Impact of Globalisation on Corporate Structure of H&M

This study aims to identify the impact of globalisation on the corporate structure of multinational organisation and major challenges faced by them, using H&M as a case study.

RESEARCH
PROJECT

Table of Contents
TOPIC:- ...........................................................................................................................................1
CHAPTER 1: INTRODUCTION ...................................................................................................1
Overview................................................................................................................................1
Background.............................................................................................................................1
Rationale.................................................................................................................................2
Aims.......................................................................................................................................2
Research Objectives: .............................................................................................................2
Research Questions: ..............................................................................................................2
CHAPTER 2: LITERATURE REVIEW.........................................................................................2
The concept of Globalisation..................................................................................................2
The major challenges faced by H&M while global expansion..............................................3
The influence of globalisation over corporate structure of H&M .........................................4
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................4
CHAPTER 4: DATA ANALYSIS AND INTERPRETATIONS (1500)........................................6
CHAPTER 5: RESEARCH OUTCOMES....................................................................................17
Covered in PPT.....................................................................................................................17
CHAPTER 6: REFLECTION & RECOMMENDATION FOR ALTERNATIVE RESEARCH
METHODOLOGY........................................................................................................................17
Reflection.............................................................................................................................17
Recommendations................................................................................................................17
Alternative research method.................................................................................................18
CHAPTER 7: CONCLUSION......................................................................................................18
REFERENCES..............................................................................................................................19

