International Business Environments

This assignment delves into the multifaceted world of international business environments. It examines various aspects such as globalization, emerging market multinationals, co-innovation, production relocation, social networking, cloud computing adoption, and responsible leadership in a global context. The provided readings offer diverse perspectives on these topics, enriching your understanding of the complexities and opportunities within the international business realm.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse key factors of cost, market environment and competition that drive global
commerce and trade ...................................................................................................................3
TASK 2 ...........................................................................................................................................5
P2 Complexity of strategic challenges faced by company in global context .............................5
TASK 3............................................................................................................................................6
P3 State the influence of globalization on organizational leadership, structure, corporate
governance, function and culture................................................................................................6
P4 Influence of ethical and sustainable globalization on organizational function .....................7
TASK 4............................................................................................................................................8
P5 Evaluate the ways in which decision making work effectively in global context.................8
P6 various routes to internationalization and its key barriers ..................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The concept of Globalization is not new to industry. It has mutated and evolved over the
centuries that basically reflects the ambition and priority of different generation or countries. In
context of business the term “Globalization” refers to the concept of integration of international
trade, culture, information technology and investment (Voegtlin, Patzer and Scherer, 2012). It is
mainly driven by Government Bodies of a particular country in order to raise the standard of
living of people by opening up their economies with other countries in an effective manner. In
simple words, it refers to the process by which an organization starts operating their business
practices on international level. It implies the opening of nationalistic and local perspective to a
wider outlook of an inter-dependent and interconnected nation with free transfer of goods,
services & capital across national boundaries. This report talks about how Globalization has
affected Nike’s performance which is an American multinational company, famous for selling
sports footwear, apparel, equipment’s etc. It also talks about its on impact on various key factors
such as cost, market environment, strategic challenges faced by company, influence of ethical
globalization and how decision making help in achieving business objective in global context.
TASK 1
P1 Analyse key factors of cost, market environment and competition that drive global commerce
and trade
Nike Inc. is an American multinational corporations which deals in various activities such as
designing, developing, producing and selling different items to the customers at global level. As
it sells footwear, apparel, equipment’s and accessories in the market place. There are various
places where its store exists. This firm can expand their business at those places where no any
grocery item, footwear and more products available. Therefore, there is demand for these kinds
of products. If company wants to enter in new market then it may be find various factors that can
create barriers as well as conflicts for starting any firm. It must be required to conduct
environmental study for gathering data regarding new market place as it helps in analysing new
customers, competitors and trends during this study (Ferraro and Briody, 2017). It is an essential
for making decisions regarding business expansions at global level in appropriate manner.
Company can reduce various internal and external forces while starting the business in different

countries because environmental studies support in controlling and managing all forces in better
way. There are some key factors of global business environment such as:
Cost: It generally refers to money or other expenses that can effects on the business
operations. This force is related with various currencies of different countries so it has major
impact on the business activities such as purchasing and selling of goods and services in the new
market place (Wild, Wild and Han, 2014). Nike Inc. there may be major impact due to economy
rate which influence directly on the product's prices. In this consider country's tax rates, policies
and inflation rates that increase then costs of goods and services. Nike has to focus on various
rules and laws as well as cost factors while entering into new market.
Market: It is an important factor which is very useful for promoting the products and
services into new marketplace. It must be required to identify about complete new market as well
as study for analysing market trends and conditions for selling different products and services.
Every company conducts these kinds of study or research and survey process for environmental
scanning and identify the market trends by gathering data through research so that they can make
better decisions regarding business expansions. Nike Inc. required to study about particular
market as country's culture, people and their preferences so that company can serve as per their
desired needs and satisfy them in effective manner. Every country has different culture and
traditions and also people live according to their culture. Therefore, better study will support in
finding potential customers for particular goods and services.
Environment: It is most important and biggest factor that directly affects on the business
operations as every firm has surrounded with different climates or atmosphere. There are various
forces of environment such as internal and external that affects on the operations or entering new
market. It is flexible or dynamic in nature so these factors can change according to
environmental impacts. Sit must be requires to find the effects and work according to it. In other
words, both forces can effects on the decision regarding business expansions as well as its
elements can effects on the organization.
Competition: whenever starts the new venture or expand existing company at another
place so it must be requires to know about their competitors in the new market. It is also another
important factor for expanding business because there are cut throat competition and also have
big or famous brand image in the market (Hamilton and Webster, 2015). It may be difficult to
enter in the market and attracts numbers of customers towards organization products and services

