Global Business Environment

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................................3
LO1..............................................................................................................................................................3
Factors which drives global trade and commerce....................................................................................3
LO2..............................................................................................................................................................4
Organizations faced strategic challenges while operating in global environment....................................4
LO3..............................................................................................................................................................5
Impact of globalization on leadership, organizational governance, culture and structure........................5
Influence of sustainable and ethical globalization on firm’s functions....................................................6
Models and theories in regards to organizational culture and structure...................................................7
LO4..............................................................................................................................................................8
Various ways for effectively working of decision making in context of globalization............................8
Different routes to internationalization that an organization can adopt....................................................9
Key barriers while doing business on international level and recommendations to overcome such
barriers...................................................................................................................................................10
CONCLUSION.............................................................................................................................................12
REFERENCES..............................................................................................................................................13

INTRODUCTION
Global business environment refers as uncontrollable international and local interactions which
influence firms’ operations. It can be termed as environment of sovereign countries whose exogenous
factors impact the home environment of the firm that further influence decision making on capabilities
and resources. The report is based on Allan Reeder Ltd that is planning to do their business on
international level. It is a sole trader that supplies butter and cream to bakeries. Their customer’s numbers
are increasing day by day and product range is also growing. They are operating from their distribution
centre which is from Heathrow airport and serving many businesses. As a junior global strategy manager,
I will advise company to perform global business operations.
The report will analyze factors such as market, environment, competition and cost that drive a
global business. It will explain the strategic challenges faced by organizations during a global business.
The study will determine the influence of globalization on structure culture, functions, leadership and
organizational governance. It will further evaluate the impact of sustainability and ethical consideration of
globalization on company’s functions. Furthermore, the report will evaluate various ways through which
decision making can do in effective way in context of global business. It will determine various route of
internationalization which an organization may adopt. Lastly, it will evaluate the barriers of international
business and make appropriate recommendations for overcoming these barriers.
LO1
Factors which drives global trade and commerce
Globalization refers as organization develops influence on international level as they started
operating their businesses globally. There are many factors which drive their trades are listed as follows -
Politics - It can be referred as government polices of different countries that are designed to do
international commerce and trade. The international polices is instrumental that channelize capital and
finance flow (Bhagra and Sharma, 2018). The countries are formulating polices on individual level which
is led by international and national institutes. This polices might influence the business of Allan Reeder
Ltd while they do international expansion. International polices ultimately affect the business operations.
These policies include trade laws, taxes, FDI regulations etc.
Economic - Financial liberalization and economic globalization centers the movement of funds and
capital inclusion in which the FDI is a major form. Exchange rates also vary country to country. The

interest rate fluctuations impact the business of global trader. The inflation rate in country's economy has
potential impact on business operations of international firm. Unemployment rate is another economical
factor. If Allan Reeder Ltd will do international expansion of their business then they will take economic
benefits in those countries in which employment rate is low. They can give employment to workers and
people in very low cost. The labor can easily be available.
Technology - It plays crucial role to drive a business on international level. Allan Reeder Ltd should do
technological up-gradation in order to globalize their services and products. They are able to standardized
and reproduce across the globe by fine coordinated with the technology. Technology built connectivity in
supply chain network. The use of cloud computing are helpful in distribution systems (Adekola and Sergi,
2016). There is use of TMS, CRM etc which enables the business to consolidate supply chain all aspects.
These software’s helps to digital organized inventory data, manage and monitor tracking and shipping
information. Also, provide assistance for creating electronic bills of invoices and landing.
Competition - It is one of the reasons why the organization prefers to join global strategy. Organizations
adopt global strategy for maintaining and gaining competitive advantage. One of the reasons Allan
Reeder Ltd wants to operate business at international level is that there is advantage of competition in
international market. The firm can improve the position by opposing the competitors of international
markets. This provides opportunity to firm to recognize as international brand. Allan Reeder Ltd can cope
up with the competitive market by providing consumer benefits in term of lowering the price of products
and services.
LO2
Organizations faced strategic challenges while operating in global environment
Strategic challenges which are faced by organizations while doing global business are as follows -
 International trade laws - Trade laws and tax implications navigate the legal requirements of a
business that runs on international level. Allan Reeder Ltd has to strictly follow the local
regulations and laws which govern their target market globally. There is involvement of legal
costs while entering in international markets. For example, European country has a law to provide
minimum of fourteen weeks for maternity leave.
 International Accounting - Accounting function becomes challenging when there are various
tax systems, compliance requirements and rates take place in global business (Challenges of
Doing Business Internationally, 2019). By adopting accounting strategy the company can