Influence of Institutional, Cultural, and Transaction Costs on Entry Mode Choice

This assignment requires a retrospective analysis of institutional, cultural, and transaction cost influences on entry mode choice and performance. It involves referencing various studies and research papers on international business, including those by Cantwell, Dunning, and Lundan (2010), Cavusgil et al. (2014), De Jonge (2011), Ferraro and Briody (2017), Gecevska et al. (2010), Hamilton and Webster (2015), Kasemsap (2014), Laudon and Laudon (2015), Louhiala-Salminen and Kankaanranta (2011), Peng (2016), Simic and Dimitrijevic (2012), Tarique and Schuler (2010), Trompenaars and Hampden-Turner (2011), Werther and Chandler (2010), and Wild et al. (2014). The assignment aims to understand the complexities of global business environments and the factors that influence entry mode choice.

GLOBAL BUSINESS
ENVIRONMENTAL

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different key factor are there which drive the global trade commerce.................................1
TASK 2............................................................................................................................................3
P2 Complex strategic challenge which is faced by firm in international market........................3
TASK 3............................................................................................................................................5
P3 Impact of globalisation within organisation..........................................................................5
P4 Effect of ethical and sustainable globalisation on organisation operations...........................6
TASK 4............................................................................................................................................8
P5 Evaluate ways, decision making and can work effective in global manner..........................8
P6 Ascertain the different path to internationalisation................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is that which is a combination of different factor which impact on
the operational and functional action of entity. Moreover, every organisation needs to operate
their business in international environment to achieve the high profitability and development in
effective manner although. Business environment is that which has both internal and external
factor which affect the decision of company and strategy too (Adger and et. al., 2013). Hence,
through research- market is analysed and examine different factors which affect business, so that
they can look forward to expand their business operation and activities in other locations in
better manner. The report is based on Natural Windows Ltd. Which provide the services related
to windows and doors of wooden in London. Assignment will include various criteria like
various key factors for global trade, different difficulty in strategic condition and several thing
which is being faced by entity and although they have various factor and having direct affect on
globalisation too.
TASK 1
P1 Different key factor are there which drive the global trade commerce.
Globalisation is such which enhance the interaction in between various people
internationally and level of transportation and communication also increases in great way.
Globalisation involves exchange of various product and service, resources, capital with data and
method too. Globalisation has increased an awake for many organisation to increase global trade
and commerce which do help them to enhance there business at global level and make them to
attain there goals and objective even though it makes them to earn higher profits as well.
Moreover there are various factors which does aid in providing the effective services in
right context and also contribute in media sector. It is such which include various different
components as cost, environment, market and having competition at the international trade and
commerce factor, although these all should be managed in better manner and needs to be used in
easier way and acquire result or outcome too (Arends, 2014).
Those are some elements which describe as follow:
Cost: It is being considered as the most essential part which does aid to increase in
various marketing activity and make firm to analyse as where they spend a high cost. Moreover,
Cost of product is that which considered as the promotional tool and method that assist in
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developing in trust & loyalty among the customers. The management of Natural Windows Ltd. is
thus liable for developing effective amount with its sell of goods and it also bring customer
relationship with their customers across the globe in great way. This will affect the global trade
commerce, as this help in increase of exchange between currency of different nations. Along
with this, it help in increasing financial relationship between two nations. The cost is divided
into two parts and those are as follows:
Direct cost: It is that which is being determine and completely attributed in the
production capacity of goods and services is known as direct cost.
Indirect cost: Although the depreciation and various administrative expenses are those
which are difficult for assigning with specific product and services, consider the indirect cost too.
Environment: It is being considered as important factor as because this affect the whole
functioning of the organisation in great way. Hence, environment is segregated into two parts as
internal and external which does affect on company decision and strategy in effective way
(Brouthers, 2013). In Natural Windows Ltd. research help them to bring proper solution to
organisation which reduce the impact of factor on business which are there from various culture
of different country. Those factors are as:
Internal environment: Internal factor are those which directly exist in company which
include the employees, management, employers and investors as well. This is such which
manage factor and also assist in affect on working form and although Natural Windows Ltd. has
an effective process and it has to control the firm and it can be easily managed with planning.
External environment: It is considered as environmental factor which directly affect and
make an appropriate decision of entity. This is such that does include the PESTLE analysis
which affect external factor on firm in any manner. So Natural Windows Ltd. need to be adopted
with major rules and norms which is being made be the company government too.