TOPIC:-
“To identify the impact of globalisation over corporate structure of multinational organisation
and major challenges faced by them.” A study on H&M.
CHAPTER 1: INTRODUCTION
Overview
Globalisation is refers to the process of integration among business, people and
government throughout the world. In another words it can be said that globalisation leads to
integration of markets that help in smoothing up flow of trade and interconnect the economies.
Globalisation plays a crucial role within the growth and development of a company as it provide
a medium through which a business can target larger number of customer, be able to approach
untapped market which contribute toward improving its brand image at market place (McCann
and Acs, 2015). But apart from all this globalisation also have an influence over corporate
structure of an organisation as by expansion of business operations and manner in which they
operates get changed. Hence, it become very essential for an organisation to manage its corporate
structure much effectively by maintaining proper coordination among each department so that it
become easier to deal with challenges at global market with mutual efforts of various
department. In order to investigate this H&M organisation is consider which is a multinational
retailer that is headquartered in United Kingdom.
Background
Corporate structure is refers to the organisation of several different departments or
business unit in order to align the efforts of employees toward accomplishment of organisational
goals and objectives (Sethi, 2016). But their mutual efforts get disturbed while expanding
business internationally, hence it is very crucial for an organisation to maintain collaboration
among them in order to achieve corporate goals and objectives. For investigating the impact of
globalisation over corporate structure of multinational organisation and challenges that a
company have to face H&M is considered. It is a multinational retailer which operates a chain of
store throughout the world in order to offer fast-fashion clothings for women, men, teenager and
children. It is second larger clothing retailer in world and operates in more then 62 countries.
Hence to maintain its market position it is very essential for company to maintain its corporate
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structure effectively that support in dealing with challenges at global level (Monshipouri, Welch
and Kennedy, 2017).
Rationale
The main reason behind conducting this investigation is to determine several challenges
that an organisation has to face while expanding its business at global level. By performing
investigation researcher would be able to enhance knowledge in term of globalisation and
changes it bring within the corporate structure. In addition to this, the scope of research is very
broad as it can be used for academical purpose that help in students to learn about the manner in
which an organisation enter into global market by considering the experience of H&M.
Aims
“To identify the impact of globalisation over corporate structure of multinational
organisation 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 ?
 What are the influences of globalisation on the corporate structure of H&M ?
CHAPTER 2: LITERATURE REVIEW
The concept of Globalisation
According to the view point of Didem Buhari Gulmez, 2017 globalisation is the process
through which technology, product and services are spread all over the world for the purpose of
expansion of business. There is improvement in economic, financial and trade policies of
different companies. There is difference in working style of organisation at national land
international level. Hence there is integration of different resources such as financial bodies,
individuals, groups and governmental bodies. With working at international level, mangers of
H&M is able to expands consumer base but there is requirement of having knowledge about
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changes which are taking place in external market. There is free movement of products and
services from one place to another considering different working policies. In order to access
knowledge about globalisation, there is requirement of managers of H&M have to analyse which
market have scope for growth and then policies has to be farmed to implement it.
With working at international level, managers of H&M is able to achieve economies of
scale with analysing production cost. Production cost can be reduced with analysing labour cost
and cost of raw material. When consumer have more demand for product and services then
production increase and it assist in reducing overall production cost. When cost of raw material
and production is less, then managers of H&M provides it to consumers at cheap rate
(Bachmann, and Pereira, 2014). This is fruitful for growth and development of association. With
globalisation of H&M company will be able to operate its business in more than one country but
there are different aspects which gets negatively influence over its growth. This may include
legal barriers, difference in preference of customers, language barrier, cultural barriers etc. that
may influence the performance of company to larger extend.
The major challenges faced by H&M while global expansion
According to Olimpia and Stela, (2017), In the world of fashion marketing where
shopping is fast moving online, H&M is going in a downfall position day by day. They are
thinking about the expanding their business but because of various challenges they have to face
various difficulties. These challenges related to the high level of competition, changing
consumers demand, different tax structures, different rules and and so on. These challenges
create a big issue for them to expand their business in other countries.
As H&M want to expand their business but because of their rivals like Zara, Gap, M&S
and many more, they have to change their marketing strategies to beat their competitors. In the
world of online transactions they have to launch their own app from where they can attract
consumers from all over the world. They have to considered all the rules and regulation of others
countries if they want to prevent themselves from any disputes and want to sustain for a long
period of time (Scott, 2015). Moreover, if they want to compete their competitors at international
level then they should evaluate their consumers behaviour, choices, and pricing preference in
their production process so it will help them to meet from all the consumers demand and
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expectations. It will help them to increase their market value, productivity and profitability
which results sustainability in the intentional market for a longer period of time.
The influence of globalisation over corporate structure of H&M
According to Tan and Goh, (2014), Corporate management of H&M is based in the
Stockholm from which different departments of them managed and organised their work. It
includes designing of products, advertising and marketing, finance and accounts etc. through
which they complete their work with efficiency and effectiveness.
H&M is operating their business at global level which determines that structure plays an
crucial role for the globalisation or developing of them. They are operating their business in
different countries so specifically for each country office is responsible to manage and complete
the activities of different departments. Approximately in 16 countries H&M is successfully
operating their business due to 16 different departments of production are responsible to provide
and deliver their products among 700 independent supplier that works for the H&M. In present
market conditions all the organisation and industry are performing their operations at global level
(Weeks, 2017). Therefore H&M also expands their business at global level due to which they
also open their production in Europe, Asia and Africa because it helps them to manufacture their
at low prices. Along with this it also helps them to deliver their products with in minimum time
period as it assist towards the local growth of the company. H&M operates their business in 37
different countries which helps them to increase their market share and the number of customers
that increases their revenue as well as profits also. Further the other benefits is that it helps them
to recruit effective employees at cheap rates, Like in developing countries employees work with
more efficiency because of high income and low employment rate.
CHAPTER 3: RESEARCH METHODOLOGY
Research methodology is the process is used to determine, collect and analysis information. In a
research the methodology show the overall dependability and validity of study (Kennelly, 2019).
The methodology includes survey, publications, interviews and more techniques that are used to
gather both historical and present data. Some tools and techniques are as follows:
Research philosophy:- Research philosophy is very important part of research
methodology and a phenomenon by which data is gathered, analysis, and used. Some of the
philosophies are positivist,pragmatist etc. In this project research positivist philosophy is used.
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Positivist is very helpful in understanding different features that will help in proper decision
making of research.
Research approach:- It is systematic plan and process that includes particular steps of
assumption to detailed method of data collection, analysis and interpretation (Quinlan, Babin,
Carr and Griffin, 2019). There are two method of research approach that are inductive and
deductive. In particular research inductive research is used because this is supported qualitative
method. Inductive research cover every small and big aspects related to the research topic.
Research method:- research methods are the plan, process and techniques that is used to
collect data for analysis and find out new information. There are two different type of research
method that are used as a tool of data collection (Taylor, Bogdan and DeVault, 2015). It
includes qualitative and quantitative method. In this investigation qualitative method is used
because it provide degree of knowledge about performance appraisal also provide more depth
and qualitative knowledge about the topic and project that will help in research.
Source of data :- the medium from which data is collecting to conduct particular
research more effectively and effectively. There are two sources of data collection that are
primary and secondary (Walliman, 2017). In this investigation both the source of data collection
are used. In primary researcher collect information through questionnaire and in secondary
relevant information is collected from the existence data presented in books, research papers, etc.
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CHAPTER 4: DATA ANALYSIS AND INTERPRETATIONS
It refer to most essential part of a research which focuses toward proper analysis and
evaluation of data that is gathered from investigation in order to extract appropriate conclusion
from the findings. In addition to this it also support in determining the main cause behind a
particular issues so that measures to overcome can be recommended (Kumar, 2019). For
performing this investigation questionnaire is used and data through this will be evaluated and
interpreted using thematic approach.
Questionnaire
Q1 Are you aware about the concept of globalization?
a) Yes
b) No
Q2 As per your view point does global expansion support in growth and success of an
organization?
a) Yes
b) No
Q3 What impact does global expansion have over the corporate structure of H&M ?
a) Positive
b) Negative
Q4 Which factors affect corporate structure of H&M at international level?
a) Change in consumer demand
b) Technological up-gradation
c) Personal goal of employees
Q5 Is effective corporate structure beneficial for success and growth of H&M at international
level?
a) Yes
b) No
Q5 What kind of benefits does H&M get after globalizing its operations?
a) Larger customer base
b) Access to advancement
c) Foreign investment opportunity
6

