Impact of Globalisation on Business Management

The provided assignment requires analysis of the concept of globalisation and its effect on business management, leadership, and culture within an entity. The student needs to examine different routes available for expanding business activities into new areas, taking into account the role of social networking, cloud computing, and e-commerce in a globalising business environment. This assignment is relevant to students studying international business or related subjects.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key elements of competition, market environment and cost that drive global trade and
commerce....................................................................................................................................1
TASK 2............................................................................................................................................3
P2 Complexity of strategic challenges that an enterprise faced during operate in global
environment.................................................................................................................................3
TASK 3............................................................................................................................................5
P3 Influences of globalisation on organisational leadership, functions and structure................5
P4 Influences of ethical and sustainable globalisation on organisational functions...................6
TASK 4............................................................................................................................................7
P5 Various ways in which decision making can work in a global context.................................7
P6 Different routes that can be used by an enterprise for internalisation...................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Environment refers to the external and internal factors that impact on functioning of a
business enterprise. Consider all the factors exist in business environment is very essential for
enterprise especially who operate on international level (Kasemsap, 2015). This support manager
in formulate better and effective policies for business and assists in reach set goals. Global
business environment refers to the environment in which various independent countries with the
elements of home environment, affect abilities, capabilities and decision making process of
entity. Global business environment is also classified into parts known as internal and external.
Social, political, economic and legal issues is all cover under the external environment.
Enterprise who operate on international level require to understand the social environment of
host country to operate their in an effective manner (Tokuoka, 2012). Today, large number of
MNCs companies are there that execute their commercial operations in different parts. Amtek
Plastics UK Ltd a plastic manufacture firm which operate in more than 15 countries is taken
under present report. Major factors of market and cost that impact the business operations of
entity operate on a international level is given in this report. Further, various routes that a firm
can adopt to internalisation its business operations is also detailed in this.
TASK 1
P1 Key elements of competition, market environment and cost that drive global trade and
commerce
When an enterprise operate on a global level then its business operations get affected
large number of factors exist in business environment. This must be considered by manager of
international firm while formulate business policies and decide future actions. Various factors
are there that impact operations of a business entity and affect its profits. Global business
environment and factors exist in that affect the business activities in both direct and indirect way.
For minimise the negative impact of element exist in global business environment, enterprises
formulate plans and policies (Aronczyk, 2013). Cost, competition, environment and market are
the major factors that impact operations of enterprise operate on international level. These can be
better understood by the given points:
 Cost: This factor indicate the money which a firm invest in its production process for
manufacture goods and services for satisfy the needs of its consumers. This consist whole
funds spent by entity in research and development, production and every cost which
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occur for produce the final product is all cover under this. Cost is further divided into two
parts:
Direct cost: This is a type of cost that completely attributed for production of some
specific goods and services. Further cost such as insurance, factory rent and many more is come
under this and this type of cost remain the same during whole process of production. All efforts
should be done by manager to control this type of cost for achieve efficiency in production
process.
Indirect Cost: This is a type of cost that are not direct accountable to a subject or object.
This type of cost can be variable or fixed. Personnel, administration and security cost is all cover
in this. Mainly this type of cost are not relate with production of products.
 Market: This is refers to a place which consists variety of organisation, social relations,
infrastructures and institutions where all parties involve in the process of exchange
(Kasemsap, 2014). In this various parties may involve in exchange of good and services,
various marketers depend on selling their services and goods to buyers in exchange of
money. Market is also classified into following points:
Perfect competition: This is a market structure under which small firms compete with
each other. In such type of market no single entity have any significant power to attract more
customers towards its product.
Monopolistic competition: Under this market structure, small business firms compete
against each other like in the case of perfect competition. But firms in this type of competition
sell similar products with some different features. This is the main factor that give a little power
to the firms to charge a higher prices form its consumers.
Oligopoly: This is a market structure which is dominated by small number of firms. In
this companies either compete against each other or collaborate. With their collative efforts
enterprise have the power to increase the prices and generate more profits.