in appropriate manner. Conducting research or survey can help in analysing competitors by
getting information or data regarding them as well as adopt suitable strategies for competing with
them and achieve competitive advantages in the marketplace.
TASK 2
P2 Complexity of strategic challenges faced by company in global context
Both large and small scale businesses, faces some challenges when they operate at some
level in global economy. The fate of world economic possess direct impact on the overall
operation and function of an organisation (Simic and Dimitrijevic, 2012). Nike operates in many
countries which mean that they might have faced various strategic challenges in order to deal
accomplish its business objective in an effective manner. The company is famous for marketing
their product and believes in outsourcing their shoe production. Their product are manufactured
in over 700 factories which are located at different countries like in China, the referred firm is
having 124 plants, in Thailand they are having 73 and many more. Therefore, operating in many
countries generates more complexity in business strategy which is not a healthy sign for a
business and its overall operation. Following are the strategic challenges faced by Nike:
1. Integrity: Business Enterprise has never faced any type of moral challenges that they
are facing in today’s competitive world. Everyone is struggling to become more
successful and yield higher profit, therefore expanding their business operation across
international boundaries. However, they process of globalisation was not so easy. As
Nike outsource their manufacturing part in different countries they face some integrity
problem while dealing up with the culture and norms of different countries.
2. Compliance and Regulation: It is essential for all firms to follow various rules and
regulation that has been formulated by government bodies of that particular country.
Nike needs to comply with tax laws of various countries and statutory export
regulation. For example: Many factories of Nike’s Indonesia Plant does not even pay
minimum daily wages to its worker which is near about US $1 which means company
is not following the act of Minimum Wages (Kasemsap, 2014). In addition to that,
there are certain situation when Nike was comfortable with the rules framed by
Government Bodies of particular country. Moreover Nike’s Vietnam Factory become

the synonymous with forced overtime by employees, slave wages and arbitrary abuse
which shows that company is not following the rules and regulation of Vietnam.
3. Culture and Language: One of the main advantage of global economy is that small
business can compete with each other competitively. Nike, taking the advantage of
successful global competitor has used markets of China and Vietnam to handle
customer service calls (Lee, Olson and Trimi, 2012). For example: In china, red colour
considers a symbol of luck while in other countries it represents as a warning sign.
Nike has set up its production plant in more than 700 countries which means they have
learn the culture and language of 700 countries which is quite difficult for them. As
Nike has strong marketing department, who needs to effectively looks down the
religious and cultural boundaries of particular country.
4. Technology and Communication: One of the main challenges that every company faces
during globalisation is communication issues that crops up just because technology
doesn’t reach in each and every sector. For example: Vietnam is considered as a
smallest country with minimal population who might be chances that are less educated
which means that they might be unaware of various technological advancement and
innovation. This comes out as a challenge for Nike as they were not sure regarding
setting up their manufacturing unit in such small countries.
TASK 3
P3 State the influence of globalization on organizational leadership, structure, corporate
governance, function and culture.
Corporate Governance refers to the set of customs, policies, process and institution affecting the
manner a corporation is controlled, administered and directed. Many business enterprise
describe it as a system of operating, controlling and structuring the business operation and
practices with an aim to accomplish long term corporate goal in an effective manner
(Kasemsap, 2015). Good corporate governance is important in order to gain higher
competitive edge in the market that aid in attracting and retaining capital needed for
investment. When company operates their business practices in any other country whose
policies and laws are different from that of host country, they may face various issues and

problems at initial level. The culture or the business process of one country is different from
that of other country.
Leadership: Each leader has a set of unique opportunities and challenges to the company's
history, customer changes, market segment and technology. With rapid business
globalisation, they face many challenges and opportunities. According to Adamson, leaders
must display strong skills in context of business knowledge and also have an awareness
regarding cultural differences and standards (Ramamurti, 2012). When an organisation
change, leadership must find possible ways to adjust and adapt themselves according to the
changes. In any business enterprise, changes bring confusion and resistance, but with
positive leadership skills leaders can deals with such challenges often driven from diversity
such as confusion, ambiguity, complexity etc. in an effective and efficient manner.
Culture: As globalisation becomes more widespread, organisation deals with increased culture
and work diversity in the workplace. These changes needs large and small businesses to
understand or learn how to deal with culture diversity by adopting new guidelines and
policies for workers. Cultural, ethnic and religious diversity in the workplace creates needs
for worker training. Thus, in order to protect the interest of both company and employees
from discrimination, leaders have to implement effective policies and provide training to
existing personnel so as to make sure that change is accepted by everyone in an effective
and efficient manner.
P4 Influence of ethical and sustainable globalization on organizational function
Business Ethics is also known as the corporate ethics which define the moral or ethical
principle of particular company. It apply in all aspect of business environment in which the
company is mainly dealing or operating. The term “Globalisation” means when company start
practising their business operation across international borders. In the last few decade,
Globalisation has become the centre point of all businesses. It has a vital impact on almost
everything such as technology, knowledge, information, functioning etc. When a business
enterprise practise their operation overseas they are liable to adapt the culture and life style of
that particular country. Ethics is normally compromised of what is right and what is wrong for
the business (Cavusgil and Knight, 2015). The combination of business ethics and globalisation
gains much attention. One of the effect of globalisation is not just fiscal but also physical.
Information travels far from one country to country, thus it become difficult for the companies to