Q6 What are the major challenges that H&M has faced while globalizing its operations?
a) Foreign laws & regulations
b) Cultural and communication differences
c) Trade barriers
Q7 Which of the following departments of H&M majorly get affected with working at
international level?
a) Human resources
b) Operational unit
c) Marketing department
Q8 Which level of management in H&M is responsible for corporate structuring at global level?
a) Top level
b) Middle level
c) Lower level
Q9 Recommend the ways through which H&M be able to deals with challenges at global level?
Data interpretation
Theme 1: The concept of globalization
Q1 Are you aware about the concept of
globalization?
Frequency
a) Yes 40
b) No 10
7

Interpretation:- As per the above mentioned information it has been found that 40 out of
50 respondents are aware about the concept of globalization and manner in which it contribute
toward enhancing the market share of an organization. Despite of this 10 out of 50 respondents
said that they don't have any idea regarding the concept of globalization and manner in which it
is used by an organization.
Theme 2: Global expansion support in growth and success of an organization
Q2 As per your view point does global
expansion support in growth and success of
an organization?
Frequency
a) Yes 30
b) No 20
8
a) Yes b) No
0
5
10
15
20
25
30
35
40
40
10

Interpretation:-according to the information which is provided above it has been found
that 30 out of 50 respondents believe that globalization of business operations support a company
to achieve growth as well as success at marketplace. This is because it help in creating brand
awareness and also build up new market to target from particular product or services. Despite of
all this 20 out of 50 respondents are not agree that global expansion contribute toward
organizational success and growth as new market brings up several challenges such as higher
competition, new market demand which all influence the performance of company at
marketplace.
Theme 3: Impact that global expansion have over corporate structure of H&M
Q3 What impact does global expansion have
over the corporate structure of H&M ?
Frequency
a) Positive 30
b) Negative 20
9
a) Yes b) No
0
5
10
15
20
25
30
30
20

