Global Business and Corporate Social Responsibility

The assignment delves into the multifaceted aspects of global business, emphasizing the role of corporate social responsibility (CSR) and sustainability. It examines various theories and concepts related to global business, including internationalization strategies, cultural dimensions, and the impact of globalization on organizations. Furthermore, it analyzes the importance of ethical considerations, environmental responsibility, and stakeholder engagement in shaping sustainable business practices.

BUSINESS
ENVIRONMENT IN A
GLOBAL CONTEXT

Table of Contents
INTRODUCTION...........................................................................................................................3
1. Information regarding 'Shell AS Royal Dutch'.......................................................................3
2. Business environment of 'Shell AS Royal Dutch'...................................................................6
3. Analytical approach................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals...................................................................................................................10
Online........................................................................................................................................11

INTRODUCTION
Global Business environment is very important for the company. It is required for the
company to operate their business in global market as per the standard. When company enters
into the global market then it creates many opportunities to the business. Shell AS Royal Dutch
is the organisation which is known as shell. It is multinational oil and gas company. This
organisation remained in the fare way as per the comparison with weakness that is considered by
the company (Androniceanu and Dragulanescu, 2012). This company is delivering royal
performance in their field. Shell is earning benefit from the improvement of end market in Asia
and North America. This company has reinforce chemical infrastructure in North America and
Asia.
1. Information regarding 'Shell AS Royal Dutch'
'Shell AS Royal Dutch' company is the company which is traded in international market.
This company is known as shell in the global market. This company is incorporated in year 1907
by the amalgamation of Royal Dutch Petroleum Company (Netherlands) and Shell transport and
trading company (United Kingdom). This company is trading in oil and gas sector. This
company is incorporated in United Kingdom and has its head quarter in Netherlands. This
company is trying to expand their business to FINLAND. This step will provide the growth to
the business of oil and gas and give more benefits to the company. As per the report of year
2016, it is the six largest company in the world. In year 2013, this company has its revenue equal
to the 84% of Netherlands total GDP. In this year the GDP of Netherlands was $556 Billion
(Balkyte and Tvaronavičiene, 2010). This company is working in all the area of oil and gas
sector.
This company is also trading in:
 Exploration
 Refining
 Petrochemical
 Power generation
 Trading

This company is working in inexhaustible activities in form of biofuels. This company has
produce around 3.7 million oil per day. This company is servicing in around 70 countries and it
has around 44000 service stations. As per the study of 2014, this company has reserves of barrels
of oil around 13.7 billion. It is one of the largest company that produces ethanol. It is has
subsidiary in US. This company has revenue of $272,156 (CHUANG and Liao, 2010).
Financial performance of Shell AS Royal Dutch:
Record as per First Quarter of 2017 and Fourth Quarter of 2016 (All values in $ million)
Particulars 1st Quarter 2017 4th Quarter 2016
Capital Investment 4720 6913
Divestment 29 3278
Total production for sale 3752 3905
Global liquids realised price in $ 48.36 44.54
Global natural gas realised price
in $
4.29 4.03
Operating expenses 9282 9895
Underlying operating expenses 9181 9844
ROACE (reported income basis) 4.00% 3.00%
ROACE (CCS basis, excludes
identified items)
3.30% 2.90%
Gearing 27.20% 28.00%
First quarter of 2017 was very powerful quarter foe the company. The cash flow of the
company enables the company to reduce its debt and loan burden and it has covered dividend
amount for the third quarter. In this quarter, the company has $ 9.5 billion cash flow from
operating activities and $ 5.2 billion free cash flow. This has provided boost power to the
company. This will provide the company to improve its performance for the next quarter and
also will provide better market to the company (Crane, Matten and Spence, 2013).
Current International Operations:

This company is trading in oil and gas production sector. It is the one of the leading
company in their sector. They are providing their services in other activities that are associated
with it. It is also working in renewable activities. It is trading in petroleum Refining. This
company operates through Upstream segment, Downstream segment and Corporate.
Upstream Segment- this segment combines two sector as upstream international and upstream
Americas. This company is involved in:
 Recovering of crude oil and natural gas (Farndale, Scullion and Sparrow, 2010).
 State change and transportation of gas.
 Extraction of hydrocarbon from oil.
 Wind energy.
Downstream segment- This segment is engaged in manufacturing and production of oil product
and chemical, distribution and marketing of oil product and chemicals. This segments is also
associated in alternative energy and CO2 management.
Corporate segment- This sector is engaged in other activities that are necessary for the company
as:
 Support function.
 Treasury.
 Headquarters.
 Insurance activities.
Legal form and ownership structure
'Shell AS Royal Dutch' has number of board of directors that are regulating the business
of the company. The board of directors of the company is chaired by Charles O. Holliday.
Charles O. Holliday is non executive chairman of the company. The Chief executive officer of
Shell AS Royal Dutch is Ben van Beurden (Ferraro and Brody, 2015). The management ODF the
company is chaired but its Chief executive officer. The board meets on regular basis by calling
board meeting of the company and they discuss about the business of the company. In board
meeting they also discuss about the future goal and performance of the company. In the board
meeting, the discussion regarding the needs for the future execution of plan are taken in

