Research Project Globalisation (PDF)

Research Project

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION ...................................................................................................3
Background.............................................................................................................................3
Research aims and objectives.................................................................................................3
Research Questions................................................................................................................3
Rationale.................................................................................................................................4
CHAPTER 2: LITERATURE REVIEW ........................................................................................4
Theme 1: Trends of Globalisation..........................................................................................4
Theme 2: Impact of Globalisation on MNC's .......................................................................5
Theme 3: Challenges faced by Globalisation.........................................................................6
RESEARCH METHODOLOGY.....................................................................................................7
DATA ANALYSIS........................................................................................................................10
REFLECTION...............................................................................................................................18
RECOMMENDATIONS...............................................................................................................19
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

Topic: To identify the impact of globalization over corporate structure of multinational
organization and major challenges faced by them. A study on H&M.
CHAPTER 1: INTRODUCTION
Background
Globalisation is a process of interacting and integrating the business processes and other
resources of the company of one nation with that of another one. It involves interaction of two
companies or business organisation in context of people, business processes, governments and
capital of different nations assisted by Information technology. With the help of globalisation,
many business firms can now conduct its business operations at the international level.
Globalisation thus results in facilitation of international trade and investment because of growth
in advance technology, transportation as well as communication processes (Pieterse, 2019). It
assists companies in making improvement in its business processes and procedures by adopting
international ideas, culture etc. This research project will lay emphasis on identifying the impact
of globalisation over the corporate structure of the multinational business organisation. Also, it
will define major challenges which every business firm has to face while conducting their
business operations at the global level.
Research aims and objectives
Title
To identify the impact of globalization over corporate structure of multinational organization and
major challenges faced by them. A study on H&M.
Research Objectives
 To learn about the concept of Globalisation.
 To identify the major challenges faced by H&M while global expansion.
 To determine the influence of globalisation over corporate structure of H&M
Research Questions
 Describe the concept of Globalisation?
 What are the major challenges faced by H&M during the time of global expansion?
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 What are the influences of globalization on the corporate structure of H&M?
Rationale
The main aim behind conducting this research study is to assess the meaning of globalisation
concept in general term. Researcher will be able to understand the impact which will be created
by globalisation on the level of business operation performance. Further, with the help of this
research project, many scholars and researcher will be able to get knowledge about influencing
factors of globalisation over the corporate structure of multinational organisation. Also, it will
provide deep insight about major challenges which many business organisation will have to face
in carrying on their business operations and activities at the global level (Milanovic, 2016). The
research project will help researcher in better understanding of concept of globalisation and its
advantages on the corporate structure of many companies. Also, it will streamline about
preventive measures which can be taken by companies for mitigating the negative impact of
globalisation on the structural form of many business corporate.
CHAPTER 2: LITERATURE REVIEW
Theme 1: Trends of Globalisation
According to Krugman, P. 2017 Globalisation refers to the process where two companies
or two economies come together in order to interact and integrate among their people, culture or
Government. It is the exchange of knowledge, capital, resources from the developed country to
underdeveloped countries. In this process not only developed country were involved but
underdeveloped countries also participation for Globalisation. The implementation of
Globalisation also improved the ease of doing the business in another country but it has
improved the relations between the two economies.
On the contradictory, Rupert and et.al., 2016 says that the because of globalisation their
was increase in the Global warming, Terrorism and Immigration. With the implementation of
Globalisation many economies have faced the problem of immigration and because of this many
underdeveloped countries have been affected. In developed countries there are more
opportunities of doing business as compared to underdeveloped countries and young generation
are attracted to the countries which are giving them higher growth. Also, terrorist attacks have

affected the developed countries. One of the problem of Globalisation is to affect the wealthy
people than the poor.
On the other hand, Potrafke, 2015 says that the Globalization helps in the free trade
which reduces the tariff burdens, value added taxes etc. between the two countries. It is the best
of exchanging the two cultures between the two countries. It gives more opportunity for creation
of jobs and also leads to economic growth of the country. Also, there is competitive advantage
for example if any country is not resources but having man power to do work than one can
exchange resources and other can give their man power to complete the work. Wealthy countries
infuses their capital and technologies in the poor country which help those countries to grow
faster.
Hanson and et.al., 2016 also claims that due to the Globalisation rich countries are
becoming more richer and poor countries became more poor. MNC's takes advantage to exploit
tax heaven in other countries by avoiding tax payments. According to the, the Globalisation has
also lead to the increase in the deadly disease like HIV/ AIDS because of migration of people
from one country to another country. It has also led to the exploitation of labour and also
increase in the human trafficking.
Theme 2: Impact of Globalisation on MNC's
According to KiM and et.al., 2016, Globalisation has increased the opportunity for the
companies and also it has also increased the ease of doing business between the two countries. It
has minimized the cost of partnership formation between the two economies. For example,
Google partnership with the South Korea's LG Electronics and with Taiwan's HTC to minimize
the cost of partnership and also it maximized the strengths of teams all over the world. It also
helped the countries in tax reduction because countries can invest in the countries which are
having less tax and can take advantage of “Tax Heavens”. The companies have the new markets
to access their products and earn higher profits. It helps in entering new markets and also
because of digitalisation and online businesses companies can deliver their products in any
country. Companies can do their business in the countries who are having cheap labours. The
country having cheap labours will reduce the product cost and also company can sell in the
countries who are giving sale price for the products.
Hopper and et.al., 2017 says that because of Globalisation many domestic businesses
have been shut down as they can't compete with the multi-national corporations. For example in
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India many retail shops were shut down due to the entrance of the online companies such as
Amazon, Walmart etc. Many companies uses other countries as dumping yard of their cheap
products. Many companies never invest back into the same host countries in which they are
doing their business rather they invest back in their base countries. This increases the value of
the currency of base countries and decreases the value of currency of host countries. MNC's also
uses transfer prices and tax avoidance to reduce the profits on which they have to pay less tax to
the Government in the host countries. Many companies are claimed that they have imposed their
culture in the host countries.
Theme 3: Challenges faced by Globalisation
According to Cox, 2017 Globalisation was not implemented by many countries because
of which all the counties were benefited by the Globalisation. The big challenge for
implementing Globalisation for many countries was that they would be losing their cultural
identity due to entrance of foreigners in their country. It has also seen that the companies causes
damage to environment, decreases the food safety and weakens the traditional cultural values of
the countries. It also leads to the unethical labour practices by many countries. New online
business and innovative technologies lead to the disruption in many traditional businesses. Many
countries levy high taxes such high tariff barriers in order to go in trade war with the
underdeveloped countries. For example Trump increased the tariff duty on steel products
because of which steel price of many companies increased. This was done to save the domestic
steel companies in US.
Westlake 2018 claims that building the public relations in the new country is a big
challenge for many companies. Also, it is difficult to attract the new customers in the new
geographic region because all countries are having different culture and people in that areas are
also having different tastes and preferences. It is a big challenge for every company that before
entering into country they should learn about the country's culture and prepare themselves
accordingly. Company should also know about the different lifestyles of the people living in that
area. They should also take care of the religions followed by the people in that country because
every country is having their own religion which they follow and it changes from one country to
another. Every country has their own set of rules and regulations and legal authorities to run the
businesses. Companies should fulfil all the legal framework related to that country is also one big
challenge for any company.