Globalization and Business Impact

This assignment explores the multifaceted effects of globalization on businesses and societies worldwide. It delves into the creation of global value chains, examines the challenges and opportunities presented by international expansion, and analyzes the ethical and sustainability implications of doing business in a globalized world. The goal is to understand how globalization shapes business practices and influences both company success and societal well-being.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Key factors of cost, market, environment and competition for global commerce and.....1
Trade.......................................................................................................................................1
M1 Impact of key factors on business in terms of benefits and challenges...........................3
TASK 2............................................................................................................................................3
P2 Complexity of strategic challenges when operating in global business environment.......3
Environmental Impact............................................................................................................4
M2 Analysis of strategic challenge in relation of risk and diversification.............................5
D1 Evaluation of Global Business Environment and various challenges and benefits faced by
the...........................................................................................................................................5
Organizations..........................................................................................................................5
TASK 3............................................................................................................................................6
P3 Influence of globalisation on Dutton Engineering's governance, structure, culture and
function...................................................................................................................................6
M3 Evaluation of various Global Market influences on organisational
structure and
culture.....................................................................................................................................6
TASK 4............................................................................................................................................7
P4 Influence of Ethical and sustainable Globalisation...........................................................7
M4 Evaluation of Various barriers of Globalisation..............................................................7
D1 Strategies that can be adopted by organizations for going global....................................8
TASK 5............................................................................................................................................9
P5 Different ways of decision making within an organization to work effectively at globalised
................................................................................................................................................9
Level.......................................................................................................................................9
P6 Various routes to internationalisation with key barriers.................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Companies around the world is growing their businesses beyond the boundaries of their
domestic country and are reaching worldwide, this has been the case with most of businesses
around the world. It is quite crucial that company understand the importance of going global, it
give business and edge as company, will be able to tap a larger customer base of different taste
and preferences, which might help company in boosting its sales and profitability over a longer
period of time. When a company starts to do business, it becomes important for it to do expand
globally so that the business can go beyond a point and the company can increase its customer
base, profitability and productivity (Axelrod and VanDeveer Eds., 2014). If a business decides to
go global it will have make sure that it carries enough resources to deal with various challenges
that will come across in the process. Dutton Engineering Ltd. is a mid size company which is
engaged in the business of manufacturing in Bedfordshire, UK. The company provides its
products and services to mostly European industry and is having almost no experience as of now,
to operate on a global level. But the management of the company is quite committed to take its
business outside UK to expand it Further.
TASK1
P1 Key factors of cost, market, environment and competition for global commerce and
Trade.
There are various factors which plays a very important role in Global business
environment these factors can be cost of operations, the nature of market, Political and other
legal environment, Extent of Competition etc. These factors are discussed in detail as follows : Competition : When a company decides to operate on a global level, it has to consider
various factors that may affect its business, both positively as well as negatively. One of
the main factor is competition that prevails in the market, in which the company is
prospecting to operate in the future (Bocken, and et.al., 2013). Therefore, Dutton
Engineering will have to analyse the level of competition that prevails in the markets of
North America, Africa as well as Asia. It should also analyse what are the key and
important drivers of competition in those regions. For example, Dutton engineering is
engaged in the business of manufacturing steel products and providing services of cutting
Steel and other stuffs with the use of laser lights. The company should analyse which
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companies are providing these kind of facilities in the region and whether that
competition is harmful for company's Growth and Existence in that particular market.
The level of competition will decide the pricing of products and eventually impact the
profitability of company.
 Cost: Another element which is very crucial for organization to identify before operating
in a different country is the cost structure that will be incurred by the company, if it
decide to operate on a global level and it would include the cost of operations, cost of
labour and cost of other essentials of business like marketing, advertising cost etc. It is
thus quite important that an organization takes care of the cost that may be involved in
doing business in a different country than domestic country.