As healthy internal environment of organisation and good external environment of business
nation will encourage business to expand their business, so that their profitability can get
increased.
Market: It is being considered as for the company and customer with which they
introduce different product and services in the large market. In this factor, exchange of product is
being done in form of cash which does help in building the strong relation in ease manner.
Different country does have various market scenario and thus proper research can help company
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to make a proper strategy and decision (Cantwell, Dunning and Lundan, 2010). Key element of
market are as:
Raw material: Different type of organisation which choose raw material and also convert
it into finished goods. Various material are available according to market demand which can help
in develop procedure in effective way.
Working class: This is being called as labour market, in which organisation do hire some
talented and skilled people who can work with responsibility according to their ability and
knowledge.
An organisation having good source of raw material and having good working class help them in
producing products with more effectiveness and with more efficiencies. This all lead an
organisation to grow their business at global level.
Competition: In market there are various kind of competitors which do serve millions of
people with their services and try to affect the image of other company. Therefore, Natural
Windows Ltd. has to bring effective strategy and decision to attract large number of customers.
Although in this strong and valuable competitors are there which has substitute in service
providing and also look forward to give quality based services in great manner to their desired
buyers and customers. An organisation having good competition strategies will help them in
gaining some competitive advancement, which can be proven as very effective while expanding
their business.
Globalisation: Geographical scattering is having an industrial and with service activities in great
manner. Although, it is such in which economies has somewhere increasingly integrated and
inter dependent in better way. For instance, research and development, source with input and
having an production with distribution apart from such it can also be said as having an joint
ventures for sharing an asset in great manner. There are few factors which do help in developing
the globalisation and some of them are as:
 Technology: It is such which has enhanced the performance of companies in many ways.
Basically, it is required to address the use of technology in better manner and thus it is
such which help company to attain its goals and objectives. Even if company is attaining
an huge profits with there effective working in organisation then they can think of
expanding there business at global level. Technology does help firm to conduct research
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in great manner which do help entity to know the environment of different country and
can lead to attain a good amlunt of profit in those countries as well.
 Open market: This has gained many chances of business to enhance there performances
and productivity as well. Open market has provided many chances to various industries to
come up and to enter in market of different countries. Open market does help in
establishing with ease as there is no restrictions over many things i.e. has lead to make
them to attain the goals and objectives in perfect manner.
TASK 2
P2 Complex strategic challenge which is faced by firm in international market.
When a business move in global market then company do face various challenges which needs to
be overcome in effective manner. Even though natural windows is that company which do use
technology to have research in market which do help company to produce or formulate an
effective strategy and decision that could help firm to know the difference in outer market.
Basically, expanding business in global environment do help Natural window to earn more and
more profits in effective manner.
Strategies of organizational structure:
International: When a business is leading to expand there business in other country that
can help them to earn higher amount of profit as well. International business do help company to
be known in various country in effective way too. Basically, becoming an international business
make them to attain higher goals and objectives in better way.
The Natural Windows Ltd. is that company which serve various company with their media and
print services to them, and mainly they deal with small firm. It is such which does deal and
understand macro level and various factor of market area, which look forward to aid growth and
success in ease manner (Cavusgil and et. al., 2014). Although, a difficult strategy with challenges
are required to be executed in effective way and this can lead to reduction of negative issues in
proper manner. Therefore, it is required to develop research so that firm can analyse the
complexity factor and better strategy cam be bought by Natural Windows Ltd. entity, as this can
make them to have an smooth running of their business and functions which target the various
customer market.
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None the less, external factors are such which affect company in great way and those factors are
as:
Illustration 1: PESTLE Analysis, 2017.
(Source: PESTLE Analysis, 2017.)
Political factor: These factors are those which is related with rules, norms and legislation
in which the company operates and regulate their function in better manner. For the Natural
Windows Ltd.firm, it is needed to analyse such factor as it include political order, tax policies
and licensing procedure etc. Although the government of UK can change the posted legislation
and thus companies has to follow their rules and regulation in proper way (Colfax, Rivera and
Perez, 2010). Moreover, analysing and working according to it can help organisation to attain
their goals and objectives. This will help Natural Windows Ltd. in getting an business
environment which will help them in making long term strategies for them, so that they can
attain long term goals of them
Economic Factors: Factors are such which is based on the stability of economic country
and although which do affect the trade and commercialisation within the market as well. This is
something which required to develop and build various appropriate process as per situation of
economic of nation and this thing can lead to affect the operation of business with its major
functions. Economic aspect is that which has inflation, interest rate, wealth taxation and it
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include the global policy of economy and also look forward which is generally based on trading
procedure of firm. This factor will help Natural Windows Ltd. in gaining start and benefits from
the beginning of their operations, so that they can make strong customers base along with
revenue. This will help them in future development.