Monopoly: This is under type of market, in this only a single business entity control the
whole market. In this, enterprise have high level of power as consumers do not have any
alternatives. Environment: This aspect highlight the surroundings in which a business enterprise
execute its business operations. Variation in the factors exist in environment directly
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impact on profits and productivity of entity (Briscoe, Tarique and Schuler, 2012). This is
further divided into two parts:
Internal environment: This factor highlights all the elements that exist inside the
enterprise and impact its business operations. Employees. Suppliers, organisational culture,
structure and policies is all cover under this. All efforts should be done by manager to control
these factors so they can contribute more in growth of business.
External environment: This indicate the environment exist outside the business
organisation. Mainly this consists political, legal, technical and environmental issues. These
elements require to be consider by the manager while execute business activities.
All these are the major factors that drive trade and commerce for entities. Issues related
with these factors and variation that take place in all these provide an opportunity to firms to
promote their international business activities.
TASK 2
P2 Complexity of strategic challenges that an enterprise faced during operate in global
environment
Enterprises who operate in various areas of globe get affected by the different elements
exist in that specific area. Rules, regulation and culture are the major elements that impact on
business activities (Peng, 2016). Overall operate in a global competitive environment is not a
easy task for an enterprise as every entity face large number of challenges during this, main
challenges faced by an entity while operate in global environment can be understood by the
following points: Currency rates: Fluctuation taken place in currency rate serve as one of the biggest
challenge for enterprises who operate on a global level. To reach set goals and to
generate large amount of profits, it is very essential for Amtek Plastics UK Ltd to
monitors the exchange rates as with this, company can take better and effective decision
related with expand it business operations. Political risk: This is known as one of the major and significant risk factor that a firm
face while operate in a international environment (Simic and Dimitrijevic, 2012) .
Government of every nation introduce rules, regulations and laws for control business
activities in that area. If a enterprise wants to expand its business operations in that area
that it remain adhere to follow the policies and rules introduce by government. Further,
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variation in rules of government, change in government and many more also affect the
business operations. For example if Amtek Plastics UK Ltd wants to expand its
business activities in a new area then it has to take the permission from the government
of that area. Differences in culture and language: Difference in language used in host and home
country and culture exist in both countries is serve another challenge when a firm
execute its commercial activities in global environment. Due to difference in language
used, it become difficult for the company to interact with local people of host nation and
attract them towards their products (Laudon and Laudon, 2015). Further, difference in
culture in another factor that impact business activities. In get solution of this kind of
problem, manager require to carry out research in order to collect information about the
culture, attitudes, behaviour and beliefs of local people. Further firm can hire local
people for communication. In this way, Amtek Plastics UK Ltd can expand its business
operations in new areas. Regulation and laws of host country: Laws and regulation exist in the nation in which
entity wants to expand its operations serve as another challenge. Before choose the
country in which Amtek Plastics UK Ltd wants to operate, it is very necessary for
company to identify and analyse the regulations exist in that nation. This support
manager in formulate business policies and strategies accordingly and support the
process of internalisation (Black, Morrison and Gregersen, 2013). Further when legal
bodies and government introduce a variation in these laws then this also impact on
business activities. For example, if government increase the tax rate then it become
difficult for Amtek Plastics UK Ltd to expand its operations. Competition: Today large number of suppliers of every type of product are exist in
market. Various efforts are done by all organisations to attract more customers and
satisfy their needs. In this kind of situation, it is very difficult for Amtek Plastics UK
Ltd to expand its business activities in new areas.
 International accounting: This is one of the most significant aspect that require to be
consider while operate on global level. Various tax system, rules and requirements make
the accounting activity a complex task for multinational firms.
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Company can easily adopt the international strategy so that they can easily
internationalize the activities and operations at international level. Thus firm can become very
famous in many countries.
It can adopt cost leadership strategy so that it can maintain good position in market. Thus
it keeps low prices for products.
Value chain and supply chain are used in which company can perform primary and
secondary activities. In primary activities company can easily perform tasks such as collect raw
material and secondary incudes the supporting activities so that they can enhance the operations.
Company can follow proper ethics and governance structure so that they can easily
maintain cooperation and coordination level in the company. Through proper ethics they can
maintain discipline level in firm.
