Importance of Globalization and Business Environment

The provided document is an assignment that emphasizes the significance of globalization in business development and market reach. It discusses how companies can achieve competitive advantage through effective use of globalization and identifies the importance of conducting PEST analysis to overcome external challenges. The document provides references from various books, journals, and articles on global business management, cross-cultural perspectives, and international business strategies.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1Analysis of key factors of cost, market, environment and competition which drive global
trade and commerce....................................................................................................................3
TASK 2............................................................................................................................................5
P2Explanation about complexity of strategic challenges faced by the organization while
operating in a global business environment................................................................................5
TASK 3............................................................................................................................................7
P3EvaluatIon of the influences of globalisation on organisational governance and leadership,
structure, culture and functions. .................................................................................................7
P4Evaluation of the influences of ethical and sustainable globalization on organizational
functions......................................................................................................................................8
TASK 4..........................................................................................................................................10
P5Evaluation of the different ways decision making can work effectively in a global
environment...............................................................................................................................10
P6 Determination and articulation of the various routes to internationalization an organization
may adopt including key barriers..............................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
.......................................................................................................................................................13

INTRODUCTION
Global business environment refers to the environment in which different sovereign
countries operates, with those specific factors exogenous to the home environment of the
organization. In addition to this such factors directly influence decision making on resources uses
and capabilities. (Adekola, 2016)The company which is being taken into consideration is
Mecserflex Manufacturing company which is one of the leading UK and European
manufacturing company. In addition to this it is one of the food service and catering industry as
well as flexible catering gas connector and house industry. Moreover this file explain about the
ket factors of cost, market, environment and competition which has driven global trade and
commerce in the marketplace. Additionally this assignment focuses on the complexity and
strategic challenges faced by the company. In addition to this a brief evaluation of the influence
of globalization on organizational governance, leadership and on structure is also explained in
this file. Lastly, evaluation of the influence of globalization on organizational decision making
and strategy is also specified in this report.
TASK 1
P1Analysis of key factors of cost, market, environment and competition which drive global trade
and commerce
In modern era all most every organization wants to expand and enhance their market
share in all over the world whether it is as retailer or a manufacturing industry. Operating
business globally helps the organization in achieving greater profitability ratio as compared to
the domestic manufacturing industry. However it is not an easy task to carry out operational
business out of territorial region so it is very necessary for the manger of the organization to
carry out an analysis on various factors which may become hurdle in the path of achieving aims
and objectives.(Boshyk,2016) Factors may be supplier, customers, political, economical and
many more. Such factors greatly impact upon organization brand image both positively and
negatively. Manager of the Mecserflex company is planning to enhance it market globally all
around the world as it it one of the leading UK manufacturer and supplier of flexible catering gas
connectors and hoses. Thus, in order to expand business globally manger of the industry should
make an proper analysis of the market situation of target market and other factors so as to get

profitable outcome. Therefore there are some of the factors which the manger should take into
consideration before expanding its business globally and they are explained below.
Cost: It is one of the crucial factor which the manager of Mecserflex company should
take into consideration before expanding business at a global level. As this factors impact on
each operational activities of the business. So the manager of the firm should raise funds through
various sources like through loans from NBFC's or banks or through seed investment funds and
many more ways so as to carry out its operational activities smoothly without any hurdle. In
order to carry out business globally manger of the company should identify various component
which may helps in decreasing the manufacturing cost. Additionally the manger should also
analyse and evaluate the economic and political condition so that purchasing power of the
individuals can be measured. Thus, it will help the company in identifying whether the opening
outlets for the target place is proved to beneficial or not in the form of increase in the
profitability ratio of an organization.
Market: In order to formulate the effective and efficient strategy it is very essential for
the manager of the Mecserflex company to make proper analysis of various market component
and situation affecting and rendering profit to the company. It is very much essential for those
companies who wants to expand their market area in other foreign nations. Factors which the
manger of the company should analyse are purchasing power of individuals, taste and
preferences of the society, competitors marketing pricing strategies and many more factors as
these factors greatly impact upon productivity and profitability ratio of the business in both
positive and negative manner. So in order to expand business globally manager of Mecserflex
company should analyse the cultural differences that is taking place and which differ from nation
to nation on the basis of their life styles, taste and preferences pattern. As the Mecserflex
company specifically deals in catering food services, so manger of the industry should make an
analysis regrading the changing taking place in different styles of catering food services and the
demand the way customers want that they should render services. Thus, it will help the firm in
achieving maximum profit for the organization.
Environment: In modern era there take place rapid development in the technologies
which greatly impact upon organizational profitability ratio. So its the prime responsibility of the
manager of Mecserflex company to manufacture products using those technologies which doesn't
harm workforce and the society. Like the company uses stainless steel and brass components so

