Influences of Globalisation on Organisation Structure, Culture, Governance, Functions and Leadership

This report evaluates the influences of globalisation on organisation structure, culture, governance, functions and leadership. It discusses the impact of globalisation on various aspects of an organisation and how it affects its operations and strategies.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Analysis of key factors of cost, market, environment and competition that drive global
commerce and trade....................................................................................................................3
LO2..................................................................................................................................................4
P2 Evaluation of complexity of strategic challenges that are faced by organisations in global
environment................................................................................................................................4
LO3..................................................................................................................................................6
P3 Evaluation of influences of globalisation on organisation structure, culture, governance,
functions and leadership..............................................................................................................6
P4 Evalution of ethical and sustainable governance on organisation functions.........................7
LO4..................................................................................................................................................8
P5 Different ways decision-making can work effectively in global environment......................8
P6 Various routes to internationalisation and its key barriers.....................................................9
CONCLUSION..............................................................................................................................10

INTRODUCTION
Global business environment have a major impact or infleunce on company growth and
operations as different countries have different environmental conditions, capabilities and resources.
Internal and external are two parts of global business environment so companies in order to sustain
its business for longer time frame needs to adapt to social-economic culture of different countries.
Globalisation and innovation in technologies have lead to better inter- connection between countries
and more trade of goods and services across worldwide in order to earn more profitability. This
report is about Ray C Smith that is family-onwed business established in 1973 providing
transportation and warehouse solutions. It have discussed about key factors of cost, market and
environment drive global commerce and trade. The report has covered some more points such as
strategic challenges faced by organisations, influences of globalisation on structure, culture,
governance and functions. At last it has provided information related to different routes to
internationalisation, associated or key barriers and several recommendations to overcome them.
LO1
P1 Analysis of key factors of cost, market, environment and competition that drive global
commerce and trade
Global commerce and trade refers to exchange or import and export of good and services
between countries or international boundaries. Factors of cost, market, environment and
competition that drives global trade and commerces are discussed below:
Cost: Company in order to manufacture or delivery products and services to end customer’s have
to incurred several cost. Key factors that influence cost are labour, cost of capital, raw material, land
and transportation that need to be considered by business in order to grow and sustain it for longer
time frame. Like RayC smith cost of production fluctuate as per availability or recent price of
resources, labour and transportation cost that is incurred to delivered right product to right
individual (Hopkinson and et.al., 2018). Thus, it can be stated that company by making best
utilisation of resources is able to reduce cost thereby export its services to various countries and
enhance its overall profitability. For example: Ray C Smith has makes use of low cost strategies by
hiring labour at lower wages, making optimum utilisation of resources in order to expand its
business operation thus contributed in driving global trade.
Market: There are numerous changes in external market or in which business operates its several
function so company needs to cope up with them in order to retained its competitive advantages.

Key factors of market that drive global commerce and trade are inflation rates, government policies,
taste and preferences of customer’s or changes in digital technologies. Ray C smith management
has considered all such market factors like recent innovation, customer’s preferences and
government policies that have contributed in expansion and growth of enterprise across worldwide.
Free trade policies have provided opportunities to Ray C smith to easily expand its business
operation across worldwide or enhance its overall sales volume. Increase more demand in
international market has also drive company to globally trade in order to enjoy high profitability.
Environment: Business operates its function in external environment that keeps on changing as per
situations and circumstances so companies to meet customer’s expectancy needs to modify itself or
changes its operations. Such as most of the people have became more concerned about thier health
and safety due to increasing number of diseases. At the same time they are moving towards
sustainable management of resources or preferring companies that provide products or services
without minimum harm to environment (Kasemsap, 2016). Ray C smith while operating its function
in losgictics has ensured that it makes best utilisation of resources so that maximum value can be
delivered to end customers. So, available of resources or environmental conditions have contributed
in expansion of global commerce and trade. Company through taking steps towards sustainable
management and practices can adapt to global environment and expand its business operation.
Competitive advantages: Companies in order to gain competitive advantages or increase its
profitability, plan several strategies such as ensure quality of products, or find innovative method
that can be used to delivered services to them. Therefore, company like Ray C smith to gain
competitive advantages have always tried to provide unique and qualitative services to several
individuals (Skripak, 2016). Ray C smith by investing capital in research and development
department can find new products or method to deliver services. Strong supply chain or more ware
house can helps company in gaining competitive advantages or quick delivery of services to
customers. Thus, competitive strategy has promoted global commerce and trade as people across
worldwide wants to have services or products of such companies.
So, it can be critically stated from above analysis that every factor have both negative and
positive impact on global business environment.
LO2
P2 Evaluation of complexity of strategic challenges that are faced by organisations in global
environment
It can be stated that global business environment is ever changing or dynamic in nature thus