Social factor: These are those factors which consider the culture and current aspect and
trend of economy and this is being followed by people in great manner (De Jonge, 2011). In
Natural Windows Ltd. firm, which does lead to have an essential and it analyse various social
factor of country and it also directly has impact on the marketing process in ease manner too.
Within the globalisation, social factors are there which does plan an essential role which is
somewhere totally depend on customers market needs and wants. This factor will help them in
supporting the products offered by Natural Windows Ltd., so that they can make a customer base
of loyal customers. This will help them in getting success in new market place.
Technological factors: The Natural Windows Ltd. is the service media company and
thus provide the media services to different organisation too. Firm does look forward to use
technology in better manner and it does help in building the effectiveness for getting the higher
profitability and productivity within organisation. Such type of firm is that which introduce the
new and effective policies in entity and make them to attain their goals and generate more
profitability. Every nation have their own technological advancement, which is very much
important for organisation like Natural Windows Ltd. to study them. This will help them in
upgrading their technologies, so that the products offered by them become more efficient for
their customers. This will help them in developing their business in new market.
Environmental factor: Factor is such which totally based on environmental element
which directly affect on business operations and although its functions in proper manner too.
International environment and statement it is likely to direct impact on production and
manufacturing services which create difficulty (Ferraro and Briody, 2017). An enterprise require
many thing who understand and analyse for having product and services which does lead to harm
the environment of specific nation although. It is very important for Natural Windows Ltd. to
study these factors of nation, so that they can perform their operation in manner by which
environment do not get harmed. This lead them in increasing their sustainability in new market.
Legal factor: This is related to the government policy and norms, which does have an
affect on business operation and functions in ease manner. In Natural Windows Ltd. firm require
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to understand rules, law and ethics which is something that relate to regulate operate with all
trading organisation in effective way. This will help Natural Windows Ltd. in performing their
activities according to government, so that they do not get fixed in any type of legal issues and
perform their functions for long time period.
Focus: In this type of strategy Natural Windows allocate all their organisation' resource in
particular path so that decision are formulated in considering all these aspects. As target segment
is identifies therefore, it help the organisation to carry out all its activities accordance to it.
Differentiation: in this, Natural Window produce differentiated products and services for their
customer in order to satisfy their needs and wants. This assist them to create competitive image
in current market place.
Value Chain: It involve sequence of activities that are adopted by business organisation that
assists in delivering their goods and services at market place.
Supply Chain: It involve number of interrelated components like individual, resources that are
applied in producing goods and services. Natural Window have set structure through which
planning and managing process.
Ethical and Governance: Every business organisation have to follow certain ethical rules and
regyulations so that whole work process can be conducted in proper way.
TASK 3
P3 Impact of globalisation within organisation.
Globalisation is that in which various company start working with different nations in
proper way. Thus globalisation and different elements which does impact on negatively on
different activities as well of firm. Therefore, Natural Windows Ltd. Firm needs to create various
form and having effective strategies which acquire higher profitability and look for growth in
ease manner. Although the company is an service providing company and needs to maintain their
activities in market too (Gecevska and et. al., 2010). Moreover, firm also develop their values to
manage every task in great way.
Leadership: It is necessary for the business activity and thus require various thing in
proper manner to encourage the employees in ease way. Leadership is that which does help in
expanding business operation and having major functions in various countries as well. There are
various functions and activities and need to achieve the goals and objectives in better manner.
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This is that which help to increase the skills and abilities of various workers, although they make
company accomplish their target and goals of organisation. It convert company to produce an
proper decision and strategy in market place (Hamilton and Webster, 2015). Globalisation have
huge impact on leadership, as this lead an organisation like Natural Windows Ltd. to make
changes in leadership style used by them. For example, before expansion they use Autocratic
leadership style but after expansion it is very important for them to adopt some big level
leadership style.
