Global Business Environment: Key Factors, Challenges, and Impact on Organizational Functions

This report discusses the key factors of globalisation, challenges faced by companies operating in a global environment, and the impact of ethical and sustainable globalisation on organisational functions. It uses Deliveroo, a British online food delivery company, as an example to critically analyse risk and strategic challenges. The report covers political, economic, social, technological, environmental, and legal factors, as well as language and cultural barriers, and ethical considerations in human resources management, finance, sales and marketing, and production.

GLOBAL BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
P1 Key Factors of globalisation...................................................................................................2
M1................................................................................................................................................2
D1................................................................................................................................................2
P2 Challenges faced by company operating in global environment...........................................2
M2................................................................................................................................................3
P3 Impact of globalisation on organizational structure...............................................................4
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
.....................................................................................................................................................4
D2................................................................................................................................................5
P5 Evaluate the different ways decision making can work effectively in a global context........6
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.......................................................................................................7
M4................................................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
1

INTRODUCTION
Global business environment is the international interaction out of a company control
that influence its business operations, decision making on resource utilization. Global business
environment is consist of external and internal factor that can harm the organization growth in
negative as well as in positive way. Along with this, in order to sustain in international market
organization has to conduct market analysis so that launching of their products are successful.
Furthermore, the present report is based on Deliveroo is a British online food delivery company
that sell products and services through various channels and local store. Moreover, the present
report will discuss about critically analysis about risk and strategic challenges adopted by
company.
MAIN BODY
P1 Key Factors of globalisation
Pestle
This is known as strategic tool that is used by company in order to analysis about the external
factor in order to sustain in the environment. Along with this, it helps in finding external factor
that will help in finding right opportunity for the growth (Bismark and et.al.,2018). It is consist
of various factor such as political, legal, environmental, economic and technology.
Political: This factor is consist of rules and policy made by the government in order to maintain
the peace in the societies. Along with this due to pandemic government has made new policy
such as social distancing and online payment that are followed by company. Furthermore, the
Deliveroo is following by the organization in their store in order to attract large customer. In
addition to this, due to this policy company has to spend more in the infrastructure in order to
sustain in market and it has increase operational expense of firm (Kochkina, 2019). Along with
this policy such as restriction on trade has affected the business of firm as it was not able to get
material from the suppliers as well as to meet the demands of customer. Thus, this policy has
also impacted negatively on revenue earning of the firm.
Economical: Economic condition also affects organization profit and loss that helps company
in sustaining in the market Along with this, Deliveroo has expanded their business in market of
UK that has good economic condition that has helped organization in attracting large customer
(Capobianco and et..al.,2021). However, due to COVID GDP rate of country has decline and
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it has impacted growth of firm in negative way. In addition to this, due to Brexit Policy most of
the workers has moved to EU and due to that Deliveroo is facing harder time in finding worker
as most of them left because of poor economic rate (Erbas, 2019). Moreover, due to high rate
tax imposed on food company by government of UK has also affected sales of the
organization as price of food product was increased in order to pay the tariff. Thus, this factor
affects the company growth in positive as well as negative way.
Social factor: This factor is consist of market trend customer taste and preference as well as
segmentation done by the government in order to target audience. It is one of the most
important factor that influence global market condition as it is dynamic in nature. Along with
this, Deliveroo has divided their customer on the basis of income so that it can it attract all
types of customer that will contribute in increasing their sales (Tumaku and Ren, 2020).
Moreover, company is facing issue in hiring employees as most of them are leaving country due
to poor GDP and it is looking for new students workforce for meeting their labour rate.
However, the organization is facing PR crises as students are not joining as per the demands. In
addition to this, it is to be suggested to company that it should make food product according to
customer taste and demands as it will allows Deliveroo to attract large consumer.
Technological: This factor is consist of advance tools and technology that has been used by
organization in order to increase growth of the company. Along with this, it also play major role
in influencing global market condition as it keeps advancing for time to time. Furthermore, in
the time of pandemic this factor has been important part in the success of the organization as
well as to improve the functional unit of the firm (Phan, 2021). In addition to this, Deliveroo is
making use of digital marketing by selling their food products on various online platform and
social sites in order to reach their customer in limited frame of time. Furthermore, it is to be
suggested to firm that it should make use of data analytical tool in order to analysis about taste
and preference of customer as it will contribute in increasing sales of company as well as build
healthy relation with them. In addition to this, it can make use of affiliated marketing as it will
allow organization to increase brand awareness in the market area.