it leads to complexity in development of effective strategies. There are numbers of risk, challenges
and complexity is involved in taking decision regarding appropriate strategies that can be used by
firm to enjoy more profitability (Kotabe and Helsen, 2020). Various strategies challenges that are
faced by Ray C smith in context of risk, diversification and supply chain while operating its
function internationally can be illustrated as follows:
Political complexity: It is difficult task for manager to understand or forecast whether political
environment of particular country will be stable in future circumstances or not. So, changes in rules
and regulation of government, tax rates indirectly increases complexity of strategies that are made
by firm to attained its predertermined objectives. Management of Ray C smith while expanding its
business in global market have to face challenges of formulating or deciding effective strategies that
can be used to gain advantages in particular market condition.
Economic complexity: There are numerous factors that are included in economic such as interest
rates, disposable income of people, employment rates etc. Ray C smith manager find challenges in
forming effective strategies that can be fruitful for various countries in which company operates its
business. There are fluctuation in exchange rates, interest rates so it become difficult or challenges
for manager to decide actual cost it have to bear in order to provide services to customer’s
(Shengelia, 2018). There are some countries that are facing economic slowdown such as UK thus
company is unable to decide appropriate course of action that can be taken for growth and success
of enterprise.
Social and culture complexity: Different countries have diferent social culture, lifestyles trends,
beliefs and value at the same time taste and preferences of people changes rapidly. So, it is
challenges for management of Ray C smith to formulate accurate strategies that can be used to
motivate each and every individuals to be part of firm for satisfaction of thier requirements. Thus,
its become difficult for management to choose standardise or customise strategies because of
diversity of customer’s preferences.
Technological changes: Different countries adopt to technologies at different period of time or
rates thus it become strategic complexity for firm to make use of specific technology in order to
deliver services to customer’s as per their expectancy level. There are some countries that have put
retriction to new technology or access to internet services in order to protect crucial information
(Alcácer, Cantwell and Piscitello, 2016). Thus, management of Ray C smith find difficultly in
selecting particular strategies or technology that it can use to deliver qualitative services to
customer’s.
Environment issue: Digitalisation and globalisation have increases awareness among individuals
about sustainable management of resources so that it can be available for future generations.

Environment laws is recognised at international level but has not be equally implemented so firms
such as Ray C smith face challenges in selecting strategies that could helps in protecting
environment.
Legal complexity: There are several legal system prevailing in different countries so company that
have global expansion needs to adapt to all legal laws in order to grow and sustain business for
longer time frame. At the same time there is diversity of international law, thus management find
challange in indentifying law that exist in particular country. (Lasserre, 2017)
Therefore from above analysis, it can be critically understood that high financial risk is associated
with business that is operating at global level. Due to diverse and dispersed participants,
management find difficult in finding effectively global supply chain that can deliver products to
customer’s within limited time and cost. So, firm is not able to identified appropriate course of
action it can used to diversify its business in several market to retained its share.
LO3
P3 Evaluation of influences of globalisation on organisation structure, culture, governance,
functions and leadership
Globalisation have directly or indirectly impact on culture, governance, functions structure
and leadership of organisations. The way globalisation impact on culture can be understood through
using hofstede dimensions culture, impact on goverance through management team model etc. Such
as:
Hofstede culture dimensions theory
Power Distance index: Ray C smith have low power index as company in order to coordinate
diverse employees that are working in different stores present in various countries have
decentralised decision-making responsibilities (Meza-Ruiz and et.al., 2017). So that management by
decentralising decision making is able to take accurate and timely decision as per situation or
conditions of particular country for survival of firm.
Individualism VS collectivism: It can be stated that globalisation lead to coordination of different
people thus Ray C smith has always emphasis on WE rather than I that have lead to delivery of
qualitative services to customer’s. The impact of We culture is that employees of Ray C smith are
motivated and influence to work together as a team for achievements of common goals.
Uncertainility avoidances index: As there are number of changes in external environment, so
employees and management of Ray C smith have more capabilities or high tolerances level to