consideration. It has around 90000 employees in present. The chief finance officer of the
company is Jessica Uhl. This company has seven non executive directors and one company
secretary.
2. Business environment of 'Shell AS Royal Dutch'
There are many factors of the environment that has influence over the business. It is
required for the business to consider such factors so that their business can not affected by such
factors. The environment of the company is divided into two parts as micro environment and
macro environment.
Micro environment-
These are the factors that are in the business and some time may affect the business. It is
required for the business to consider such factors as competitor, supplier and employees of the
company. They can easily influence the transformation process of the organisation (Hill, Cronk
and Wickramasekera, 2013).
Following are the micro environmental factors that can influence the business- Supplier- They are the person who contribute to the working of the business. Without
them a business can not run its working. Their services are necessary for the production
of the business. Customer- They are buyer and purchaser. It is required for the business to consider the
point of view of the customer so that company can provide their services to them. They
can directly influence the working of the company.
 Competitors- They are the that can influence the business at any time. It is required for
the company to make the production as per the standard so that they can beat their
competitor in the market. When competitor provides better services than the other
company's affected very much.
Macro Environment-
There are many factors that can influence the business of the company. These are the
external factors that have influence over the business. It is required for the business to consider
such factors so that their business can not be affected (Hopwood, Unerman and Fries, 2010).
Following are the macro business environmental factors as- Economic- Economic factors are those factors that can affect the business at any time.
These are the forces that is uncontrollable. It is required for the business to consider and

plan according to these forces so that their business can not affected adversely. Economic
forces are interest rates, changes in tax rate, inflation, frequent changes in exchange rates
etc. When theses changes arise in the business then it is required for the business to adopt
such changes. The business can not refuse to accept such changes. These forces create
cost of raising finance at higher level. When there is change in exchange rates then it
creates burden on the business to compete with foreign prices. Economic factors are not
under the control of the business and it affects the business. Social and Cultural- The culture and choice of the client changes with country to
country. It is required for the business to adopt such changes so that their production can
be accepted by the customer and client (Levin and et. al., 2012). When the working of a
business affects the culture and social standards of the country where it operates then
there are the forces then can impose on the business to close the firm. It is required for
the firm to operate their business according to the social and cultural factors so that in
future their business can not be affected. If a company wants to trade in global market
then it is required to adopt the culture and the social standards of the same country to run
their business smooth.
 Political- Political factors are those factors that arise due to the political party instability.
These are the forces that are unpredictable and can arise at any point of time in the
business. These factors affect the business very badly and arise due to frequent changes
in political environment. Political factors affect the business in large and it is required to
business to adopt such changes. There are many laws and regulations that are passed by
the government which is in force that affects the business. When there is change in
political party then the party impose new regulations. Due to these changes business
affects adversely.
Following are the political factors that affects the business as:
- Political instability in the country.
- ideology of government.
- Foreign policy. Legal- These are the factors that affects the business. These factors arise due to new legal
norms. When a business operates then it follows the legal norms that are at present but if
there is change in norms and guidelines or enforcement of new law then it affects the

business badly (Louhiala-Salminen and Kankaanranta, 2011). It is required for the
business to adopt the legal norms and guidelines which are in force. It is required for the
business to operate legally so that it can build confidence among the shareholder and the
clients.
 Financial- These are the factors that may arise in the business at any time. It is required
for the business to pay its debts on time so that they can trade in good environment.
These are the factors that many arise due to environment. It is the legal liability of the
company to contribute specific amount out of its profit to the environment and society. It
is required for the business establish effective finance system that can provide assistance
when business requires funds.
3. Analytical approach
Analytical approach is used to solve the problem. First, it break down the problem in
different segments and then started to solve the every segments. Analytical approach is as formal
analysis. Analytical approach uses the analysis. This is used to go to the deeper side to the
problem so that main cause of the problem can be ascertained. It is little harder approach to solve
the problem as comparison to the other approaches. In this, the problem is analysed with climate
change model and R&D model (McCann and Ward, 2010). It stops the problem at intermediate
cause. Problems related to the operation of the company may arise at any time and it is the best
way to solve such problem. It eliminates the cause of the problem from its root.
There is one more approach that are used to solve the problem i.e. intuitive approach.
This approach does not require any serious analysis for solving the problem. It believes to solve
the problem on day to day basis. But this approach is not successful to solve the difficult problem
because this approach is different from the other approaches that used to solve the problem.
There is difference between the analytical approach and intuitive approach. Intuitive
approach does not go to the root of the problem but analytical approach discover the actual root
of the problem so that problem can be solved in effective manner. Any type of problem can be
solves through analytical approach but intuitive approach is not successful in solving large and
difficult problem (Mollenkopf and et. al., 2010). Many problem as due to political reason,
economical reason, environmental, legal factors may arise in the business so this approach is
beneficial to solve these problem.
Following are the approaches of analytical approach as-