as to ensure longest life possible as well as to improve hygiene standard. In addition to this
management of the industry should also ensure to make use of advance technology so as to
minimize wastage of resources. Thus, it will helps in boosting up the production level and will
result in increase in the level of profitability ratio of an organization.
Competition: A company can expand its business globally only if it gives stiff
competition to its competitors in the market place. So in order to enhance its business manager of
the Mecserflex company should make a proper analysis of the strategies and policies that the
competitors are using so as to attract large number of customers and to achieve competitive edge
in the marketplace. This will helps the company to make best strategies and policies accordingly
in order to achieve competitive advantage in the marketplace.
TASK 2
P2Explanation about complexity of strategic challenges faced by the organization while
operating in a global business environment
In order to increase the sales revenue and profitability ratio, the company should expand
its business operation at a global level. So before developing the business at the global level
manger of the Mecserflex company should make improvement in the production process and on
the structure of an organization. In order to gain high achievement in business manger of the
company must formulate and implement effective strategies and policies by analysing the change
in the needs of customers as well as the changes taking place in the marketplace. Additionally if
the business wants to operate globally then the company should analyse needs and demand of
international clients and should manufacture products as per their choices. In addition to this,
manager of the Mecserflex company should adopt the strategy of segmenting the marketplace in
respect of similar characteristics. Thus, it will help the company in identifying the needs and
culture of each segmented marketplace(Caiazza, 2017).
Moreover, there are various strategic challenges which are faced by the organization
while carrying out business globally. Challenges in the form of different culture of society,
taxation policies, changes in economical and political factors and many more. So in order to
overcome the challenges company have to mould its policies and strategies accordingly. Thus, it
will help in manufacturing high quality and wide range of products which as a result will help in
attracting and retaining more number of customers towards their products and services. Hence

there are two strategic challenges which are faced by the Mecserflex company and are
explained below:
Customers expectation: It is one of the strategic challenge which all most every
company faces. So in n order to increase the sales revenue it is very essential for the Mecserflex
company to analyse and to identify the needs of international clients and their culture. So after
identification manager should manufacture products as per the demand of the customers and
should deliver them on a affordable price to the final customers. After delivering the products
manager should get the feedback of the customers in respect of their preferences , likes and
dislikes about the products and services. In addition to this manager should also interact with the
customers who have consume their products and who belong from different nations and
locations. Thus it will helps in knowing about whether the products and services rendered to
them is as per their demand or not. If not then they can make some improvements so as to
satisfy customers in future. Thus, it will helps in boosting up of company brand image in the
marketplace.
Cost: It is the second challenge which the company faces while carrying out business
globally. So in order to operate business at a global level company have to pass through long
procedure which consist of planning operational activities, implementing those activities and all
this process require lot of documentation process.(Wood, 2015) Therefore to carry out business
globally in an effective and efficient manner company require lot of funds. As lack of resources
and capital will become a barrier in the path of achieving target result. In addition to this manger
of the Mecserflex company adopts the skimming pricing strategy if the cost in incurred in the
production process is high. Thus, it result in losing more number of customers. So the manger of
the industry should ensure proper and optimum utilization of resources in order to render
products to the customers at their affordable price. Thus, it will not only helps in attracting more
customers but also helps in retaining clients. Therefore it will helps in accomplishing
organizational aims and objectives on a specified time period.

