Impact of Globalization on Business Operations

Impact Of Globalization On
Business Operations

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................3
LO1................................................................................................................................3
P1 Analyzing key factors that drive global commerce and trade...............................3
LO2................................................................................................................................4
P2 Various strategic challenges associated with the operating in a global
environment............................................................................................................................4
LO3................................................................................................................................5
P3 Evaluating the global market influence on the organization’s governance,
leadership, culture, structure and function.............................................................................5
P4 Influences of ethical and sustainable globalization on company functions..........7
P5- Different ways decision making could work effectively in international context
................................................................................................................................................8
P6- Varied routes to internationalization an company can adopt, including
challenges...............................................................................................................................9
CONCLUSION............................................................................................................10
REFERENCES.............................................................................................................11

INTRODUCTION
For the purpose of remaining in the market it is crucial for the business organization
for expanding its business which will help in attaining higher profits. Globalisation is the
process which accounts for the interaction and integration of the people, government,
corporates all across the world. There are various challenges that come across with the
opportunities which are required to be identified and take competitive advantage.This report
is based on the Ray C Smithwhich is a family owned business in the year 1973 providing
transportation and warehousing solutions to its clients. This report provides an insight on the
key factors which is used for making businesses global along with strategic complexities in
relation to operating in the global environment. It also covers that how the foreign market has
the capacity to impact the company’s culture, structure and discusses the impact of global
business operation upon the organizational decision making and strategy formulation.
LO1
P1 Analyzing key factors that drive global commerce and trade
When the organizations expand their business in the international market, it come
across various challenges along with the opportunities. There are various types of factors
having an influence over the business entity in regard to its business operations. Therefore, it
is the responsibility of the manager of Ray C Smith in respect to analyzing the factors and its
impact and then formulating the strategies according to it. Following are the factors which
drives globalization.
Cost factor: For the purpose of expanding the business in the international market the
company is required to analyze the cost factor associated with it. As the organization requires
to analyze the cost in relation to providing its products and services in the new global market
(Alsaad and et.al., 2018). This factor is considered as the most important factor having an
influence over the business operation. Ray C Smith requires to undergo R&D which requires
incurring huge amount of money along with the adoption of the latest technology which
would be a costly affair.This factor is challenging for the company before expanding the
business.
Market factor: This factor is also very important which determines the change in
terms of the demand of the customers which might have an influence over the company in
respect to the number transport vehicles required. This factor is crucial in globalizing the
company. This will provide benefits to the company in terms of the increase in the
profitability along with taking advantage of economies of scale (Abdallah Alsaad, Taamneh

and Ismail, 2018). This will provide opportunity to the company in providing goods to the
company as per the demand and customers requirement in the respective country. This proves
a challenge for the organization in regard to timely transporting the products to the specific
market pertaining to the demand which also requires latest technology which is again costly.
Environmental factor:While expanding business in a global market it is very
important or the company to deeply analyze the various macro-economic factors prevailing in
the country. Ray C Smith requires to determine the political, legal and the social factors
which can have a huge impact over its business operation and expansion plan. This would be
beneficial for the organization to carry out its work considering the political and legal rules of
that country along with the social and cultural trend of the same (Degain, Meng and Wang,
2017). Thus, this will help in enhancing the productivity and profitability of the company.
But on the other hand, it might become challenging as working in accordance with the rule of
the other country might turn out to be a complex process.
Competition:Since, there is a lot of competition prevailing in the market which makes
the Ray C Smith, to effectively and extensively analyze the competitors. In order to overcome
such intense competition, Ray C Smith requires to provide quality services to its customers
with additional benefits which will help in grabbing the larger market share and take
competitive advantage.
Thus, these factors will have a huge impact over the business operation. Analyzing
each of these factors will result into identifying the ways or the strategies which can be
implemented by the company. But on the other side, it is important to focus on the thing that
for carrying out such analysis will require huge amount of fund which might pose as a big
challenge for the company.
LO2
P2 Various strategic challenges associated with the operating in a global environment
When an organization thinks into expanding its business operation beyond its
geographical, the company like Ray C Smith have to implement different types of strategic
challenges which ranges from the financial and non-financial, an example of which are
provided below.
Entry Fee:Ray C Smith can go to the international market by the way of exchanging
the export or the transportation fees. The company can establish or enter into the new market
by setting up a new branch as a wholly owned entity (Clift and et.al.,2017). This entry fees