Influence of Globalisation on Organisational Governance, Leadership, Structure, Culture and Functions

This report evaluates the influence of globalisation on organisational governance, leadership, structure, culture and functions. It discusses the impact of globalisation on Thermax Limited's operations in new international markets.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1 & 2.....................................................................................................................................3
Covered in PPT...........................................................................................................................3
TASK 3............................................................................................................................................3
P3: Evaluate the influence of globalisation on organisational governance, leadership,
structure, culture and functions...................................................................................................3
P4: Evaluate the influences of ethical and sustainable globalisation on organisational
functions......................................................................................................................................5
TASK 4............................................................................................................................................6
P5: Evaluate the different ways decision making can work effectively in a global context.......6
P6: Determine and articulate the various routes to.....................................................................7
internationalisation an organisation may adopt, including key barriers....................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
This report is based on a company name Thermax Limited. This company is involved in
energy, environment and chemical industry. It is headquartered in Pune, India and India is
known for its large potential in energy sector. This company operate in more then 75 countries
and across several continents. Now, company is looking to expand its operation in new
international market places around the world (Daudisa and Vevere, 2020). This report discuss
about the factor that affect the decision of a company on an international level.
TASK 1 & 2
Covered in PPT
TASK 3
P3: Evaluate the influence of globalisation on organisational governance, leadership, structure,
culture and functions.
Globalisation highly influences the business of any organisation or company. Every
organisation has a set of goals, missions and objectives. These objectives and goals varies form
business to business. This further leads to the variation of organisational governance, leadership,
structure and culture (Hori, 2020). Organisational structure is the structure within the
organisation which helps the management to determine hierarchy of authorities, improve
communication and allocate duties and responsibilities to the employees. Organisational culture
is the set of beliefs and values adopted by members of the organisation. Organisational
governance is a set of procedures, policies, processes, customs and strategies which helps in
assisting the management in controlling the business and processes of the organisation (Malesky,
Dulay and Peltovuori, 2020).
Thermax Ltd. is high growth organisation with business in more than 75 countries. The
company is headquartered in Pune, India. It has made a plan to enter Angola, a country in South
Africa with low technological advancements. To evaluate such influences that globalisation has
on Thermax Limited's governance, leadership, structure, culture and business functions. For this
evaluation Mckinsey's 7S model is applied.

Thermax Ltd. apply is applying this model because it is facing inconvenience due to the
organisational structure, governance and culture in some functions of the organisation.
Mckinsey's 7s are classified into 2 categories: Hard S and Soft S. Strategy, structure and systems
are considered as Hard S and style, staff, skills and shared values are considered as Soft S
(Gbosi, 2019).
Strategy: Strategy can be defined as a plan which sets the path to achieve the
organisational goals and to get competitive advantage and successful foothold in the respective
market. Thermax Ltd. Is trying to formulate a strategy to clearly get competitive advantage and
improved organisational structure, governance and culture which helps the business in every
function. The company overlooks types of customers and the type of market to formulate such
strategies (Abdullah and et. al, 2019).
Structure: A robust organisational structure helps maintaining proper accountability and
facilitates the management and members of the organisation to easily access different business
divisions and units. Thermax Ltd operates in different countries and regions, so the management
forms a proper structure to facilitate the business in every region and country. For determining
the structure skills and expertise of the organisation and the employees are considered.
System: System is the process or procedure of performing business functions and
operations. This helps the management to evaluate every business operation and function and
regulate the system when necessary to exercise effective control over the workflow of the
organisation. Thermax Ltd and its management design business working regulations which helps
in achieving goals and objectives of the organisation.

Shared Values: It refers to the values and beliefs that the members of the organisation
carry. It also refers to the core beliefs and values of the organisation which is depicted and shown
in the industry work culture and general work culture. Themax Ltd has impressive core values
which adds up to the image of the company, it further keeps on strengthening its core values and
beliefs (Suriyankietkaew, 2019).
Style: This refers to the leadership style adopted by the company. Leadership style is a
method of leader by which he provides direction, motivates people and achieves objectives by
implementing plans. There are 7 primary leadership styles; Autocratic, authoritative, pacesetting,
democratic, coaching, affiliative and Laissez-Faire. Thermax Ltd will adopt the most suitable
leadership style as per its requirement.
Staff: It involves the efficient management and skilled human resource of thee
organisation. This segment requires the company to take important decisions related to its staff.
Such as training, reward system and recruiting. Thermax Ltd gives adequate importance to this
function and takes it into consideration in every region where its globalising.
Skills: This refers to the capabilities and ability of the company which enables the
management to achieve the set goals and objectives. Thermax Ltd works on skill development of
its staff and members, which helps the company to achieve competitive advantage in the global
market (Handoyo and Anas, 2019).
P4: Evaluate the influences of ethical and sustainable globalisation on organisational functions.
Ethical and sustainable globalisation has made organisational functions more effective
and also goal and objective centred. This type of structure helps the management to generate a
well organised set of guidance and policies which further helps in carrying out the business and
functions in a more effective and productive manner. There are various business functions which
will get influenced by ethical and sustainable globalisation:
Marketing Function: Marketing function highly depends on the target customers or
target market of any organisation. The company has to provide or produce the product as per the
requirements and needs of the target market. The company also needs to sell and promote its
product(s) keeping in mind the beliefs and values of the specific region. Thermax Ltd is
developing and marketing its product as per the need and wants of the consumers of different –
different countries. Angola has less advanced technology which makes this a perfect opportunity