accept risk and uncertainty. Thus, company can easily adapt to external changes as employees rather
than resisting, are ready to accept changes so that they as well as company can gain maximum
benefits.
Masculinity vs Femininity: Globalisation lead to masculinity organisation roles as there is distinct
gender roles, concentrated on wealth building and material achivements due to more high
competition. So, it create a culture there is huge difference between males and female therefore
manager of Ray C smith ensures that equal opportunities are provided to all. Company by providing
equal opportunities have contributed in enhancing overall performance and productivity level of
each individual within organisation.
Long and short term orientation: Company while expanding its business in international market
have focused on long term goals rather than short terms. Thus, Ray C smith have make use of more
persistence, perservative strategies for growth and sustainability of enterprise for longer time frame
(Boshyk, 2016).
Indulgence vs restraint: It can be stated that globalisation contributed in development of free
gratitude related culture in organisation which state that people wants to enjoy their life and have
more fun.
Globalisation also has impact on leadership as there are sudden changes in external
environment that directly impact on growth and strategy of business. Leaders needs to adapt their
strategy as per external environment so that company can gained competitive advantages and earn
huge amount of profitability (Ajagbe and et.al., 2016). Therefore, leaders needs to changes its styles
as per people, social culture, value and belief of people so that they are motivate to work hard for
growth of Ray C smith.
Organisation structure define particular task and responsibilities or rules, procedure that need to
be performed by specific individuals or the way information will be exchange in firm. As Ray C
smith expand its business in global market it needs to make modification in its organisation
structure so that company can easily adapt changes and achive its goals. Company choose
organisational structure on basis of its strategy and objectives such as Ray C smith has divisional
organisational structure that means each division perform specific task that is coordinate at centre.
Therefore, as per global environment company have to changes or modify its organisation structure
so that needs of customer’s can be meet.
It can also be stated that corporate governance and functions are also impacted by
globalisation as company needs to amend its rules, regulation and decision as per policies, rules and
regulations of specific countries, taste and preferences of people (Heisig and et.al., 2016). So that it

can sustain its business for more time period and enjoy huge profitability.
P4 Evalution of ethical and sustainable governance on organisation functions
Organisational ethics are procedure and policies or values or type of culture that promote
right activities or things such as no discrimination among employees. All individuals are given
equal chances or opportunities to share their views, ideas or supportive work culture so that they
can put their best efforts for growth of firm. On the other hand sustainable goverance is terms that
state company is highly commited towards its interested stakeholders such as customers, supplier,
employees and shareholders etc. The way ethical and sustainable governance impact on
organisation function can be illustrated that it contribute in building positive work culture, enhance
confidence level of customer’s or improve performance of company. There are number of function
performed by organisation such as marketing, finance and production or delivery of services to
customer’s (Zhu and Lee, 2017). Ray C smith by promoting ethical and sustainable governance is
able to motivate employees to improve their overall performance and productivity so that company
can gain competitive advantages. Various impact of ethical and sustainable governance
implementated by Ray C smith on organisational function can be stated below:
Helps in enhancing organisational function: It can be stated that ethical and sustainable
governance of Ray C smith helps in retention of maximum number of individuals within
organisations. It also helps in enhancing their motivation level thus contribute in delivery qualitative
services to end customer’s. Such as production and other department of firms are clearly aware of
flow and implementation of decision across department thus it helps in better functioning or
coordination of various departments of enterprise.
Impact on marketing function: Marketing manager of Ray C smith is infleunced from ethical
and sustainable globalisation goverances function as it make create awareness among customer’s
that company abide to all ethical values while operating its function (Varzandeh, Farahbod and Zhu,
2016). Thus, it helps marketing manager to easily attract existing as well as new customer’s within
organisation so that it can enjoy high profitability.
Thus, it can be stated that ethical and sustainable globalisation governance contribute in
satisfaction of customer’s in effectively manner and enhancement of company profitability.
LO4
P5 Different ways decision-making can work effectively in global environment
Manager is responsible for taking all crucail decision of organisation so that it can expand

