.
59(2). pp.147-151.
Cavusgil, S.T. And et-al 2014. International business. Pearson Australia.
Gaspar, J. and et-al 2016. Introduction to global business: Understanding the international
environment & global business functions. Nelson Education.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Losonc, A., 2016. Global inequality: A new approach for the age of globalization.
Panoeconomicus. 63(4). p.493.
Meyer, E., 2014. The culture map: Breaking through the invisible boundaries of global business.
PublicAffairs.
Peng, M.W., 2016. Global business. Cengage learning.
Pieterse, J.N., 2015. Globalization and culture: Global mélange. Rowman & Littlefield.
Steger, M.B., 2017. Globalization: A very short introduction (Vol. 86). Oxford University Press.
Wirtz, J., Tuzovic, S. and Ehret, M., 2015. Global business services: Increasing specialization
and integration of the world economy as drivers of economic growth. Journal of Service
Management. 26(4). pp.565-587.
Online
Top three potential barriers to foreign market entry. 2016. Available through:
<http://www.tradeready.ca/2014/fittskills-refresher/barriers-foreign-market-entry/>