Environmental: The company is following CSR policy in order to protect environment from
hazardous substance. Along this, it make use of paper bags in order to attract large customer as
well as to save environment. Deliveroo actively works with local European authorities to help
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develop and communicate initiatives to support businesses and the potential impacts of climate
change.
Legal: It is consist laws made by government that need to be followed by company in order
to sustain in market ( Kingshott Davcik and Cardinali, 2020). Along with this, Deliveroo is
following employment law and company law and data protection act in order to avoid
intervention of government and law suits.
M1
The key factors such a technology benefit the organization in attracting are customer as well as
covering large area of market. This factor basically increase the brand awareness of company in
the market. In addition to this, it can also create challenges such as high expense as advance
tools and technology is expensive in nature (Martinez and et.al.,2019). Additionally, any
negative comment about company can affect the brand name and it can lose potential customer.
D1
The advantage of global business is that it allows company to sell their products and services in
other countries that results in earning large profit with low cost structure. Along with this, it
allows company to expand their business in various countries and increase their performance in
market area. However, challenges faced by organization is ethical business practice and pubi
relation that can impact on the firm growth negatively.
P2 Challenges faced by company operating in global environment
Global business environment is basically operating or running the business in international
market area in order to earn huge profit or increase brand awareness. Moreover, there are
various advantage that firm can take benefit of such as earning high profit. However, challenges
are also there as each country have their own government policy, laws, culture, language that
can create difficulty for company (Amankwah-Amoah, Khan and Wood, 2021).
Language barrier: It is one of the most important aspect that organization ha to follow in order
to sustain in the environment. Many companies face difficulty in language as every state and
country have their own local language (Phan, 2021). Thus, in order to connect with customer
company has to hire interpreter and consulting a native speaker so that it can understand market
trends and customer choice. For example: one of the famous company Mercedes- Benze when
enter into the market area of china it had difficulty in selling their services and product. As in
chines Benz means rush to death and it has created negative impact on the customer. Thus, in
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order to attract customer and to sustain in market area Mercedes has quickly adapted for name
Benzi that mean fast. It has helped firm in running their business effectively as well as
attracting large customer. Along with this, organization also have to conduct training class so
that employees can learn language and it do not affect organizational culture of the firm.
Culture Difference: It is also one of the common issues faced by the organization
when it expand their business in international market. Culture is consist of the holidays, arts,
traditions, foods, and social norms that are followed by a specific group of people. Thus, it is
important for the company to blend in the culture of foreign country in order to interact with
customer and employees as well as to build healthy relationship with them (Martinez and
et.al.,2019). In addition to this, it is important for company to understand the culture before
starting their business in positive way. For example: In countries like US working hour of
employees are form 9 am to 5 pm that can extend earlier or later. On the other hand country like
Spain typical hours of working are 9 am to1:30 pm and 4:30 to 8 pm. Thus, company has to
understand this before starting business as not following culture will increase employee
turnover.
M2
The strategic challenges that is faced by organization while operating in global market is
political risk that can create hindrances in increasing the sales of the organization. Along with
this, restriction of trade at time of pandemic has affected growth company as it was not able to
reach its supplies and customer. Furthermore, the company supply chain is also affected by
technology and customer taste and demands.
P3 Impact of globalisation on organizational structure
Globalisation do affects company structure leadership and culture of firm in both negative and
positive way. Moreover organizational structure is known as framework that helps company in
determining its line authorities, communication and allocating rights and duties (Salvarli and
Kayiskan, 2018). On the other hand, organizational culture refers to set of values, beliefs and
assumption shared by members o the company. Thus in order to evaluate impact of globalisation
on culture and government Mckinsey 7’s model can be used.
According to this, model elements are divided into 7 elements either hard and soft. Three hard
elements include such as strategy, structure and systems and it is easy to identify and
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management can influence them directly. On the other hand, soft elements are hard to find are
less tangible in nature.