Interpretation:- According to the information presented above from the investigation it
has been found that 30 out of 50 respondents believes that global expansion will bring positive
impact over the corporate structure of and organization. This is because global expansion support
in improving business structure of H&M by providing an opportunity to integrate knowledge of
employees belongs to different culture. But on the other hand 20 respondents said that global
expansion sometimes have negative influence over the corporate structure as expansion
sometimes create communication barrier which in turn affect the understanding of employees
regarding their roles and responsibilities.
Theme 4: Factors affect corporate structure of H&M at international level
Q4 Which factors affect corporate structure
of H&M at international level?
Frequency
10
a) Positive b) Negative
0
5
10
15
20
25
30
30
20

a) Change in consumer demand 20
b) Technological up-gradation 10
c) Personal goal of employees 20
Interpretation:- As per the information provided above it has been found that 20 out of
50 respondents said that change in customer demand is the major factor which affect the
corporate structure of H&M as the operations are designed as per the expectation of customers.
On the other side 10 respondents state that technological up-gradation is the major factor that
affect the corporate structure of company as it implementation change4s the manner in which
operations performed. Despite of all this 20 respondents said that personal goals of employees
are the major factor which affect corporate structure as according to this role4 and
responsibilities assigned to employees.
Theme 5: Corporate structure beneficial for success and growth of H&M at international
level
Q5 Is effective corporate structure
beneficial for success and growth of H&M
Frequency
11
a) Change in consumer demand
b) Technological up-gradation
c) Personal goal of employees
0
2
4
6
8
10
12
14
16
18
20
20
10
20

at international level?
a) Yes 40
b) No 10
Interpretation:- As per the data presented above it has been found that 40 out of 50
respondents are agreed with the fact that effective corporate structure is beneficial for the growth
as well as success of H&M at global level This is because it help in ensuring effective k and
activities that leads to accomplishment of organizational goals. On the other side 10 respondents
are not agreed with this as corporate structure won't leads to success until and unless employees
be able to deal with threats present at international level. Hence it can be interpret that majority
of people believes that effective management of corporate structure will support in aligning the
efforts of employees toward organizational goal that leads to growth and success of H&M at
international level.
Theme 6: Kind of benefits does H&M get after globalizing its operations
12
a) Yes b) No
0
5
10
15
20
25
30
35
40
40
10

Q6 What kind of benefits does H&M get
after globalizing its operations?
Frequency
a) Larger customer base 20
b) Access to advancement 20
c) Foreign investment opportunity 10
Interpretation:- According to the data presented above it has been interpreted that 20 out
of 50 respondents said that by globalizing its business operations H&M will be able to get
benefited with larger customers base as internationalization help in providing a benefit to access
new market. On the other side 20 respondents said that by internationalizing business H&M get
benefited with access to advancement as they would be able to implement technologies used in
another country for improving its operations and also get access to high skilled employees. But
on the other hand 10 respondents said that H&M will get an opportunity of foreign investment as
by globalizing business in new market it become able to invite investors from that market to
invest in company.
13
a) Larger customer base
b) Access to advancement
c) Foreign investment opportunity
0
2
4
6
8
10
12
14
16
18
20
20 20
10

Theme 7: Major challenges that H&M has faced while globalizing its operations
Q7 What are the major challenges that
H&M has faced while globalizing its
operations?
Frequency
a) Foreign laws & regulations 20
b) Cultural and communication differences 20
c) Trade barriers 10
Interpretation:- From the information mentioned above it has been interpreted that 20 out
of 40 respondents said Foreign laws & regulation is the major challenge that affect the operations
of H&M at global level. But on the other side 20 respondents said that cultural and
communication differences is the major issue that influence business operation as it create
language barrier among employees. But despite of this 10 respondents said that trade barrier is
major challenge that H&M has to face at global level as it required to deal with traffis, import-
export charges and barriers etc.
14
a) Foreign laws & regulations
b) Cultural and communication differences
c) Trade barriers
0
2
4
6
8
10
12
14
16
18
20
20 20
10