maintain confidentiality, markets are much more inter-dependent which makes it difficult to
maintain secrecy. When globalisation is linked with business ethics, culture plays very prominent
role. For example: In China, Red is the colour of luck whereas in any other country Red is
symbolise as danger or threat. Nike has more than 700 manufacturing plant al across the globe
which makes them to understand the culture and moral principles of each country (Ratajczak-
Mrozek, 2012). For example, In Indonesia Nike is having 6 manufacturing factories in which
more than 25,000 workers are employed. Here, the key issue is even after large number of
worker they are paying low wages to them which creates bad impression on them as well as it
enables them to shift to some other company where they will get minimum wages at least. In
Vietnam, problem related with health and safety are increasing tremendously. Nike is having its
manufacturing plant in Vietnam also which enables them to follow the culture of that particular
country. It has been figured out that they are not providing protective equipment and moreover
the working condition and work hour is also violable. Thus they are required to provide flexible
working hour and condition to employee as per the interest of both company and personnel. In-
fact in Pakistan, Nike has faced by the issue of Child Labour which is ethically wrong in the eyes
of company, society and worker. But after it, Nike has decide to remove all child from working
like they have decided to pay the school or tuition fee of children until and unless they does not
attain the minimum age of working.
TASK 4
P5 Evaluate the ways in which decision making work effectively in global context
The essence of management is making effective decision that aid achieving company’s objective
in an effectual manner. Managers needs to constantly evaluate the alternatives and make decision
after analysing all the possible solution. Manager in a company tend to take decision based on
consensus. They are require to discuss it with their co-worker so that they can mutually decide
and agreed upon one common conclusion. Earlier, company’s used to take decision while
discussing it with group which seems as time-consuming technique in modern era. It is unclear
and moreover it is handled well it tends to create bitter felling among co-worker. As Nike deals
across international boundaries which means they need to focus on more framing effective
decision making strategies (Aoki and Lennerfors, 2013). There are various tools that help the
referred firm in effective decision-making are discussed below:

1. Brainstorming: It is combination of both group discussion and problem-solving. It
basically works on the believe that more or maximum number of ideas creates greater
possibility of coming at a solution to the defined problem in best possible manner. It
mainly starts with group generating ideas which are further evaluated with action point
based on discussion (Belás and et. al., 2014). For instance: When Nike wants to launch
new marketing campaign for its latest addition they can involve the input of host
country resident so that they can select best possible idea among the ample ones.
2. Nominal Group Technique: In this technique, the team divides themselves into smaller
groups who further generate ideas. They note down all the possible options in writing
and they further discuss it with other team member so that all the ideas must be fairly
evaluated and then select the best among them. They mainly select via voting i.e. the
idea that gets number of votes or has been liked by many people are selected as final
idea. For example: Nike can create small group who looks at only marketing
department of the firm who creates unique or innovative ideas for effective marketing
strategy.
3. Multi-voting: It often starts with round of voting where an individual cast his/her vote
for the shortlisted solution or options. Each person can vote at one time. The one with
maximum number of votes is carried forward to next round. The process kept on
repeating until the winning option is obtained. For example: Each team member of
Nike would propose their strategy in from of other team members so that they examine
it in each possible manner. Other team member will vote for the best one who gives
best possible solution to the given problem. The strategy receives number of vote is
considered as the final one and the company will start implementing it in its business
strategy and operation.
4. Delphi Method: In this method of decision-making, the facilitator allow other team
members to individually brainstorm their ideas and then submit it “anonymously”. The
interesting fact here is other team member is unaware of what other is thinking. The
facilitator gathers the data of all inputs and then circulate them among other team
members for further modification and improvement. The process keeps on repeating
until the final strategy is made (Kinkel, 2012). For example; In Vietnam there are 34
manufacturing plant of Nike. The facilitator of all unit collects the strategies from