(Source: The impact of Globalisation on organization,
http://lucille-ossai.blogspot.in/2012/04/the-impact-of-globalisation-on-
new.html#axzz5CSBKSktM) Market: There are different types of Market in different countries around the world,
There is not only a single type of market everywhere. North America is a developed
region and is having lot of competition from various players (Caligiuri and Tarique,
2012). It is very important that businesses should analyse the type of market before
venturing into it, Dutton engineering should judge the markets, and know its type
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Illustration 1: Impact of Globalisation

whether it is Monopoly, oligopoly market etc. What is the behaviour of consumer there,
and how they can be attracted towards products of company.
 Environment : It includes all the macro factors of the environment that may have a direct
or indirect impact on the working of company. This includes a PESTLE analysis of the
environment well before entering into the market so that the effect of these factors on
business can be judged effectively and more appropriately. Some of the important macro
factors would be Political and legal turmoil which may be existing there. Hence it is a
crucial part of Environmental analysis by the company before getting into business.
M1 Impact of key factors on business in terms of benefits and challenges
Operating on a Global Level comes up with new Benefits as well as challenges for
company. It is important that organization makes up a necessary plan and procedures to get the
maximum possible benefits and resist as well as overcome the challenges that prevails within the
economy. Various benefits and challenges of operating at global level are discussed as below :
 The primary benefit that a company gets by going global is increase in the overall
customer base and penetration into new and diversified markets (Chadee and Roxas,
2013). Dutton Engineering provides products related to steel and consumption of steel is
quite high in North American countries, therefore it would be able to tap customer very
easily and conveniently. The challenge in front of the company would be to make up a
place in these markets by competing against already established players, and at the same
time maintains profitability and growth of the company.
 Yet another challenge that Dutton Engineering can face is that there is different types of
consumers in the market based on the kind of culture that prevails within the nation
(Cohen and Kietzmann, 2014). Like consumers of North American people would not
compromise on the front of quality, but such is not the case with African and Asian
consumers, they are price sensitive consumers and may get affected by the kind of
pricing policy that a company follows.
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TASK 2
P2 Complexity of strategic challenges when operating in global business environment
A company faces many strategic challenges while framing a policy for taking business on
a global level, the strategic challenges may involve deciding the extent of operations to be
established, Supply chain management policy, whether to enter in market through own outlets or
on Franchisee basis etc. Some of the main strategic challenges are discussed in detail as follows :
Compliance and Regulations
Every company have to follow the rules and regulations of the land in which it is
operating. The company should comprehend and take after different guidelines and controls that
represent its products and enterprises. It should consent to the duty laws of various nations and
also statutory fare directions. A few nations have strict approaches about the sorts of business
Procedures permitted in their nations that frequently incorporate human asset and annuity
limitations and tenets on the off chance that company hire an outside workforce.
Culture and Language
When a company enters a country other than its domestic country, it have to face various
cultural and languages barriers (Ferraro and Briody, 2013). The new country might not be having
same kind of view point regarding the products manufactured by Dutton Engineering and
therefore it is quite important to understand the cultural and language barriers that prevails within
different countries before setting up their plants or to start manufacturing products.
Environmental Impact
Reusing is quickly turning into a typical practice in many U.S. organizations as business
pioneers understand the effect their conduct has on worldwide ecological issues. Dutton
Engineering might be tested to fuse fruitful reusing programs since they might be taken a toll
restrictive or simply badly designed. Vitality sparing gadgets, for example, conservative glaring
lights make a scratch in world vitality utilization, yet they may not be reasonable for office.
Difficulties proliferate for designers hoping to fabricate new industrial facilities or office space.
Food, vitality and transportation organizations all face ecological Pressure on themselves to
utilize less characteristic assets and offer items made with recyclable materials.
Technological Impact
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The advancement of technology in every country is different. Usually developed country
would be having a advanced technology prevailing within the country, but such can not be the
case everywhere around the world (Gereffi and Fernandez-Stark 2016). The level of technology
will have a direct impact on the overall workings of company in general. Dutton Engineering is a
company which provides steel products and uses Modern Laser technology to Cut down steel
into various products which can be sold to Industries like Auto mobile, Capital goods etc.