TASK 3
P3EvaluatIon of the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
Globalization is the process of interacting with peoples, customers and governments
worldwide. In addition to this it can be defined as integration of national economy through the
flow of capital, labour and services. (Cavusgil, 2015)Specifically company tries to operates its
business only in those territorial region where the economic conditions is good and sustainable.
Thus, it helps in increasing the sales performance of an organization. While carrying out business
globally creates much impact upon leadership, corporate governance, business structure, culture
and on the different operational activities of the companies. Here organizational governance is
defined as the process, rules and regulations under which the company have to operates its
different operational activities. So in order to control function of the enterprise, working
environment of an organization manger of the Mecserflex company has to set some rules and
regulation and should carry out it business as per framed policies by the government. Therefore
there are certain factors which are affected by globalization and are present within the firm and
they are mentioned below:
Leadership: In every organization leader and the manager plays an important role
without them company cannot achieve its market share at a global level. As they are the one who
influence the workforce of an organization to give their best so as to achieve better outcome for
the organization (Smith, 2016). The global organisations provide training and development
session to the workforce so as to develop their knowledge and skills as per the changes taking
place in the modern era. In order to develop business globally manager of the Mecserflex
company have to set strategies,policies, vision and mission accordingly. Thus, because of such
changes leadership activities get affected and the opportunities for practising different are
reduced which will also effect the productivity of the firm. So in order to over come such
challenges there is the need of leader who by using different style of leadership like participative,
democratic and many more can influence the workers to work for achieving aims and objectives.
Structure: Organization structure is also one of the important aspect which get
influenced while carrying out business globally. (Rowell,2017)As its the main responsibility of
the manager to identify the changes taking place in the global economic and political conditions
and accordingly have to set the organization structure, culture and policies. So in order to gain

competitive advantage in the marketplace manager gave to recruit and select candidates of
diverse culture from different nation so that they can easily carry out their business globally
without any hurdle. Thus, recruiting candidate from different nations will helps company to
easily identify the needs and demands of the international clients. Moreover it will also help the
company to achieve the set and target objectives in an effective and efficient manner
Cultural: Organization culture also get influenced while carrying out business globally,
As when new candidates who belongs to different culture and background are recruited by the
manger of the Mecserflex company it impact on the organization culture.(Perry-Kessaris, 2016)
So in this case there may arise conflicts among the employees, so manger of the industry should
make better coordination and corporation among all the new and old members of an
organization. Thus, it will helps in achieving good working culture environment within the
organization. Its the prime responsibility of the manger to provide friendly and flexible working
cultural environment in order to motivate and influence worker to work for the company in
achieving aims and objectives of an organization.
Functions: In order to carry out business globally in a new region manager of the
Mecserflex company will need to makes changes in their different functional activities
accordingly. Such changes is based on the evaluation of the marketplace and accordingly
company have to start its production process so as to satisfy customer. Thus, it helps in
increasing the maximum profit for an organization. Moreover its is also essential for the
company to manufacture and to create alteration in the production process so as to retain and
attract more number of international and domestic customers toward their products and services.
Thus it will helps in maximizing the profitability and sales revenue of an organization.
P4Evaluation of the influences of ethical and sustainable globalization on organizational
functions
Globalization plays an essential role in the overall development of an economy as well as
in the development of an organization.(Deasy, 2016) It is defined as the exchange of goods,
services, people and capital from nation to nation by removal of tariff and non tariff barriers. So
in order to carry out business at a global level manger of the Mecserflex company should carry
out its business ethically and it can be done by setting rules, norms, strategies and policies in an
ethical manner. As ethics within the organization also helps in creating positive influence in the
minds of the workforce and because of which they will carry out business operational ethically

