This report analyzes the key factors of globalization in Vodafone Group Plc, the strategic challenges faced in a global environment, and the influence of globalization on organization governance, leadership, structures, culture, and functions.
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Table of Contents INTRODUCTION..........................................................................................................................3 P1 Key factors of Globalization in Vodafone group plc.............................................................3 P2 Strategic challenges in globalization......................................................................................6 The strategic challenges caused by globalization.......................................................................8 P3 Influencing of globalization on organization governance, leadership, structures, culture and functions......................................................................................................................................8 P4. Influences of ethics on organizational functions..................................................................9 Influences of sustainability on organizational functions..........................................................10 McKinsey 7s model of Vodafone.............................................................................................11 P5. Different ways decision-making can work effectively in a global context.........................12 P6. Ways (strategies) to enter global markets............................................................................13 RecommendationsofhowVodafonePlcshouldadaptitsorganisationalstructureand decision-making processes.........................................................................................................15 CONCLUSION.............................................................................................................................17 REFERENCES................................................................................................................................1
INTRODUCTION Globalbusinessenvironmentisdefinesastheenvironmentindifferentsovereign countries, with is external to the environment which is in the home countries, and these factors influence decision making on use of resources and capabilities. There are types of global businessenvironmentwhichareexternalandinternal.VodafoneGroupplcisaBritish multinationaltelecommunicationscompany.ItsregisteredofficeislocatedinNewbury, Berkshire, England and its global headquarters is based in London, England. It predominantly operates services in the regions of Asia, Africa, Europe, and Oceania. Among mobile operator groups globally, Vodafone ranked fourth (behind China Mobile, Bharti Airtel and Vodafone Idea, (of which the Group owns a 45% stake). Vodafone is one of the world’s largest tech comm providers, bringing connectivity to over 650 million people, including almost 20 million broadband customers. Vodafone has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. In the report key factors that drive globalization will be analysed. Also strategic complexities associated with operating in a global environment will also be determined. Influence of global market on organization's culture, structure and function. Light will also be put upon the influence of globalization on organizational decision-making and strategy. P1 Key factors of Globalization in Vodafone group plc Factors of globalization changes the business of company which is associated with one country that can operates in multiple countries and some key factors are discussed below- Increasingintechnologydevelopment:-Vodafonehasreducedcostandimprovemore network, moved to broadband from narrowband, also provide wireless connectivity of landlines. Technology development in Vodafone on the way to develop 5G network for faster speed and save time for users(Canuto, 2020). The best strategy for technology among customer they have allowed direct transmission of data and users can speed them by transferring data at many times. Strategy for company in having secure transmission at small amounts of data in mobile networks. Benefits- Advance technology make faster and reliable to communication in company. Improved security forbusinessandthatcanbegreaterresultsinproductivityandefficiency.Technology
development also increase production capacity of Vodafone and also Job opportunities as production increases therefore more workforce is needed. Challenges- If company has adopted wrong software that could be bigger challenges for company and some employee may dislike new update system, others have fear in new technology that will over take their jobs.In case of increasing technology development there are also challenges of data security as Vodafone stores large amount of data on their systems and there are chances of getting hacked. Consumer growth:-Consumer of Vodafone company are more satisfied with their network speed and security(Cepel and et. al., 2019). They offer many more free data for high amount recharge and their services always provide yearly based data which is more beneficially for teenagers. Vodafone has make promise to their customer for platinum network. The management in company are more available for their customer queries and learns from customer feedback. To help their customer in recharge due to COVID-19 lock down, Vodafone programme allow recharging prepaid account and for every recharge retailer will get more benefits from company. Benefits- Company has provided platinum network