M2 Analysis of strategic challenge in relation of risk and diversification
Every company be it small or big, if it want to go global have to manages diversification
and risk in a proper manner. It will have to implement various strategies related to risk
management, the risk that Dutton Engineering may have to see and manage various types of risk
like the extent of diversification, Extent of investment that needs to be made etc.
Some portion of the danger of contributing abroad is figuring out what level of an utility's
portfolio ought to be enhanced geologically, outside of the nation. Multilateral banks set up
esteem roofs for nation loaning situated to some extent on the development in those nations and
the probability of reimbursement (Kardes and et.al., 2013). Yet, there is no rigid lead for such
broadening for financial specialist claimed utilities. Without a doubt, investors and other value
partners may push an organization abroad for higher returns, in spite of higher hazard. Some
other risk that an organization should consider are :
 Political Risk
 Regulatory Risk
 Credit Risk
 Interest Rate Risk etc.
D1 Evaluation of Global Business Environment and various challenges and benefits faced by the
Organizations
The Global business environment is very complex and dynamic in nature, it gets affected
by various factors like consumers, their behaviours etc. But ultimately the deciding factor is the
Uniqueness that the products of the company is having and how it fulfils the demand as well as
needs of consumers in the longer run (Kirton and Trebilcock, 2017). If a company is able to
attract and retain global consumers with itself by offering high quality of goods and services than
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growth and profitability will come by its own. The various benefits and challenges of
Globalisation is described as below :
Benefits
 A company is able to trade freely and tap consumers of different nation which would
allow them to grow economically and financially.
 Creation of Brand Image and Enhancement of Reputation for the firm on Global Level. New Market Penetration.
Challenges
 Different users as well as consumers with different mindsets and hence variation in
demand.
 Change in Business Environment has a very crucial impact on overall behaviour of
companies.
TASK 3
P3 Influence of globalisation on Dutton Engineering's governance, structure, culture and function
The Globalisation usually have a wide spread effect on the workings of company and it
may see changes in its structure, governance, culture as well as function. If company goes global,
it would require lot of resources like capital, manpower, latest technology to compete on a
International level at a constant pace (Klem, 2013). Due to such requirement, a company may see
a change in its capital structure because it would need lot of funds for expansion. There will be
requirement of More skilful and talented managers to manage the company and it will influence
the Governance pattern of the company. There will be more subsidiaries in place and a separate
management structure will be needed for the same. As a company goes global it have to employ
workforce from different countries, who speaks different languages and follows various
religions, within the organization, and it has a direct impact on the Culture of organization. It is
thus very essential that Dutton Engineering takes care of all these aspects before investing
heavily in any processes or procedure globally. There are businesses around the world which
aims at going global and it is essential to do proper assessment and analysis before making any
commitment in terms of capital, workforce etc. Dutton Engineering is a UK based company and
it wants to expand in North America, Africa as well as Asia. The company's move to go global
will have a direct influence on various Functions of the company like Production, Inventory,
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Marketing etc. The size of these functions will going to increase and a new strategies for proper
management of them would be required for it.
M3 Evaluation of various Global Market influences on organisational
structure and
culture.
Structure of business likewise get changed in light of the fact that at nearby level not so
much changes occurred but rather with basic change in activity require more mind boggling
structure which affects employees. These elements have a direct influence on the overall working
of the company. The culture of an organization will change if a business decides to go global as
it may impact the inner culture of an organization and may compel it to change. Businesses
worldwide have been able to capture higher market share and growth by applying right kind of
strategies and theories of Organization culture (Koh, Fichman and Kraut 2012). Whatever the
theories may be, it shall have the ingredients of Loyalty, teamwork and leadership in it so that
the company can have a lsting impact on the mindsets of its customers and clients.