Theme 8: Departments of H&M majorly get affected with working at international level
Q8 Which of the following departments of
H&M majorly get affected with working at
international level?
Frequency
a) Human resources 30
b) Operational unit 10
c) Marketing department 10
Interpretation:- After evaluating the data presented above it has been interpreted that 30
out of 50 respondents believed that human resources department is highly affected unit while
global expansion as it is responsible for recruiting and assigning work to employees at
international level. But 10 respondents said that operational unit get highly affected as it has to
set up and management operations of company as per the new market scenario. On the other
15
a) Human resources
b) Operational unit
c) Marketing department
0
5
10
15
20
25
30
30
10 10

hand 10 respondents said that marketing department is highly get affected while working at
international level as it has to interact and formulate promotional & sales activities as per the
consumer's expectation.
Theme 9: Level of management in H&M is responsible for corporate structuring at global
level
Q9 Which level of management in H&M is
responsible for corporate structuring at
global level?
Frequency
a) Top level 30
b) Middle level 20
Interpretation:- According to the information mentioned above information it can be
interpreted that 30 out of 50 respondents believe that top level management in H&M is
responsible for ensuring proper corporate structuring at global level. As top management is
16
a) Top level b) Middle level
0
5
10
15
20
25
30
30
20

responsible fro formulating strategies over which organization work. But on other side 20
respondents believe that middle management is responsible for corporate structuring as they hold
a link between top and lower employees so that they assist in proper implementation of corporate
structure.
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CHAPTER 5: RESEARCH OUTCOMES
Covered in PPT
CHAPTER 6: REFLECTION & RECOMMENDATION FOR
ALTERNATIVE RESEARCH METHODOLOGY
Reflection
I am glad that I got this opportunity to conduct investigation over such a great topic i.e.
“To identify the impact of globalisation over corporate structure of multinational organisation
and major challenges faced by them.” A study on H&M. By conducting investigation I would
also be able to able develop my researcher skills that support me in future projects. From this
investigation I have learnt about several tools and techniques that are used for performing
investigation effectively such as in this investigation both primary and secondary data collection
methods has been used. This support in representing most authenticated information by using
secondary data as a base to explore further information from primary sources in order to evident
them from past findings. While performing this investigation I went through several issues such
as time was very limited, respondents are not clear with their answers and some of them are not
interested in responding. But still I tried my best to perform this investigation effective so that
proper outcomes can be achieved.
Recommendations
By performing investigation it has been found that H&M go through several issues while
performing operations at international level. Hence, in order to deal with such issue following
recommendations are provided to H&M are:
 H&M must perform market survey in order to determine the need of customer along with
threats present at international level so that proper strategies can be formulated as per the
new market scenario.
 H&M must hire legal consultant from the country where it want to expand in order to
formulate effective corporate structure as per the foreign laws and policies which reduce
the chances of legal compliances.
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Alternative research method
For performing this investigation questionnaire has been used as the time provided for
research is very limited and questionnaire support in gathering data from large number of people
at relatively lower period of time. But despite of this interview can be used as an alternative
method of investigation as it provide face-to-face interaction among two people that help in
exploring thoughts of respondents more clearly.
CHAPTER 7: CONCLUSION
From the above conducted research it has been found that corporate structure is one of
the major part of an organisation which get affected while global expansion due to change in
working culture as well as laws followed by a particular country. This help in improving the
procedure of working within the organisation that leads to specialisation. But apart from this a
company has to face several different challenges at global market. Hence by investigation it has
been found that majority of people believes that Foreign laws & regulations, Trade barriers and
Cultural differences are the major issues that a company have to face at international market.
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