Cultural and functions: This is being considered as the main important components
where the culture and functional activities are there and which determine on their roles. The
Natural Windows Ltd. firm require to evaluate different criteria so that they can maintain and
manage their whole business activity with their culture and functional activities of country.
Impact on business process it is appropriate for making the implement with proper strategy of
company. Globalisation also have their impact on culture and functions of Natural Windows
Ltd., as this help them in expanding their business, for which it is needed that production have to
get increased. For achieving this goal it is required to hire new employees and make their work
force diverse.
Governance bodies: It is one of the most essential factor of firm and this is such which
does include various types of laws and rules of company. Even though, governance bodies are
higher authorities of nation and firm which needs to evaluate the rules and regulation which is
build appropriately in better manner. This also change governance bodies, as after expansion it
become important for them to increase the size and scope of these type of bodies, so that they
can monitor the business performed in the nation and out of nation.
Therefore there are various factor which describe the poor and rich people:
Exploitation of resources: It is necessary for the company to properly manage and
maintain resources for gaining the maximum profitability and productivity in better manner
(Kasemsap, 2014). Although this can have a directly affect different business enterprise and also
create harm for several functions in negative way.
Unfair trade: The unfair trade practises which refer to trade practises whose main
objective is to promoting sale and usage the delivery product and service, which adopt partial
technique and method in effective manner. This is something which impact on business
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operation and activity which is done in badly manner and sometimes it does help in maintaining
a selling process with customers to provide the better knowledge specific goods.
Increase in wealth: In factor, it is clearly state that which help of globalisation and with
this they can also enhance the wealth be selling different thing although product and services for
international customers in proper way. This is something which will help increasing the wealth if
they does not make a bias among the people and according to age, gender, caste and religion etc.
World economic growth: Economic growth is that which increase the inflation rate
which adjusted market value with some specific goods and services that manufacture the
economy in all given time frame too. Moreover, there are some assistance of globalisation,
although this also help in enhancing the international growth of firm and it deals with different
type of organisation.
P4 Effect of ethical and sustainable globalisation on organisation operations.
Globalisation is that process which directly influence entity in proper manner as well.
Generally they impact on company which desire out to expand their business operation in
different countries and it gets high profitability. Although it is necessary for the natural window
Ltd that organisation should choose ethical culture within entity so as to handle the employed
function and activities in better way (Laudon and Laudon, 2015). Moreover, they do assist in
getting the things in effective manner and competitive advantage can be there in market place.
Natural window Ltd. Is a small business organisation which look forward not to expand
their business structure in various locations because this is something which also essential to
understand the ethical and sustainable globalisation which directly affect in process which is as
under:
It has been seen that there is a great impact of the ethical and sustainable globalisation on
venture as well. It is required that company should have to follow all the rules and regulation in
better manner, although this also help the member of corporation in making decision as what is
right and wrong in organisation. Moreover, there are various benefits which conduct business in
ethical way. Therefore this can be understood by different point as:
1. Globalisation is such, which is making many company to carry out commercial activity at
the global level. Due to this, completion is being noticed and it has been increasing the
large number of enterprises which also offer the same kind of merchandise or the services
to the civilians. Through this, natural window Ltd. Can lead to go to have an competitive
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advantage which supply the best quality goods and services with their possible clients
too. Normally, they are looking forward with their attention of wide customer base which
can aid in enhancing the overall sales rate as well (Louhiala-Salminen and Kankaanranta,
2011). Although, it is quite unique that innovational product with increase in brand image
too.
2. It is there that honesty and responsibility are those thing which is treated as main pillars
and it also establish ethical environment within work station. Managers are there which
needs to focus on towards the two and also look forward to set up their better and
healthier environment and thus workers needs top show the interest in achieving their
goals and objective in proper manner (Peng, 2016). These are those which finally support
in furnishing every legislation, organisational code of conduct and hence it thus aid in
running complete the venture.
For example: Cited, firm need to create the creation rules and principles against the different
unfair actions and thus it is be like poor production, discrimination on the basis of age, sex,
colour and race etc. Although they have activities which consider the key challenges and comes
in with barrier in way of corporation too. Thus, laws ought to be designed and for removing
various unlawful acts are there. It is such which surely improve the existing circumstances of
company as well.