Company should follow all rules and regulations and adopt cost leadership so that it can
attract many customers in limited time. This results in enhancing the market share.
TASK 3
P3 Influences of globalisation on organisational leadership, functions and structure
Process of internalisation is a complex and lengthy one and whenever a business entity
expands its commercial activities in other areas then various factors exist in business
environment impact its operations (Cavusgil and et. al., 2014). All this affect the functions,
structure and process of leadership. In this situation, for increase the effectiveness of decision
making process and to handle complex situation, enterprise require and formulate and adopt a
strategy so it can handle all business operations. Overall process of globalisation impact various
business process and factors as given in the following points: Leadership: Globalisation is a process of globalising the development of economy of a
nation with help of free flow of capital, tapping the foreign labour market and with help
of free trade. It is very essential for manager of business enterprise to show their
knowledge about business, they should have information about the cultural sensitivity
and awareness and they must show courage and their commitment towards the
globalisation. Any individual can become a good leader but process of globalisation
requires high determination of success in an individual to become a successful leader. As
business activities are changing, leader should also do efforts to find effective ways to
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adopt those changes. It is very important that leader of Amtek Plastics UK Ltd to have
the ability to be open minded to new beliefs, cultures, thoughts and ideas as this support
the entity in being forward. Process of globalisation has changes the way in which
should be conducted and how to lead a complex business enterprise. Overall positive
leadership and managerial skills support entity in accept challenges such as complexity,
confusion and many more. Organisation structure: Globalisation is a factor that largely affect the process which an
entity use to carry out its activities. In earlier times, traditional forms of communication
were used by firms which are not effective today (Savrul, Incekara and Sener, 2014) .
Due to large number of differences in the host and home country, firms require to adopt
effective organisation structure through which it can achieve its set targets. Structure of
entity should be that which ethical execute of all activities and support in growth of
business as well.
 Functions and culture: Various functions are there that are which performed by an
entity such as marketing, HR, selling, distribution and many more. When a firm
globalise its activities or start operating in other areas then it largely impact on its
function and culture. For better satisfy the needs of local people of host country, Amtek
Plastics UK Ltd require to adopt their culture and carry out business activities
accordingly. Further functions of entity require to executed accordingly so corporation
can achieve its set objectives.
 Impact of globalization on functions: In this company can easily recruit and select staff
members and thus they can easily maintain coordination. If the operations are done at
global level then company can easily perform all activities and tasks in effective manner.
Positive and negative impact of globalization: There is a situation that company is
internationalize their operations. It has both positive as well as negative impact. For example it
can reduce the disparities in rich and poor nations. There are no exploitation of resources. It leads
to increase in wealth and world economic growth.
Governance and leadership: It means the global practices which are performed by the company.
There are many global issues which are faced by company. Governance is the rules and
regulation that are created by Govt. It can impact the plans and policies of organization. It also
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influences on organization structure. Thus, top middle and lower level has to follow the rules of
Govt.
There is a learning culture in which all staff members can easily learn about plans and policies of
company.
There is a collective organization in which staff members and manger together works and take
the decision. This results in effective and efficient decisions.
There are many gender issues in firm due to which work is hampered.
Company can adopt diversification through which it can easily diversify their operations and
activities and through this they can also increase their levels in the organization.
All these are the main factors that get affected by globalisation. For achieve success, it is
very essential for Amtek Plastics UK Ltd to adopt changes as required by the situations.