and helps in achieving better outcome for the company. As the Mecserflex company wants to
expand its market share by carrying out business globally so it is the prime responsibility of the
manger of the company to understand the legislation, legal and political laws of different nation
in which the company in planning to expand its operations. Thus, it will helps company to carry
out its operational activities legally and while carrying out its operational activities in different
nations company have to face certain issues like economical issues, political issues,
technological, cultural and many more. So it is necessary for the manger of Mecserflex company
to carry out PEST analysis in order to cope up with such issues.
Political: This are those factors upon which high degree of control lies upon government.
Factors like government policy, foreign trade policy, labour law, environmental law, stability and
instability in overseas market and so on.(Grosanu, 2015) So managers of the Mecserflex
company should need to determine the changes in such laws and must respond to the anticipated
and current future legislation for adjusting their policies and strategies accordingly so as to carry
out business globally without any hurdle.
Economical: These factors includes economic growth rate, exchange rate, interest rate,
disposable income of business and of consumers.(Peng, 2016) So manger of the Mecserflex
company should take into consideration all these factors and accordingly should mould its
strategies so as to increase the market share at a global level. Thus, it will helps in smooth
functioning of the business without any hurdle.
Social: These factors includes share beliefs and attitudes of the population, so manger of
the Mecserflex company should taken into consideration population growth rate , age
distribution, health consciousness and carrier attitudes of the society of different nation so as to
carry out business smoothly without any issues and difficulties.(Hamilton 2018) Thus, proper
study and analysis of marketplace of different nation will helps the company in achieving
competitive advantage in the marketplace.
Technological: In modern era there take place fast growing in the technological
landscapes and which indirectly impact upon organization production process.(Lewis, 2017)
Changes in the technological factors must be taken into consideration while operating business at
a global level. As because of such changes company have to adopts new ways of producing
goods and services and new ways of distributing goods and services. Thus analysis of such
changes must be done by the Mecserflex company so as to carry out business globally.

Thus, over all it can be concluded that manager of the company should make proper
interpretation and analysis of the market place through pest analysis in order to make smooth
running of business smoothly and to achieve high profit margin.
Influence of ethical and sustainable globalisation
When the businesses follow the professional ethics, then they can better perform their
business operations and activities in an effective order. When such ethical principles are not
followed properly, these can negatively impact the business operations and activities of the firm
and on the employees as well. Such ethics include equal pay to employees, equal treatment of
employees, ethical work without any duplicacy involved. Also the brand image of the firm will
increase when the operations and activities of firm are performed ethically. Managers of
Mecserflex needs to ensure that the ethical principles are followed properly otherwise the
success and sustainability of the firm will be effected adversely. The firm can gain sustainability
in the market when the business operations are performed ethically.
TASK 4
P5Evaluation of the different ways decision making can work effectively in a global
environment
In order to carry out business at a global level, manager of the Mecserflex company have
to take come crucial decision beside planning, organizing, financing , directing and controlling.
Decision specifically involves of two types they are explained below(Doh, and Ozaki, 2015):
Programmed decision making: This are the type of decision which are tried and tested
by the manager or by the leader of an organization so as to obtain better outcome in future. Both
the leader and the manager collaborate with each other while taking such decision taking into
consideration past performance of an organization. By collaborating with each other, Managers
and leaders of Mecserflex can take the decisions for expansion based on the past performance of
company when entered into new markets. They both can take effective decisions, when the
conditions and performance of the company is analysed. The decision making can adversely
impact the decsions making process when conflicts among the managers and leaders take place.
Un-programmed decision making: This are those decision which is taken due to the
changes taking place in the external factors which are not under the control of the company like
political, economical, technological etc. Thus, it is very essential for the manager of Mecserflex