for their growth in consumer and updating 5G network for maintaining more speed and security.This also increases their satisfaction level and also enhances their loyalty for the company. Providing the consumer this convenience also increase in promotion of the company as happy customers are the source of word of mouth publicity. Challenges- In recent time many more rural area people are unable to connect with their network, it can be big challenge that company facing in growth for customer.This conveniencesometimes makes the consumer more lethargic andincreases their expectation for the future and if their expectation are not met then they shift to other networks. Increasing in global competition-Vodafone is British company, it is known as worldwide market coverage and have great distribution. As there are many followers for Vodafone and have more competitors among the global including such companies like Bharati Airtel, china mobile, Verizon, many more(Hamilton and Webster,2018). As Verizon network that fibre cable for connectivity with less speed and security but as compare with Vodafone speed is fast and have
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more advance technology. In recent time many countries has cancelled deal from china which has great market share and Vodafone has more market share and revenue. Benefits- Entry of Vodafone in competition market has brought more global practices and providing better servicesatdomesticmarket(Kaur).Ascompanyhasmorefolloweratworldwidewith competition to other company.The customers benefits from the competition as the company tries to provide more benefits to overcome competition. Also, to deal with the competition the company focuses on innovation which leads to growth of Vodafone. Challenges- To develop more plans for services for customer and maintaining higher speed and security for followersit adds on to the cost of Vodafone. The company can also indulge in wrong practices to beat comptition. Developing more services at international market-Company has provided more services in developing international business while with connection voice, messages services at international wholesale telecoms market. Flexibility for owning different needs in cloud and hosting process for organization (Kokodey, Gnezdova and Lomachenko,2018). Providing cyber security services devices, network and apps. Main strategy for developing 5G network at worldwide range so that canmakemobilecommunicationmoremobilitytouse.Vodafonehavesimplifying communication management which helps in reducing costs. Benefits- While developing more services that support international market that can be beneficially for company it can earn high sales on profits by selling in different countries where domestic prices is not being satisfied.The company gets an opportunity to know their strengths and can also know their potential. This also helps in increasing the market share of the company. Challenges- Entering into new international market with more services company has to face many more challenges in earning more profits and building up trust.It adds on to huge costs and also increases complexities. Government policies-Government has make an appropriate plan for rural area network and also suggested investing more in development of network of rural areas. Employment regulation for
employee in company with more benefits and data security about their network. Vodafone do not break down the laws and norms of government. Benefits- Technical scales helps government to play role in market and protect consumer from the internet corrupt data.Adopting to the government policies helps the company to avoid lawsuits and creates a good brand image in the minds of people. Challenges- Vodafone has to faces many more problems or challenges in market while government policies changes and regulation for telecommunication as it take time to adopt sometime new changes in market from government apart.The company also has to indulge in various merger and acquisition to enter into the new market and also have to pay taxes as per the government policies. P2 Strategic challenges in globalization Vodafone have faced many strategic challenges while doing business globally such as training, poor transportation, expansion of cots or distribution of cost, poor communication facilitate and infrastructure(Milovanović, Milovanović and Radisavljević,2017). Here are some challenges that are faced by company are follow below- Challenges in political:-In most of the countries, telecom industry has recently being set up were they state operates or state owned. Development has results in increasing local and foreign private participation in telecom industry. Vodafone has invested more in telecommunication sector for improve more existing infrastructure, to satisfy demand or to benefit the rapid changes of new products and services. Currently broadcast and telecommunication sector are being separated from each other, from this separation Vodafone builds up many strategies which are may be against to political structure but company do not break the barriers which are make by government. Culture diversification-Vodafone business is globally business which have multiple culture with different language, values, customs(O’Rourke, 2019). Hence, company has to manage their work according to their culture which is extremely difficult in deigning the business strategy for such environment. For such culture company has different employee with skills and well knowledgeable about the culture so that they can help followers to solve out their problems.