TASK 4
P4 Influence of Ethical and sustainable Globalisation
Globalization " Refers to the developing relationship of nations coming about because of
the expanding business on reconciliation of exchange , Finance , individuals , and thoughts in
one worldwide commercial centre. Global exchange and cross-fringe venture streams are the
principle components of this combination. It is extremely important that an organization follows
a ethical path when it tries to go global. Management of Dutton engineering should ensure that
there is proper ethical environment within the company as it extend its footprints. If a company
will exploit the resources of different countries by establishing its business there, then people of
that country would have a negative image of the company and it will not be beneficial for it
going forward. Hence if a company wants Sustainable globalisation as its business policy then it
will have to make sure that there is no Illegal acts which will be performed by company as this
may harm the image of company among customers and they will not be able to do business over
longer period of time. Business Ethics is perceived as a critical zone for exchange by both
industry and scholastics as of late. Since the term 'Ethics' can posture issues in the global setting,
i.e., the term does not make an interpretation of well without hesitation and it is hard to locate a
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typical comprehension (Liu, 2013). A few associations recast the idea of business morals through
different terms like trustworthiness, social obligation, client welfare, representative welfare,
social esteem included, straightforwardness and exposure in bookkeeping and natural assurance.
M4 Evaluation of Various barriers of Globalisation
Global exchange is the trading of merchandise and enterprises crosswise over national outskirts.
In many nations, it speaks to a critical piece of total national output (GDP). The ascent of
industrialization, globalization, and mechanical advancement has expanded the significance of
worldwide exchange, and in addition its monetary, social, and political impacts on the nations
included. Universally perceived moral practices, for example, the UN Global Compact have been
initiated to encourage shared collaboration and advantage between governments, organizations,
and open establishments. In any case, nations keep on facing challenges around moral
exchanging and business practices, particularly in regards to financial imbalances and human
rights infringement. There are various other barriers to globalisation such as :
 Tariffs
 Non – Tariffs Barriers
 Import as well as Export licences
 Subsidies
 Currency Devaluation
 Trade Restrictions Etc.
Such barriers can be overcome by management of the company, if there is a proper strategy and
policy which is being followed by them (Milne and Gray, 2013). This includes effective Macro
and Micro environmental analysis, assessment of strengths and weakness of company etc. It is
important that company is able to assess them and make necessary improvement as soon as
possible.
D1 Strategies that can be adopted by organizations for going global
There are different kinds of strategies which can be followed by a company, in order to compete
well and for this purpose it should analyse its strengths and weakness. Dutton Engineering can
choose any one of the strategy for effectively operating in the Global Environment (Swarbrooke
and Horner, 2012). Two of the Main strategies for Globalisation are Global Strategy and Multi
domestic Strategy.
Global Strategy : The Characteristics of this strategy are as follows:
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 Contending all over the place
 Valuing that achievement requests a nearness in relatively all aspects of the world
keeping in mind the end goal to contend successfully
 Making the item the same for each market
 Unified control
 Exploiting client needs and needs crosswise over worldwide fringes
 Finding their esteem including exercises where they can accomplish the best upper hand
 Coordinating and co-ordinating exercises crosswise over outskirts
A worldwide system is successful when contrasts between nations are little and rivalry is
worldwide. It has focal points regarding Economies of scale ,Lower costs ,Co-appointment of
exercises ,Quicker item advancement.
Multi Domestic Strategy
 A multi-household technique includes items customized to singular nations
 Advancement originates from neighbourhood R&D
 There is decentralization of basic leadership with in the association
 One consequence of decentralization is neighbourhood sourcing
 Reacting to neighbourhood needs is attractive however there are weaknesses: for instance
high expenses because of custom-made items and duplication crosswise over nations
TASK 5
P5 Different ways of decision making within an organization to work effectively at globalised
Level
Decision making is a very crucial aspect for Dutton Engineering to operate at a global
level, the company is having an inexperienced management and it should work hard to prove
itself on a global Level. The various ways of decision making are :
Programmed Decision Making: In business a few number of choices have increase straight
forward in nature which don't require substantially more agree to get assessed in most suitable
way. Subsequently, these choices are arranged in nature like concentrating on clients consistent
agreeable, modernization of business and its various number of exercises. In spite of the fact that,
this basic leadership is useful in nature through which supervisors winds up ready to keep up the
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working of an organization with the goal that better and powerful results could be achieve in a
suitable way.