to make an analysis through PEST so as to know about the changes that might take place in
future. Thus it will help in smooth running of business and will helps in increasing the
productivity of an organization in an effective and efficient manner. Also based on pest analysis,
they can take the decisions for the firm after analysing the impact of external factors on business
operations.
P6 Determination and articulation of the various routes to internationalization an organization
may adopt including key barriers
While carrying out business at a global level there take place various barriers so it is
necessary for Mecserflex company to identify those factor which create barriers and to resolve
them. (Ferraro, 2017)Thus, through proper identification and determination company can take
decision in an effective and efficient manner in order to expand business globally easily. There
may arise some obstruction in the process some of them are mentioned below:
 Lack of capital is one of the factor which create hurdle in running business globally. So
in order to overcome this barrier manger of the Mecserflex company can take loans from
convenience investors or banks so as to make investment in their firms and to achieve the
target objective without any hurdle.
 Second most important factor which can become hurdle in the path of running business
globally is cultural aspect. So its the prime responsibility of the manager of Mecserflex
company to take into consideration different cultural aspect of different nations so as to
carry out business at a global level in an economical manner.
Thus, while launch business in new market area and in different territorial region manger
of the company must develop some innovative products as per the needs and preferences of the
international and domestic clients. In addition to this company should also make proper analysis
of the changes that might take place in internal and external factors so that to achieve better
outcome for an organization.
Different route of internationalisation
Licensing: Licensing is a entry mode strategy which provides the rights to firm to sell its
product and services in a new country. Licensing includes copyright, designs, patents,
trademarks, etc. Licensing is mostly used in manufacturing sector in which firms can use the
technology and machinery and royalty payment will be given by the firm in return. Financing
international expansion can be done with the help of licensing strategy. This strategy eliminates

the chances of products in appearing to black market. It is necessary for manager of Mecserflex
to analyse the strategy before implementing it as this strategy is capable of restricting the future
activities of firm which can be proved as a advantage to competitors.
Direct exporting: The direct exporting is also another entry strategy which allows the
companies to sell their products and services in the new market. Through this strategy, company
can gain control of its operations and activities in the foreign market. Manager of Mecserflex
can use this strategy for expanding their operations in a new country. Through this, they can
control their activities and operations in foreign country.
CONCLUSION
From the above mentioned report it can be concluded that globalization plays an crucial
role in the overall development of an economy and of organization. Without globalization
company cannot market its products and services internationally. Thus, it also help in achieving
increase in the productivity and profitability ratio of an organization. In addition to this manger
should also carry out PEST analysis so as to identify the factors affecting the organization
operational activities. Thus, proper analysis of this factors will helps the company to overcome
the issues which may take place due to external factors like political, economical etc. Thus, it
helps in achieving competitive advantage in the marketplace.

REFERENCES
Books and Journals
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Routledge.
Boshyk, Y. ed., 2016. Business driven action learning: Global best practices. Springer.
Caiazza, R., Shimizu, K. and Yoshikawa, T., 2017. Cross‐border M&A: Challenges and
opportunities in global business environment. Thunderbird International Business
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Cavusgil, S.T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities
perspective on early and rapid internationalization. Journal of International Business
Studies. 46(1). pp.3-16.
Deasy, S.and et. al 2016. Controlling use of a business environment on a mobile device. U.S.
Patent 9,247,042.
Doh, J., McGuire, S. and Ozaki, T., 2015. The Journal of World Business Special Issue: Global
governance and international nonmarket strategies: Introduction to the special
issue. Journal of World Business.50(2). pp.256-261.
Ferraro, G. P. and Briody, E. K., 2017. The cultural dimension of global business. Taylor &
Francis.
Grosanu, A.and et. al2015. The influence of country-level governance on business environment
and entrepreneurship: A global perspective. Amfiteatru Economic Journal.17(38),
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Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
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Lewis, H.and et. al2017. Design+ environment: a global guide to designing greener goods.
Routledge.
Peng, M.W., 2016. Global business. Cengage Learning.
Perry-Kessaris, A., 2016. Global Business, Local Law: the Indian legal system as a communal
resource in foreign investment relations. Routledge.
Rowell, A., 2017. Green backlash: Global subversion of the environment movement. Routledge.

Smith, B., 2016. Nature and Geography: Tragic Voids within Marketing Textbooks and the
External Business Environment. In Global Perspectives on Contemporary Marketing
Education(pp. 47-64). IGI Global.
Wood, D.J., and et. al 2015. Global Business Citizenship: A Transformative Framework for
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