3. Different department of natural window Ltd. Although such as production,
merchandising and also the man-power etc. it should be done to run the following ethical
norms and policies. Company should choose the law which require to state the thing for
manufacturing of different product and services which can lead to have more focussing
on quality instead of using to quantity (Simic and Dimitrijevic, 2012). Apart from this,
members are there which are associated with division marketing and human resource
ought to perform their job which obey the legislation made the government of country.
For instance, they should have an copy innovation of others, equal wages which have to
be catered and staff members, recruitment is there of workers and this has to be done on
the basis of skills and talent, no discrimination has to be carried out on ground of sex,
religion etc.
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TASK 4
P5 Evaluate ways, decision making and can work effective in global manner.
For the effective decision organisation, it is necessary and they should implement various
type of activity in their process and this assist in building the effective decision and also make
procedures for Natural Window Ltd. This is something, in which leader and manager of firm are
such in which firm can easily develop and make desired or effective thing of organisation. Both
can easily and giving the effective decision and guidelines to their employees for looking to have
a high business growth and success in better manner (Tarique and Schuler, 2010). There are
various kind of factors which can determine for conducting the suitable decision making process
of organisation which try to expand their business operation and its functions as well:
Analyse examine issues: It is being considered as the most important factor of firm and
it is be like which include the effective analysis and having various issues and problems that can
occur in several ethics as well. Along with this procedure, they are those which can help in
having effective solution and for resolving it in right context too. Managers and senior
employees are there which communicate with the workers for observing the different ideas of
thought toward having organisational process as well. This help in having a communication and
do assist in developing and building strong relation customer between management and
employees within organisation and thus it also help in resolving the various issues and services
in proper manner.
Determine the solution: After analyse and examining the different business operation
and various functions be like which directly affect it on working concept, leaders and managers
for taking effective decision for solving the major issues and the problems as well (Trompenaars,
and Hampden-Turner, 2011). Although they have resolution to have totally based on strong and
appropriate communication process and this is such which help in developing the employees and
managers in effective manner.
Executing in business process: After having various appropriate styles and analysis,
enterprise can easily implement the business process for resolving some major issues and
barriers and dispute in between employees too even it can occur within in organisation.
There are various thing which made under appropriate decision and some of those are as follows:
Rational: A rational style is such which has decision making procedure and thus it is
totally based on the developing scenario and thus choices are there which get result for
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maximum number and utilisation of resources is done in effective manner. Conventional
economic theories are there where it is used and developed with prediction for all the individual
taking part of specific activity.
P6 Ascertain the different path to internationalisation.
There are various thing which is related to the internationalisation of Natural Window
Ltd. As:
 Export: The firm is such which export the different kind of goods and services for which
attracting domestic with international customers (Werther Jr and Chandler, 2010). This is
something a better route which for internationalisation to deliver the product and services
to set another location.
 Franchising: It is be like having effective route and this is be like which look to have
easier and also desire with customers for purchasing the type of product to their willing
company to have branches at the place.
 Joint venture: It is an effective promotional technique which can help in product and
services to have a joint venture to have for other company and it also supply the various
goods to different locations places.
 Merger: If firm will merge into the various company although it is be like which is very
easy to their customer and to make it profitability and increase the productivity.
 Acquisition: If a company is acquiring the firm, this is being considered as important
way which also does assist in developing and building the trust with customers at
international level (Wild, Wild and Han, 2014).
 Quotas: This is also considered as the major barrier and government of various country
do impose the various restriction and thus which limit the number, monetary values and
products and can be import at a given time period in right context too. '
 Embargo: It is being considered as barrier while making a trading goods at another place
and various things. A embargo is somewhere a government institution which protect
export from the specific country. This is a legal law and it is restricted for the transferring
the product as from one place to another in better manner.
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CONCLUSION
From the above report, it can be analysed that the business environment involve different
thing which can have for both internal and external factor and thus it has affect on making
decision procedures and it is be like which exist in United Kingdom. Globalisation is such trend
which does enhance the interaction in between the people on international level and due to this
advance in communication and transportation applications in better manner. Natural Window
Ltd. Is a organisation which does offer in having effective services in large market place and thus
it mainly deal with small scale firm. The company is such which require to make and develop
their personal values and for managing the things in better manner. Honesty and responsibility
are such which treat two different thing in pillars and it also establish in ethical environment
within work station. For effective business organisation, it is be like necessary that they should
have an implemented the various kind of activities in process and this assist in building the
effective decision making procedures for the natural window Ltd.
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