Unprogrammed decision making:It basically means decisions are taken in an unprogrammed
way, because of the complexities as well as the kind of risk involve within the company. It is
thus quite essential to use such kind of techniques in businesses. This decision making process is
based on Logic and hence is more desirable and shows a better result.
P6 Various routes to internationalisation with key barriers
A company can choose various routes to go global these includes franchisee method,
Joint venture, etc. Under franchisee method the company will give its brand name to big
domestic business houses and they will operate within domestic country by the name of that
company (Wetherly, 2014). The parent organization will get a hefty royalty in return. Another
way include joint venture, in which the company will have a partnership with a domestic
company to capture market share and to see growth as well as profitability. There are some
barriers to Globalisation as well, which are as follows :
 Cultural Barriers
 Legal Barriers
 Language Barriers
 Trade Barriers
 Political Barriers
 Technological Barriers etc.
CONCLUSION
Every company has an aim to go global and for this purpose it plans various strategies to
reach to its goals. Global Business environment is dynamic in nature and is changing on a
continuous basis. There is a clear need to understand the factors which might have a direct
impact on the overall profitability of the company, if it tries to go global into different countries.
There are various risk involved in going global, these risk needs to be mitigated by the
management of an organization for achieving success. Different parts of the world carries a
different kind of cultures and hence their demand pattern as well as need pattern changes
accordingly, it is thus quite important to make a proper analysis of such factors before launching
any new products or services in such market. There are various benefits which are derived by the
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organization in going global, this includes, Increased Brand Reputation, Enhancement in Scale of
business, New customer addition as well as higher profitability level. It is also important that
management frames strategies which will benefit company and the society in general of
countries in which the company will going to operate, so that a better global business climate can
be made.
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REFERENCES
Books and Journals
Axelrod, R.S. and VanDeveer, S.D. Eds., 2014. The global environment: institutions, law, and
policy. CQ Press.
Bocken, N., and et.al., 2013. A value mapping tool for sustainable business modelling.
Corporate Governance. 13(5). pp.482-497.
Caligiuri, P. and Tarique, I., 2012. Dynamic cross-cultural competencies and global leadership
effectiveness. Journal of World Business. 47(4). pp.612-622.
Chadee, D. and Roxas, B., 2013. Institutional environment, innovation capacity and firm
performance in Russia. Critical perspectives on international business. 9(1/2). pp.19-39.
Cohen, B. and Kietzmann, J., 2014. Ride on! Mobility business models for the sharing economy.
Organization & Environment. 27(3). pp.279-296.
Ferraro, G.P. and Briody, E.K., 2013. The cultural dimension of global business. Upper Saddle
River: Pearson.
Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.
Kardes, I. And et.al., 2013. Managing global megaprojects: Complexity and risk management.
International Business Review. 22(6). pp.905-917.
Kirton, J.J. and Trebilcock, M.J., 2017. Hard choices, soft law: Voluntary standards in global
trade, environment and social governance. Routledge.
Klem, J.B., 2013. System and method for tracking information in a business environment. U.S.
Patent 8,583,514.
Koh, T.K., Fichman, M. and Kraut, R.E., 2012. Trust across borders: Buyer-supplier trust in
global Business-to-Business e-commerce.
Liu, Y., 2013. Sustainable competitive advantage in turbulent business environments.
International Journal of Production Research. 51(10). pp.2821-2841.
Milne, M.J. and Gray, R., 2013. W (h) ither ecology? The triple bottom line, the global reporting
initiative, and corporate sustainability reporting. Journal of business ethics. 118(1).
pp.13-29.
Swarbrooke, J. and Horner, S., 2012. Business travel and tourism. Routledge.
Wetherly, P., 2014. The business environment: themes and issues in a globalizing world. Oxford
University Press.
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