Diversification of currencies:-In having global business there will be fluctuation of currency and company have to make profits according to there currency. Stable governments currencies are less in developed countries. In local currency market Vodafone can also involve in some risk currency. Regulation challenges:-Changes in laws and norms by government and if in some company if legal laws are week for (business) than company has to face many challenges and involves in risk taken(Sultanova and Chechina, 2016). Vodafone should be clearly defined before starting new business in that country so that it could not create some difficulties for company to invest their software. Company sometime also face challenging regarding changing banking laws that can affect money to their existing country or can make limit assess of funding. Diversified risk:-Vodafone started new business in some countries that have poor infrastructure it can also cause barriers to start business as well economic condition of that country is highly unskilled with employee than it may cause loss to their company. Vodafone involves employee from that country where they invest for business it may cause corruption or crime from that employee and company have to take risk for hiring labour from investing country. Independent-Vodafone independence can create more opportunities for doing globally business whiletakingtheseopportunitiescompanycanraisetheiradvantagetowardscountry (Tallman,Luo and Buckley, 2018). Company has to manage the rapidly change and impact of globalization in their business. Customer diversification:-It is big challenges for company to meet with the needs and wants of customer, as Vodafone is telecommunication company so the satisfaction of customer will be by using one product and services. In changing global organization it can create complexity for company towards the customer in fulfilling their needs and wants against their network issues. Diversification of shareholder:-The great challenges company has to possess in shareholder diversity at global business. Here, stakeholder is party which is interested in company either affected by their business and their primary shareholder in regular corporation with its investors, employee, suppliers and customer(Hamilton and Webster,2018). They can identify relationship with some other business and it can understand their expectation and needs, developing communication strategies in influencing their behaviour and attitudes. Vodafone stakeholder have positive impact on business and helps in reducing others business negative shareholder.
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The strategic challenges caused by globalization The strategic challenges faced by globalization in terms of: Business risk – Business risk are those factors that will lower the profits of Vodafone and are the threats for the company. The company can face the challenge of network hacks which leads to leak of data which are confidential. Taking the business risk and adopting new technologies can also add on to the security of the system for Vodafone. Diversification strategies – Vodafone has adopted the cost leadership generic growth strategy to diversify as it provides the company to explore new product opportunities in the new markets. But it also leads to lack of innovation and also it encourages lower quality of products. Supply chain – As due to globalization also the company has to expand their supply chain which leads to increased costs and complexities. But the company can get the advantage of expanded market and customers. P3 Influencing of globalization on organization governance, leadership, structures, culture and functions. Influencing of globalization on leadership- Globalization has aspects that how organization will interact with global environment. Rapidly changes in political, economic and social environment can affect the business of Vodafone (Cepel and et. al., 2019). The system of globalization also impact on governments and political factor around the world range. Most important technology is rapidly changing and also establish thathowbusinesshavetoconductthat.Whiletherearemuchleadershiptheory,here transformationalleadershiptheoryisuniversallyacceptingtheemergingofleadership approaches and have capabilities in reaching across the culture of organization performance. Vodafone'sleadershipskillsandpracticeshelpsindevelopingthemselvesorotherin organization towards changing business globalization and have ability to solve complexities of business. Influencing of globalization on organizational structure- When there is affected on globalization than it can also changes the impact of structure of organization with new customer, new suppliers, new market and new partner with their business and it can bring out many more challenges for Vodafone's structure(Tallman,Luo and Buckley, 2018). Most of the product's strategy go up with their market strategies in company and
additional it includes planning strategies in globalization for accessing better and low production cost, they can also change their strategy according to their market strategies. Affected organizational culture of global business- Culture means it is an idea, custom and social behaviour of person in a particular society. Vodafone can affected by international business in something that could not be understood and avoid some misunderstanding between employee and clients and also be sure about that how they are representing themselves in market with their products and services. In business communication plays important role and sometime effective communication can also effect their business in falling down in new market(Canuto, 2020). Vodafone's should be aware about different culture with different attitude in international business. This can be related to their informal approaches and cooperation in the organization. These attitudes towards management can defined roles in team or individuals. Hence, it is being important for Vodafone to be aware about their target market approaches towards their organizational structure. Affected of organizational function of global business- Global business can affect the present climate of economic and helps in successfully the function of management in Vodafone. Companies needs to set a proper defines about operation and innovative idea that can help organization to be successfully in both and local market. Customer in Vodafone have to develop or encourages others for being followers of this company and financial services in these companies produce some different new challenges for customer during the production or service time(Kokodey, Gnezdova and Lomachenko,2018). In business strategy of Vodafone in global business they can build up long term relationship with their customer association. This plans helps them to have more advantage in cost, growth and expansion and also attract other customer. A global operation allow the business more efficiency productivity in market. Company can finance more in adopting new techniques which is more beneficial for followers as well as have huge amount of profits. P4. Influences of ethics on organizational functions Ethics are the moral philosophy that study what is right and what is wrong in the behaviour of human. It is a code of conduct and deals with moral principles. Organization ethics deals with applying general ethical principles and standard to business activities, behaviour and decisions. It is the way Vodafone responds to an internal and external stimulus. Organizational ethics and organizational culture goes hand in hand (Lindebaum, Geddes. and Gabriel, 2017).