Strategy: The organization is trying to expand their business into new market and its adopting
growth strategy in order to increase its productivity.
Structure: The company is following functional organization structure that has helped firm in
maintaining their functional unit.
Systems: The employees of the organization has to go through many activities like sales and
marketing in order to reach their customer (Putra and et.al., 2019).
Shared values: The company is following business ethics such as respect, integrity and
transparency with employees and customer.
Style: Deliveroo is following democratic leadership style in order to manage their employees.
Staff: The organization have staff for all the departments like marketing, IT, logistic and
customer care.
Skill: The employees have communication and technical skills.
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
Ethics are related to the profound component within the organisation also this can be
considered as the rules that can be governed by organisation for certain approaches. Deliveroo
consider the decision on the basis of ethical surrounding. The ethical decision is impacted on
reputation of firm so that is necessary to consider all the aspects the functions of Deliveroo are
human resources management that is the severe complexities that are resulting the
globalisation (Kokodey, Gnezdova and Lomachenko, 2018). The cultural difference is very
common in order to commits issues so that it created between employers and employees.
Some of the basic issues faced in HRM are bias free hiring or promoting the candidate so that
it cannot affects the compensating workers. Also, the ethics of the globalisation imposes for
avoiding discrimination, child labour and sexual harassment.
Along with this, financial department also impacts the organisation ethics because
when any company sustained financially for long term scales it can be consider as good
practice. Trading one of the important factors that control all the functions of finance and in
these conditions, this can be important to taking fair decisions for both the parties and the
mutual agreement for any contract and sales agreement (Damarwulan and Farida, 2018).
Deliveroo has focus on fair decision so that it can help for systematic record of all the
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accounts. Also, organisation is ensured for paying all the tax on time so that no one can
objection for external ands internal duties. The financial analysis or reports mislead on the
basis of wrongs decisions it is necessary to cooperate with all the functions systematically. At
the time of audit for end of the year Deliveroo hire special team of chartered accountant so
that they can help them for smooth functions of accounting. That are also help for creating
more strategies which related to finance. On the other hand, sales and marketing are important
function because it depends on the conflicts that can be created for different choice of
customers. It is necessary to follow those marketing practices which are need to follow for the
company. The ways of communicating with customers it is necessary to do in systematic way
so it can not affect the brand image. Sometimes pricing and delivering of the goods and
services are affect the sale because consumer is expected to buy product on low cost with
good quality. Proper ethical practices are help to not target vulnerable customers to consume.
It is necessary to label the product with fix price and tag so that customer can understand the
fix price for all the customer (Zakaria, Abdul-Talib and Amelinckx, 2020). The ethical
production is necessary to follow for the company in good way because it can be affecting the
technology when production department working well. Deliveroo is focused on function
which are related to productions as well as not damaging the environment as well as consumer
of the society. The other ethics are related to the certain code of conduct with standard which
are need to be followed also ensure about ethics that are compiled withs difficulty.
D2
It has been critically analysed that there are some of the important strategies which are
taken by the company in global business environment are to clear the communication withs the
employee for guiding. On the other hand, there are functional organisational structure would be
recommended for Deliveroo in order to expansions of the business in the international market.
Th decision making process follow by the top management decision so that it helps to increase
the productivity as well as it can be work good with empowering employees through the
communication (Hacioglu and Sevgilioglu, 2019).
P5 Evaluate the different ways decision making can work effectively in a global context.
This is necessary to visualise, analyse, summarise the strategy for decision making of
product and services. Strategies are the important choice which are related to real power
of the integration in which there are more option for partial approach. Strategic capability
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including competencies and resources which are helps for firm utilisation in order to
competing in business environment. Therefore, it also constitutes firm’s strength and
weakness that can be competitive advantages or disadvantages for rivals.
Internationalisations is one of the most important strategies that are need to be adopted by
Deliveroo in order to influencing the cross-border trends and established operation across
national borders (Kim, Li and Lee, 2020). This also involves purchasing from the foreign
market for upstream internationalisation such as importing or selling goods or services in
the foreign market for establishing the subsidiaries. The example of internationalisation
of activities are offering services to Amazon in Africa by UK based company. In this
strategy the firm decided to operate the business more than one country. Deliveroo
provide their services to more than ten countries in order to make the strategies which are
related to the reducing production cost for relocating operation in the countries with less
labour cost and also benefiting from economies of scale. It helps to increases access of
the new market as well as reducing the risk by diversifying the operations across the
national border so that serve diverse customers for earning highs profit in order to make
loss in some market.