P4 Influences of ethical and sustainable globalisation on organisational functions
Ethical and sustainable globalisation is the one that encourage enterprise to carry out
business activities in ethical manner and take decision that is beneficial for both company and
consumers. One of the main benefit of this is that it supports in create a positive image of entity
in marketplace and increase the sale of its products (Wild, Wild and Han, 2014). As Amtek
Plastics UK Ltd wants to expand its business activities in new areas so various issues are there
that enterprise will face. It is essential for entity to handle those issues as with this it can keep a
positive environment at workplace and can fulfil the needs of customers. Overall concept of
ethical and sustainable globalisation impact various functions of an enterprise as given in
following points: Consumer confidence: Whenever a business expand its activities in new areas and
offer product to individuals of other country then sale of company's product get
affected by the brand image of company. As Amtek Plastics UK Ltd is a small medium
entity so it will become difficult for entity to attract large number of customers towards
its products. In this condition, with support of ethical globalisation company can focus
to offer better and quality products to its customers. This will support firm in create and
maintain positive image in market. Ensure ethical selection and recruitment of candidates: One of the main benefit of
sustainable globalisation is that it encourage ethical recruitment and selection of
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individuals. This encourage firm to adopt legal practices of recruit a candidate for
perform business activities (Ferraro and Briody, 2017). Enterprise require to go with
the policies, laws and regulations given by government of country. All this support
entity in hire skilled candidates for fill vacancy. Concept of ethical globalisation
discourage child labour which is illegal. Promote positive environment at workplace: One of the main benefit of ethical and
sustainable globalisation is that it encourages manager in right decisions and actions.
This ensure fair recruitment, selection and compensation of candidates. All this support
in create and maintain healthy environment at workplace which encourage staff
members in perform their roles in an effective manner and contribute in success of firm
as well.
 Support in maintain health and care: Ethical business practices support manager in
take care of its employees, consumers and environment as well. This support Amtek
Plastics UK Ltd to use raw materials that are environment friendly and along with this
support the use of safe equipment for maintain the safety of individuals at workplace.
Overall concept of ethical and sustainable globalisation support manager in execute
ethical business practices in ethical way which encourage large number of individuals to go with
company's product. With all this Amtek Plastics UK Ltd can easily achieve success and can
reach its set goals.
Through ethical and sustainable globalisation functions and activities can be run properly. Thus
as a result they can easily enhance the profits. As activities run fairly then functions can run
smoothly and successfully.
Organization can enhance the reputation by following the ethical globalization practices. They
can also beat the competitor.
 Honesty: Company has to fairly and honestly follow all rule and regulations so that they
can easily perform all activities in effective manner. Thus production manger should
carefully and honesty create products. Marketing cannot sell false and quality goods to all
users.
 Accountability: In this employees can suitable to all manager so that they can perform
activates under manager. Employees are accountable to manager.
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TASK 4
P5 Various ways in which decision making can work in a global context
Decision making is known as the process in which various decisions are taken by firm to
fulfil the requirements of its customers and to generate more amount of profits. This process gets
affected by large number of factors. Identify and analyse those elements is very essential for
Amtek Plastics UK Ltd as this support firm in formulate better strategies and support in achieve
set target. Various tools are there that an entity can use to take better decisions. As Amtek
Plastics UK Ltd wants to expand its business activities so take right and better decision is very
essential for company. Right decision ensure effective execution of business enterprise and at the
same time support in satisfy the needs of customers (Voegtlin, Patzer and Scherer, 2012) Before
take any decision, all the elements exist in external environment should be consider by firm.
Mainly there are two methods of decision making that can be used by Amtek Plastics UK Ltd as
given in following points: Programmed decision making: Every enterprise take number of business related
decision on daily basis for execute business operations and to make products as per the
requirements of target market. It is very essential that routine decision of every business
should be taken in an effective manner as this contribute in overall growth and success of
firm. For this Amtek Plastics UK Ltd can develop and use mechanism to examine the
effectiveness of decision. All complaints of consumers should be properly addressed and
operations should be execute in an effective manner. With this, firm can achieve its set
goals and objectives in an effective way and can attain it main goals of globalisation.
Overall in this type of decision making method firm analyse every aspect and then take a
final decision.
 Un-programmed decision making: This is another method of decision making, in this
company face complex situations and take decision at sudden. In this manager does not
have the enough information to take decision related with business. Under this decision is
taken by manager on basis of logics.
So whenever a business enterprise internationalise its business operations then various
decision are taken by it. When company operate on a global level then various factors are there
that impact its operations and most of changes take place on a fast speed and in that kind if
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situation company choose un-programmed decision making for survive in business environment.
In order to survive in competitive business environment and to achieve its set goals Amtek
Plastics UK Ltd require to formulate and implement better strategies.
Steps in decision making:
Identify decisions: Company can easily determine decision.