success of Vodafone in the global market. It is the ability of organization to achieve their goals and also means increasing long term stakeholder value. Influence of sustainability on production function – Using the concept of reduce, reuse,e recycle, recover, redesign and re manufacture can improve the product life cycle. Also producing the environmental friendly products will act as a source of competitive advantageand helps in long term sustainability of Vodafone. Influence of sustainabilityon marketing function – Sustainability is importantfor marketing function as this helps in attracting customers. As customers are now becoming for aware about the environment protection therefore if the marketing function uses the phases and concept of buy local they have greater chances to win at it. Also by keeping the productive people for making ads will give an advantage to this function. Influence of sustainability on finance function – As for finance function money is most important aspect therefore it canearn more money and boost your bottom line by making the businessmore sustainable. The following things act to increase the fund sustainable business can earn: Reducedbusinesscosts, more innovative strategies, an improved reputation, and more new customerswhovaluesustainabilityallworktoincreasetheamountofmoneysustainable businessesearn. McKinsey 7s model of Vodafone McKinsey 7s model of Vodafone is as follows: Structure – The organization structure of Vodafone focuses on commercial and financial priorities. Strategy – Their strategy is a responsible approach to sustainable business and risk management and exists to create value for the customers. System – Vodafone uses two billing system which are analogues network and Euro bill and also it incorporates certain tools to handle complex transactions. Skills – Vodafone is focusing on developing digital skills in their employees to meet the goals of the company. Staff – There are large number of staff in Vodafone and also keeps on increasing every year. They have a well-trained personnel. Shared values – Vodafone values is to expand their footprint in new markets and enhance productivity.
P5. Different ways decision-making can work effectively in a global context Decision making is the process of choosing an alternative from among various available. This is also regarded as the check and balance system that keeps Vodafone more alive and helps in growing vertically and also in linear direction. It is the problem solving activity and decisions are made to achieve organizational goals and objective (Aritz. and et.al 2017). It is regarded as the cognitive process and involves a process of examining various possibilities option of a given problem, evaluating and comparing them and then choosing the best course of action. Importance of decision-making Firstly it helps in achievement of goals and objective of Vodafone within given time and budget. In this best alternative is searched for, resources available are utilized to satisfy the employees at workplace. Secondly it increase the motivation of the employees as rational decisions provide framework for operation and guidelines to the operating staff. It also gives financial and non- financial benefits to the employees (Jiao. and et.al 2016). Helps in tacking and facing problems which Vodafone encounters as quick and correct decision helps to solve the problems effectively and also helps in accepting new challenges. Also helps in growth of business as correct and quick decisions helps in utilization of resources and also helps in increasing the efficiency. Methods of decision making There are four methods of decision making which are used by Vodafone: Command – the first methods of decision making is command in which decision are made without involving other people and are taken generally by the superior authority. Consult – The second methods is consulting in this before making the decision inputs are invited from others but the decision making is ultimately done by one person only. It is time consuming process but is less risky as other opinion and option are also taken into consideration. Vote – The third methods is voting in which various alternative are discussed into the group and then opinions are given either in favour or against the alternative. Consensus – The last method is consensus in this decision is not taken until everyone agrees to one course of action. Ways in which decision-making can be more effective in a global context.