1) Regression analysis
This approach believes that outcomes and variable affected by the independent variables.
 Hierarchical linear modeling
This analysis is used when the data are nested. This data occurred when many individuals belong
to a group. In this, researcher finds out the effects of nested information on each stage so that
problem can be solved.
 Ordinary least squares regression
This analysis is used to find out the relation between the dependent variable and independent
variable. In this dependent variables are continuous.
2) Grouping method
It is used to separate observation into purposeful category. There is one grouping method i.e.
discriminant analysis (Needle, 2010). It identify those factors that can be separated from the
group and then measures are taken to solve the issue associated with it.
3) Multiple Equation models
It is used to find put a way from independent to dependent variables. There are two methods as-
 Path analysis
It is used to identify the various causes of outcomes and variables. It is helpful to discover the
value of each path. It is used to discover the relationship between independent and dependent
variables. It can move from independent variables directly. If it moves indirectly then
intermediate variables are used.
 Structural equation modeling
It is one step forward from path analysis. It enlarges the path analysis. This can be possible only
when multiple indicators allows (Pless, Maak and Stahl, 2011).
Following are the business opportunities that 'Shell Royal Dutch' has in Finland:
PESTLE analysis:
Political-
 Due to government changes more infrastructure developments are available to the
company.
 Sometime, changes in policies are beneficial for the organisation to trade in global
market.

 Many international trade agreement took place, it provides many opportunities to the
company.
Economic-
 Economic growth provides the growth to the businesses.
 Decrease in tax rate and other exemption provides opportunities to the business.
 Reduction in interest rate provides better facility to raise fund.
Social-
 When an organisation expenses money for the growth of the society then it raise the
brand value and goodwill of the company.
 Social changes are sometime beneficial as the society can better accept the product and
services of the company.
Technological-
 These are the benefits that helps to the growth of the company and give recognition in the
international market.
 Due to advancement of technology, better services can be provided to the customer and it
will help to enhance the satisfaction level of the customer.
Legal-
 Due to amendments in existing law, it helps to protect the company and its customer.
 New laws are beneficial to the company and it increase the area of operation of the
company.
Environmental-
 Change in the climate sometime creates new industry and provide opportunities to the
business.
 Environmental factors helps to provide better trade to the business and helps to expand
the business of the company.
CONCLUSION
As per the above report it can be concluded that there are many problem that can be faced
by the company. These problem may arise due to political issues, economical issues, cultural
differences etc. these are the external factors that create problem in the business. it is required for
the company to frame their strategies accordingly so that their business can not face problem in
future. It is the duty of the manager to consider such factors in their decision so that when issue

arises then effective measures can be taken into consideration to solve the problem. There are
many approaches available that can be used to problem as analytical approach.

REFERENCES
Books and Journals
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the context of global economic crisis. Amfiteatru economic. 14(32). p.365.
Balkyte, A and Tvaronavičiene, M., 2010. Perception of competitiveness in the context of
sustainable development: facets of “sustainable competitiveness”. Journal of Business
Economics and Management. 11(2). pp.341-365.
CHUANG, C.H and Liao, H.U.I., 2010. Strategic human resource management in service
context: Taking care of business by taking care of employees and customers. Personnel
Psychology. 63(1). pp.153-196.
Crane, A., Matten, D and Spence, L.J., 2013. Corporate social responsibility in a global context.
Farndale, E., Scullion, H and Sparrow, P., 2010. The role of the corporate HR function in global
talent management. Journal of World Business. 45(2). pp.161-168.
Ferraro, G and Brody, E.K., 2015. Cultural Dimension of Global Business. Routledge.
Hill, C.W., Cronk, T and Wickramasekera, R., 2013. Global business today. McGraw-Hill
Education (Australia).
Hopwood, A.G., Unerman, J and Fries, J., 2010. Accounting for sustainability: Practical
insights. Earthscan.
Levin, K and et. al., 2012. Overcoming the tragedy of super wicked problems: constraining our
future selves to ameliorate global climate change. Policy Sciences. 45(2). pp.123-152.
Louhiala-Salminen, L and Kankaanranta, A., 2011. Professional communication in a global
business context: The notion of global communicative competence. IEEE Transactions on
professional communication. 54(3). pp.244-262.
McCann, E and Ward, K., 2010. Relationality/territoriality: Toward a conceptualization of cities
in the world. Geoforum. 41(2). pp.175-184.
Mollenkopf, D and et. al., 2010. Green, lean, and global supply chains. International Journal of
Physical Distribution & Logistics Management. 40(1/2). pp.14-41.
Needle, D., 2010. Business in context: An introduction to business and its environment. Cengage
Learning EMEA.
Pless, N.M., Maak, T and Stahl, G.K., 2011. Developing responsible global leaders through
international service-learning programs: The Ulysses experience. Academy of Management
Learning & Education. 10(2). pp.237-260.
Ramamurti, R., 2012. What is really different about emerging market multinationals?. Global
Strategy Journal. 2(1). pp.41-47.
Tarique, I and Schuler, R.S., 2010. Global talent management: Literature review, integrative
framework, and suggestions for further research. Journal of world business. 45(2). pp.122-133.