Globalisation increased for accessing information in order to transfer cultural values
and belief the pressured manager is changing because the decision making of the
leadership and management changes their style to traditional authoritarian to participatory
transformational leaderships (Wei, Thurasamy and Popa, 2018). There are employees
who are no longer based on blind loyalty for firm as well as the leadership is depend on
rational decisions. Some time there are different types of tough decisions which are taken
by Deliveroo in order to expand the business internalization. The internationalizations
leadership is leading superior performance withs intensely competitive global
environment. In transformational leaderships it is facilitating efficient and effectiveness
in order to implement competencies and resources for appropriate allocation. Customer
has right for comparing the quality of product or services so and make the decisions
accordingly at global level. To offer services at local center is comparatively easy other
than global level that is why all the decisions for new services it can be taken by top level
managements for delegation of authority and decentralizations. Headquarters can not
support for customizations of services but sometime that kind of decisions are taken by
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the leaders so that it can complete the need of the customer. Some of major decisions are
related to internationalism are which foreign market to enter, how to enter and when. This
decision can meet demand of customer for the uncertain future. It can involve the risk or
handlings it with strategic issue.
Handling the risk in internationalization decision that are involving the risk and it also
implies firm’s management for applying the risk management. There are some of the
unexpected risks which can occur anytime such ass different kinds of issue related to
taxes or custom duties. The globalizations increase utilizations of the risk management
and there are diversify the operation for the business. The reduction of barriers of the
international trade are very common withs the help of government by acceptingthe
change due to globalisations. There were intense competitions were faced by the
company due to support of local government that can impact the productivity of the firm
as well as its revenue.
P6 Determine and articulate the various routes to internationalisation an organisation may adopt,
including key barriers.
There are different barriers which can be affected the decisions making process of the
company such as financial constraint in order to established financial and physicals resources for
internationalisation. The cost of overseas are very highs which are affect the day-to-day
transaction with limited access of the capital and credits. Sometimes, relevant evidence is
including loss that can be faced by Deliveroo for new venture withs amazon because there is
large customer base of company all over the world but at the same time chosen firm has limited
access for accessing term loan or operate it internationally. Further, managerial barrier is affected
by arising difficulty for the limited management with insufficient staff ands lack of resources in
the international market. There are organisations which are not going to participate in the
international business. Management has taken different types of decision which are difficult to
follow for the international business but it is important to follow those high-risk decision. Some
of the foreign affairs are also impacted the company in order to capabilities and managerial
knowledge that can help for international expansions (Kasemsap, 2018).
Also, market-based barrier is created just because foreign market emerging most obstacle
in recent study some of the important challenges which are need to be taken by the company.
The government regulation is the main factor can include the non-tariff barrier for the reason of
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cultural difference. Also, it is very common for the international market to be face cultural
difference in the enormous way by difference of religion, social etc. The need of the market is
also depended on their culture as well as it helps to face problem also in some point of time.
Deliveroo never differentiate the customer on the basis of their culture difference because there
are difficult to understand the customer choice.
M4
There are different types of key barrier which are faced by the organisations in which
there are financial barrier are played important role in order to face problem regarding
expansions in international market. On the other hand, managing expectation are also affect the
firm but to overcome both the issue it is necessary to manage the finance in such a way it help to
segregate the money according to the activity. Also, for management it is necessary to hire those
team which are able to take the decision clearly.
CONCLUSION
It has been concluded that globalisation played important role in the expansion of business also
analysed the key factors of cost, market and environment in order to understand the competitions
of the market. There are some of the strategic complexities were determined by operating in the
global business environment are some of the strategic complexities were determined by
operating in the global business environment. Also, evaluated the operating business in global
market by influencing the market structure, culture and functions on the basis of Mckinsey
model. Further discussed the ethical practices which are followed by Deliveroo. Lastly,
determined the barriers which are affect for the internationalisations of business.
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