to capture its market with providing products as per the values and beliefs of the people of
Angola.
Production Function: All the functions in an organisation are interrelated to one
another. Production function is interrelated to marketing function to provide it with the research
of the market so that it can proceed with the production of the product as per the requirements of
the consumers (Prime and Kulkarni, 2019). Production department collects data from marketing
department and designs the product accordingly. Thermax Ltd will develop its product as per the
need and wants of the consumers of the respective country and market. Angola's people are
waiting for a technological advancement and Thermax Ltd will bring it to them.
Human Resource Function: Human resource of the company will also be affected by
globalisation as the company will need skilled and unskilled employees both. In a country with
high population it is easy to get skilled and unskilled employees. Angola can provide more
unskilled employees than skilled employees due lack of resources to gain skill and knowledge.
Thermax Ltd will have to give proper training to its employees so that they can work efficiently
and effectively and as per the requirements of the company (Arokiasamy and Balaraman, 2019).
TASK 4
P5: Evaluate the different ways decision making can work effectively in a global context.
Globalisation of business requires the organisation to make strategies according to the set
goals and objectives. The company needs to form strategies and take strategic decisions which
will help it to enter the global market and compete with the rivals in those markets. This has lead
to the company to take following decisions:
Internationalisation of operations: It is considered a process in which the company
establishes its operations in the global market by considering the trends of other countries and
formulating some strategies according to these trends. Internationalisation involves buying from
foreign market and selling in foreign market (Gioko and Njuguna, 2019). This also involves
establishing subsidiary organisations in the foreign countries. Organisations decide to operate in
the intentional market to:
 Reduce costs by allocating facilities in countries where labour cost is low and economic
benefits are high.
 Increase Sales and capture new markets to increase market share.

 Develop knowledge about global businesses.
 Establish a multinational brand.
 Reducing risk by way of diversification of business activities and selling to diverse
consumer base; by this the organisation can earn higher profits while incurring losses in
only some area of the market.
Leadership and Decision Making: Globalisation has made the flow of information less
complex and effective along with free flow of cultural beliefs and values. This has lead the
managers to change their leadership styles from authoritarian to participatory leadership style.
Employees do not blindly trust the organisation and be loyal to it (Nguyen and Pham, 2020).
Managers earn this loyalty by making rational decisions and taking respective actions.
Internationalisation and adopting a new leadership style will enable the organisation to get
competitive advantage in the intensely competitive global industry. Transforming leadership will
help the company to implement strategies effectively and efficiently when duties and
competences are allocated properly.
Nowadays consumers have an information pool available with him which consists
information regarding prices of different products. They can compare prices of the products in
the same segment and also the quality of the products and their range. This has made the
company to pay attention to the needs and wants of the consumers, as a result the company now
decentralise and delegate decision making power to local centres who are in direct contact of the
consumers. The organisation needs to adapt to the changing trends and need of the consumers
and strategies must be changes and adapted with these changes. Effective working in a global
market also requires making good internationalisation decisions which involve choosing the right
foreign market to enter, routes that can be used to get into these markets etc (Yang, Liu and
Wang, 2020).
P6: Determine and articulate the various routes to internationalisation an organisation may adopt,
including key barriers.
There are various routes and methods of internationalisation that an organisation can
adopt:
1. Cross Border Merger and Acquisitions: Cross border merger and acquisitions are of
two types Inward and Outward. Inward cross border merger and acquisition is when there
is an capital movement due to the sale of a domestic company to a foreign investor.

Similarly outward cross border merger and acquisition involves outward movement of
capital due to purchase of a foreign company. Inward and outward mergers and
acquisitions are closely linked as there is both sale and purchase when there is a merger
or acquisition (Dahlmann and Bullock, 2020).
It is only done when both of the organisations gain something or the other from the deal
otherwise the deal would be of no use and gain to either of the organisation. One of the key
barrier of merger and acquisition is that it requires a lot of research and surveillance. In order to
attract foreign companies domestic companies exaggerate their abilities and capabilities. Foreign
companies have to be vigilant and do proper research before choosing a company to merge with.
They can get assistance from management consultancies and investment banks before they
venture into a merger and acquisition. Except this the risk factor must also be considered which
is a combination of Political Risks, Economic Risks, Social Risks and general risk associated
with black swan events.
2. Joint Venture: Joint Venture is a business model where two or more than two
organisations or parties share the ownership, governance, expense, return of investment,
and profit etc. To get a competitive advantage in the global market various organisations
expand either by the way of investing more capital or by the medium of Joint Venture
with organisations. Joint venture can be with a company within the same industry or with
some industry but the venture will give a competitive advantage. The joint venture can be
a private company, public company or a foreign company.
Joint venture are formed when both of the companies agree to collaborate with each other. Joint
ventures are formed so that the parties can attain their business goals with the help of each other
and their resources, which would have been difficult to attain independently. Establishing a joint
venture with an ideal partner will provide Thermax Ltd with other resources available with the
other partner. This is will further help Thermax Ltd to access new markets, strengthen position in
the current market, or diversify into new business. Global Joint Venture will help the company to
get access to labour, capital and technological resources which can significantly help in the
operations and business of the organisation (Bose and Pal, 2020).

CONCLUSION
The above report discuss about that Thermax limited should peruse for start new
operation Angola country or not. The above analysis holds a process of PESTLE strategies
which looks at the different aspect of the company from the political to environment and
conclude that the if company take some precaution and take a little risk it can leverage the
current market position and increase its sales therefore Thermax limited decision will be good
choice if if try to launch its market.

REFERENCES
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