individual unit and then pass it on to others as well so without revealing to whom unit
it belongs to so that they can easily figure out the best one among the following.
5. Electronic Method: Here the entire decision-process takes place with the help of
technology. For instance: Nike do Skype calling with international client or they even
go for group calling in which they simultaneously calls facilitator of various production
plant so as to take effective decision in context of achieving business objective (Stroke,
2015). They create two or three strategies and gives options to client to choose best
among the following ones.
P6 various routes to internationalization and its key barriers
So many routes are there that can be opt by organisations to enter international markets.
Following are the main routes:
 Strategic Alliances: This refers to the agreements between two or more than two
independent enterprises to cooperate in the sales of products, manufacturing and to attain
set business objectives. Mainly under this entity agree to share resources and funds to
generate more revenues. This does not result in a new entity but work to achieve set
goals.
 Franchising: This is another method that can be utilise by entity to internationalise its
business operations. Under this agreement take place in which one party grants another
party a right to use its trade name or trade mark with some specific business process.
Under this the party who take permission known as franchisee pays a onetime fees of
sales revenues to the other party known as franchiser. One of the man benefit of this entry
mode is that in this franchisee do not require to invest more funds in advertising activities
as individuals are already aware about a big and well popular brand.
 Partnership: It is a type of business enterprise under which two or more than two
individuals invest their funds, resources and skills achieve business objectives. This is a
method that can be used by companies to enter in global market. In this company who
wants to enter into a new market can come into partnership agreement with a company
already exist in that area.
 Merger and acquisitions: This is a process in which two companies combine into one to
carry out business activities and to earn more profits. Mainly this take place between two

companies having same size. Main benefit of this is that it creates synergy which increase
effectiveness of business activities.
There are several problems can be occurred while entering into new market as it may be
regarding increasing costs, business environmental factors and competitors. It can be understood
by taking an example such as marketing services that might expensive, banking systems might
be undeveloped as well as payment mechanisms which may be unavailable and many more
things. So, there are various major factors that can affects on the business while expansions. Nike
Inc. must required to consider all these forces and also try to adopt suitable strategies so that they
can survive in effective manner. Here are some barriers which must be considers and these are as
follows:
Monopolies: It is a biggest barriers that can affects on the business operations. The
monopoly generally arise when one company is very famous or provider any particular goods or
services in the market. It can be created by takeover of competing companies as well as it might
be owned owned company. There are various examples of monopoly types of situations that can
affects on the business operations and its activities. For the Nike Inc. it is must be required to
study about various companies who are leading the market by its unique products and services in
effective manner. This firm also focus on selling best quality of sports items and many more to
the people so that numbers of customers can be attracted towards organisation.
Legal Protections: In this the most important factor that can affect is the poor legal
protections which are available in foreign companies as well as it acts like barriers. As company
must be required to protect its intellectual property such as copy rights, patents, trademark and
fair for better company making (Wilson, 2016). In this also includes effective disputes
settlements mechanisms so that company can survive effectively from various losses in the
market. On the other side, there are several countries where rules and regulations are different so
courts and laws are not favour of the foreign exporters. It is also biggest barrier when enter into
new market.
Bribery and Corruption: This a major factor which depends on country's legal policies
and rules as there are various nations where business activities are commonly sped up as well as
made possible by using payment mode through bribe. On the other side, in some of countries the
decision makers and key official generally demand about various form of payment that allow a
transactions for proceeding (Thomson, 2014). Foreign countries have their rules and regulations

as well as formulated laws as treating bribes as an everyday business occurrence because
companies can face severe civil and criminal penalties for paying bribes. Therefore, it can affects
on the Nike Inc. while expanding business in other countries.
CONCLUSION
From the above report, it can be concluded that there are various significant factors, like
market, competition etc. which make a huge impact on global trade. Every business organisation
has to face different kind of strategic challenges at the time of operating at global level. They
may attain benefits of getting the status of MNC but this tag comes at a huge cost. If a company
is running their business in single country then they do not have to make major changes in their
organisational structure and culture, but if enterprise is doing business across the globe then they
are affected by globalisation.

REFERENCES
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