Global Business Environment: Factors, Challenges, and Impact on Organisations

Global Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
P1 Key factors of cost, market, environment and competition that drive global commerce and
trade.............................................................................................................................................3
P2 Complexity of strategic challenges faced by organisations when operating in a global
environment.................................................................................................................................5
P3 Impact of globalisation on organisational governance and leadership, structure, culture and
functions......................................................................................................................................7
P4 Impact of ethical and sustainable globalisation on organisational functions.........................8
P5 Various ways decision making can work effectively in a global context..............................8
P6 various routes to internationalisation an organisation may adopt, including key barriers...10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Globalisation is a very general term which refers to the interaction of people and global
integration from various countries, organisations from various nations and different
government. It has multiple advantages and from them the major one is to make poor
nations developed and enhance the living standard in the economy. This report will discuss
about the main factors of market, environment, cost and competition which facilitates the
commerce and trade globally, strategic challenges being faced by the company when
executed in a global environment, impacts of globalisation and leadership, culture,
functions and structure, impact of sustainable and ethical globalisation on the functions of
organisation, various ways in which the decision making is being implemented globally and
the different routes or channels to the internationalisation which an organisation may
implement consisting of the main barriers (Lee and Stensaker, 2021).
MAIN BODY
P1 Key factors of cost, market, environment and competition that drive global commerce and
trade.
Cost
Focusing on increasing the investment is the main motivator for most of the foreign companies.
Due to the dramatic changes in the market the single nation markets will not be enough to
provide the subsidiaries with all the potential scope and scale of the economies. The objective
then is to acquire the major mileage from the cost of investment. The main objective analysis of
the global chances as well the costs which will ultimately lead to the making of the hard
decisions about which the customer segments, product positioning and the markets emphasize on
and which ones to ignore along with the correct strategies. The other strategy known as the
product differentiation takes the benefit of the actual or real perceived superiorities of the
marketer on the elements of values like the technical support or design. The marketers who go
for the high differentiation can not ignore to monitor the costs as the value perceptions of the
customers least depends upon the portion of the price paid for the quality acquired. The company
combines the cost containment with the high differentiation in order to make their global
activities creates an impact on the economies of scale in the marketing and production
(Oramah,and Dzene, 2019).
Market

The customers in the advanced economies tends to become more associated with the income,
aspirations, education, lifestyles and use of them in the free time. The marketers of particular
goods find the ready purchasers in nations with an increased purchasing power along with the
properly developed infrastructures but in some areas still the goods tends to stay although they
are comparatively less sophisticated. When the company have a global strategy which does not
mean that it should serve the overall world. The most complicated choices consists of taking the
decision about the places to spend the resources and where not. The most followed approach is to
begin by selecting the areas and then the nations within them The regional groupings can follow
the organisational structure of the prevailing multinational management like the Europe into
northern, central along with the southern areas which have the same kind of behavioural and the
demographic traits. The market information may be available already in the instances where the
companies is making the groups of the markets on the basis of prevailing frameworks and
structures (Chen, 2018).
Environment
Enhancing the mobility as well as the wealth of the consumer, fast information transmission
across the borders, publicity about the advantages of globalisation and the revolution in the
technical terms tends to increase the demand for the global services and products. The newly
developed markets are taking the advantage from the advanced communications with the help of
leaping on the stages of economic development which the others could not in the previous years.
A latest group of the global players in taking the benefit of the rise in the latest technologies
along with the areas of trading. These kind of the born globals or the mini-nationals through the
manufacturing bases instead of creating the plant in each nation which was the process in
previous years. The smaller bureaucracies also permits these firms to move in a fast manner to
gain power over the latest markets, create the new products or modify the direction according to
the situations.
Competition
In order to be competitive the rivals across the globe have to increase their marketing strategies
everywhere by trying to get the advantages which if are being weak then it would lead to the
erosion of the market share across the globe. The companies that are competitive upgrade,
introduce as well as distribute the latest goods in a fast manner than the previous time. The
organisation which is not at the top of the competition risks were being picked up by the other