Cost benefit analysis – This is the way in which pros and cons of alternatives must be identified to ensure the best decision is made in global aspect (Posner. and Sunstein, 2017). Narrowing the option – Among the various alternatives cut down or limit the option to fewer ones to enhance the efficiency of decision-making in global context. Going for detail research – When there is time for decision-making at global level research is the base of it and makes it more effective. Evaluating the significance – The major part in becoming more effective in global context is evaluating time spent on making a particular decision and also if the time spent is doing the justice to significance of decision-making. P6. Ways (strategies) to enter global markets. There are number of ways in which Vodafone can use to enter into global market which are as follows: Exporting :It is one of the best way to enter into the global market and also cost effective way. It is direct selling the products and services in another country. There are basically two types of export direct and indirect. It is low risk strategy and also offers degree of control over risk, cost and resource commitment (Paul, Parthasarathy. and Gupta, 2017). The major cost of exporting is in marketing. Usually export involves four parties which are: the firm, an importer, a transport provider and the government of the country to which the firm is exporting. Advantage – Exporting requires huge capital investment and does leads to larger economies of scale and the company gets access to larger customers. Disadvantage – The risk is larger in this case and there is difficulty in maintaining the risk and also greater larger managerial ability is required. Licensing andFranchising :It is an agreement in which the licensor provides exclusive or non- exclusive rights to manufacture product for a fixed period and in some specific market. In this arrangement licensor gets inexpensive access to new market and licensee gets competitive advantage. It is a system in which franchisor offers various rights and resources like equipment, managerial systems and other support which are important for franchisee to operate the business and in return the franchisee has to pay fees and royalties to the franchisor. Advantage – There is an advantage of lower risks and less investment to licensee or franchisee, also the licensor or franchisor gets royalty or fees. The risk is lower.
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Disadvantage – One of the major disadvantage of this strategy is leaking of trade secrets of Vodafone, and also conflicts may take place between licensor and licensee or franchisor or franchise, there is lack of creativity. Joint venture :It is a type of partnership between domestic and foreign firm and both the firms contributes in capital and share ownership and have control. It requires great commitment and also riskier and less flexible. By joint ventures firm may get tax advantage. This strategy gets the benefit of local knowledge of foreign market and allows the firm to share costs. Advantage – It gives the benefit of new market access and expanded distribution network, also the costs and risks are shared with the partners. Disadvantage – Sometimes the objective becomes unclear, conflict of interests. Also, the level of expertise and investment is unmatched. Foreign direct investment :It is directly investing into the facilities of foreign market by either establishing a new venture or acquiring an existing company. The firm interested in FDI chooses to engage in full-scale production and marketing in other countries. It requires comparatively larger investment and is also riskier. It is usually for a longer term duration. Advantage – It increases the employment in the economy and also stimulates economic development. It also helps in development of the areas in which the investment are being done. Disadvantage – Due to foreign direct investment there is disappearance of small scale industries, it also contributes in raising the pollution and sometimes leads to inflation in the economy. Merger and acquisition –It is also a strategy to enter into new market in which consolidation of companies take place. Merger is combination of two companies to form one which means identity of both the firm remains into existence and acquisition is one company takes over another (Hassan, Ghauri. and Mayrhofer, 2018). The objective of merger and acquisition is creation of wealth, economies of scale, improving organization's performance and accelerate growth. Advantage – It gives Vodafone various tax advantage, also provides the firm with opportunity of entering into new market. Also the company can get more skilled labour force. Disadvantage – It increases the prices of the products, sometimes prevents economies of scale. It also leads to culture clashes. Barriers or obstacles to globalization