Take relevant data: Company can easily gather important data and information.
Identify alternatives: Company can easily determine the alternatives which are involved in
decisions.
Weigh the evidence: In this step company can weigh the evidence which is involved.
Choose among alternatives: Company can select a option among various alternatives.
Take action: Company can take action to implement alternatives.
Review decision: Company evaluate the decision and take corrective actions.
Company can follow the rational decision making in which they can take correct decisions.
Policies: Company must create effective polices so that decisions prices can be made easier.
Technology: They can use effective technologies so that company can take efficient decisions.
P6 Different routes that can be used by an enterprise for internalisation
Various modes are there that can be used by an enterprise to enter into global market.
These can be understood by the points given as follows: Licensing: This is one of the most popular method that can be use by firms to expand its
business activities in new areas. In this, an enterprise charges a fee or royalty fees from
the other individuals who use firm's technology. International agents: Agents are known as the individuals that market the product of a
company on its behalf (Popescu, 2013). They do not take the ownership of products and
charge a percentage of commission on the goods sold by them. Single agent represents
more than one enterprise at a time. Strategic alliances: This aspect indicate the series of various relationship among the
enterprises that operate on global level. Sometimes this show the relationship among
rivals. One of the main feature of this is that every company remain separate in this. Joint ventures: This is another mode to enter into international market and this is based
on equity. In this parties own a proportion of new business. Gain a competitive entry in
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foreign market and access to technology or management skills of other is known as one
of the main reason behind this.
 Exporting: Under this enterprise do a promise with the local people of host country and
given them a commitment on its own behalf. One of the main benefit of this is that it
provides a great control to entity over its brand.
All these are the major strategies that can be used by Amtek Plastics UK Ltd to
internalise its business operations or to enter into international market. Various obstacles and
barriers are there that a company face during globalisation as given into following points:
 One of the major cost that a firm face during expand its operations is cost. Operate
business activities in other areas require huge amount of funds to be invested in
technology and resources. Lack of funds create unnecessary delays and does not provide
effective results to firm. So it is very essential for Amtek Plastics UK Ltd to have
adequate amount of funds to expand business operations in new areas.
 Culture and language is also known as barrier. Due to difference in language of ghost and
home country, enterprise find it difficult to communicate with local people of host
country. It is very essential for Amtek Plastics UK Ltd to identify and examine the
culture exist in host country for make products as per their specific requirements and to
achieve success.
 Technology is known as another obstacle that affect the globalisation activities of an
enterprise.
Routes
Merger: Company can merge with another company enhance their operations. It creates a single
company.
Joint venture: In this two company share profits and losses with each other. It is crucial so that
company can increase their operations.
Acquisition: Company had acquired another company so that they can increase their activities’.
Corporate strategies
Globalization: Company can increase their operations at their international level.
Barriers:
Quotas: Company can sell limited goods to other internationals countries.
Tariffs: Taxes which are applied by company and thus it hampers their operations.
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CONCLUSION
From the above given project report, it can be summarised that global business
environment is a mix of various internal and external factors that affect the business activities
and operations of a company. Whenever a business firm wants to expand its business activities in
new areas then all elements such as political stability and economic conditions exist in that
country should be examined by firm. Large number of barriers are there that an entity faced
during process of globalisation and for this effective policies required to be formulated and
implemented by the entity. Large number of elements are there that impact trade and commercial
activities of company. Further concept of globalisation affect the management leadership and
culture follow by entity. Every aspect related with globalisation required to analysed by Amtek
Plastics UK Ltd as this affect the decision making process of entity. Different routes are there
that can be opt by firm for expand its business activities in new areas.
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REFERENCES
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emerging digital technologies on leadership in global business, pp.183-201.
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Simic, V. and Dimitrijevic, B., 2012. Production planning for vehicle recycling factories in the
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Tokuoka, K., 2012. Does the Business Environment Affect Corporate Investment in India? (No.
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Voegtlin, C., Patzer, M. and Scherer, A.G., 2012. Responsible leadership in global business: A
new approach to leadership and its multi-level outcomes. Journal of Business Ethics.
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Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
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