and retained its market share for longer period of time. Global environment is affected by numerous
factors thus manager have to devots more time and energy to analysis market situations in order to
find effective strategies that can be used by firm to gain competitive advantages (Khan, Hussain,
and Ajmal, 2016). Four most common method or way that are used for taking appropriate decision
in context of global environment can be illustrated as follows:
Command style decision-making: It is style or way of decision-making in which manager is only
responsible for taking all decision that are beneficial for organisation. Thus, there is no involvement
of employees in decision-making as they thus have to follow or abide to instructions provide by
senior executives of firm.
Consult type decision-making: It is another type of decision-making in which management invites
or encourage individual or employees to share thier ideas, views and suggestion so that correct
decision can be taken for growth of enterprise. Employees of Ray C smith are encourage or consult
to take part in decision-making so that company can earn more profit margin.
Vote style decision-making: In this method of decision-making, leader and manager take vote of
several individual in order to find number of people that are agreed to particular decision. It is one
of the best styles as employees feel motivate and inspired or important part of organisation as
manager have encourge their vote while taking specific decision.
Consensus decision-making: This method of decision-making state that manager speak about
particular decision till everyone agrees to its thus the main objectives is to unify and enhance
quality of decision-making.
Thus, it can be illustrated from above that consult type decision-making is one of the best
method which could be used by organisations in order to smoothly operates its various function in
global environment (Buckley, Enderwick and Cross, 2018). As it helps in brining new and
innovative ideas to satisfy needs of customer’s thereby contribute in effective achievements of
company goals.
P6 Various routes to internationalisation and its key barriers
Company in order to expand its business operations in international market can make use of
several routes such as merger, aquistion, joint ventures and franchise. It can also export and import
products form one country to another so that needs of different individuals living across worldwide
can be satisfied. Such as:
Export: It is most common method or route in which firms plans to exports its products or services
in order to meet needs of new customer’s so that company can enjoy more profitability. It is best

method as involved less risk, cost as firm just have to provide services or products to individuals
that are living in different parts of world (Boshyk, 2016).
Franchising: In this firm sells intellectual property right to other organisation or it is access given
by one organisation to another to sell products or services of company on behalf of it by paying
specific amount.
Joint ventures: In this method, two company planned to form joint ventures in order to enter into
new market thus they will have more resources to meet requirements of customer’s. Benefits of
joint ventures is that one company have full knowledge about market condition thus they can easily
influences maximum number of individual to be part of firm.
There are several key barrier in adaptation to several route to internationalisation such as
trade restriction, government policies and procedure, import and export license or tariff and import
quotas. Such as some countries government in order to protect its local business introduce high
tariff and taxes thus it create barrier in expansion of business into new market (Zhu and Lee, 2017).
RECOMMENDATIONS
From the above discussion, there are several key recommendations that would be given to
Ray C smith so that it can easily retained its market share and profitability in international market.
Such as:
 Company needs to make use of digital technology or innovative method to enter into
international market so that maximum number of customer’s are motivate to select it as
compared to others.
 Ray C smith should adopt joint venture route in order to enter into foriegn market as it will
helps in expansion of resources and better satisfaction of customer’s needs (Alcácer,
Cantwell and Piscitello, 2016).
CONCLUSION
From the above report, it can be concluded that there are several key factors that drives
global commerce and trade such as cost, market and competitive advantages. There are number of
strategic challenges that are faced by company in global environment such as management of
supply chain or diversification of business. It can be concluded that globalisation has impact on
culture, leadership and structure of firm so it need to be considered by manager of firm while taking
correct decision. At last it can be concluded that there are number of routes which could be
adapoted by organisation while expanding its business in global market.

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