When a firm takes decision to operate globally they faces various barrier s and obstacles some of them are discussed below: Restricting trade policies –There are various countries that put trade restrictions and also restriction to free entry. These restrictions promote protectionism and restrictions to free flow of products.To overcome this barrier the firm can choose different market which does not have so much of trade restrictions. The company can change the product and choose one on which there are no or less trade restrictions. Cultural barrier –It is one of the major barrier to globalization as it requires in-depth knowledge of the existing trend, suppliermarket channel in the foreign country. As business is to be done with different people who come from different cultures and efforts are needed to blend their differences.The culture barrier can be overcome by learning about the country culture in which the firm has to enter. They can also employ trainers and give diversity training to them to provide proper training and practising effective communication is the solution. Focusing on learning behaviour which means new cultures should be learned. Technological barrier -Technological barrier plays an important role in shaping the global trade as standards of the products are measured throughWTO standards and if the products clears all the testing then approval is given to enter the new market. There are various ways by which technological barrier can be implemented such as testing, certificate and other procedures.This barrier can be overcome by making the products which meet the standards prescribed by different agencies and also using advanced technology to win at it and also the company should invest into adopting new technology and tools. Tariff barriers –These are barrier in form of tax, duty or custom that the country puts on import of products for the purpose of revenue collection and also to protect domestic producers. There are various types of tariff barriers such as import tariff, export tariff, transit tariff, specific tariff, Ad valorem duty etc (Kinzius, Sandkamp. and Yalcin, 2019).To overcome this tariff barrier the firm can develop value added activities in the target market like in case of after sales services that will enhance the value of more expensive products or the firm can also partner with an organization which is their target market. Recommendations of how Vodafone Plc should adapt its organisational structure and decision- making processes Positive and negative aspect of the strategies to enter new market
Exporting Positive : Exporting is expansion of firm's market, economies of scale by greater production. Negative : Firm can loose focus from the home market and existing customers also there may be an increase in administration cost. Licensing and franchising Positive : Less cost of producing, promoting, packaging and selling of products, easy entry into foreign market. Negative : the firm likely to lose control over the products, franchise agreement dictates how to run the business, little creativity. Joint venture Positive:Combinedexpertiseofbothfirm,sharingofprofitsandrisks,nolongterm commitments. Negative : Conflicts may arise, leads to vague objective, lack of planning and research. Foreign direct investment Positive: Regional development, favourable balance of payment, employment opportunities. Negative : Presence of political corruption, trade deficit, inflation in the economy. Merger and acquisition Positive : Merging of power and control over the market, decrease in risk due to innovative techniques, competitiveness, tax benefit. Negative : Sometimes leads to duplication and over capacity, requires exhaustive re-skilling. The route that Vodafone prefers is merger and acquisition as it increases the capabilities and to attain economies of scale. Vodafone recently merged with idea to counter the growing presence of other competitor. This gives both the companies to gain a competitive advantage and larger market share. This also helps the firm to cut costs and helps in surviving. Vodafone should plan a new model which will be leaner, agile and more cost-effective to improve efficiency. Vodafone can adapt their structure and decision-making by analysing macro environment and also undertaking VRIO framework. Through proper R&D and applying various models the structure and decision-making can be adapted.
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CONCLUSION This report was concluded the key factors of markets, cost, environment and competition that drives from commerce and trade. Also, examined challenges strategies faced by organization in supported by global environment. This report also concluded the influences of globalization on leadership, culture, structure, function or organizational governance of global business. Also there is a great influence of ethics and sustainable globalization on organizational function. There aredifferent ways of decision making such as command, consult, vote and consensus. There are various ways to enter into the global market such as exporting, joint ventures, franchising, merger and acquisition,etc. And also there are various barriers to it such cultural, technological, tariff etc. also various recommendation were also provided on the ways in which Vodafone canadapt its organisational structure and decision-making processes.