Impact of Globalisation on Organisations and Business Strategy

The report analyses the impact of globalisation on organisations and business strategy, focusing on COMECO Company's expansion into Canada, Australia, Mozambique, Gabon, and other countries. It examines the role of digital technology in driving global market expansion and discusses the challenges faced by companies in adapting to changes related to McKinsey's 7S Model and Hofstede's Dimension of Culture theory.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION - ........................................................................................................................1
TASK 1............................................................................................................................................1
1) Concept of globalisation - ......................................................................................................1
2) Driving Factors of Globalisation - .........................................................................................2
3) Impact of Digital Technology upon Globalisation - ..............................................................3
4) PESTLE Analysis of the organisation -..................................................................................3
5) Strategic challenges of organisation - ....................................................................................6
6) Factors to overcome these challenges:....................................................................................7
TASK 2............................................................................................................................................7
1)Impact of globalisation on organisational structure, culture and governance and also
applying Mckinsey's 7S Model to illustrate an overview of organisation..................................7
2) Factors influenced by global operation in a global market and apply Hofstede's Dimensions
of culture to illustrated the impact of organisation - ..................................................................9
3) Ethical and sustainable factors that organisation has to consider in global market - ........11
4) Factors affecting in Decision making in Global Context - ..................................................12
5) Advantages and Disadvantages of strategic expansion routes of the organisation - ...........12
CONCLUSION..............................................................................................................................13
REFERENCE ................................................................................................................................14

INTRODUCTION -
Globalisation is a process by which national and regional economies, society and culture
become integrated through the part of global network, trade, commerce and transportation.
CAMECO Canadian Mining and Energy Corporation company was formed in 1988. It is the
fast growing energy and chemical company based in South Africa. Present study is based on
CAMECO company, as new CEO has taken over the organisation and entering into the world of
globalisation.
This report includes the key factors such as cost, environment, market and competition
influencing the global commerce and trade. Further it describes the complexity of strategic
challenges faced by organisation when operating in a global environment and also relate this
statement with PESTLE Analysis. This report also describes the points as how globalisation
influence the market in application to appropriate theories and models relating to organisational
structure, culture and function and lastly the different barriers in international business and the
decision making power work effectively in the global context.
TASK 1
1) Concept of globalisation -
Globalisation derived from the word globalize which means emerging the international
market of the economic system. Globalisation in easier words means widening, deepening and
speeding up the global interconnection in terms of local, regional and national market.
Globalisation is the social, political, legal and cultural phenomena as ~
Socially it gives opportunity to the company to interact with many people(Salvatore,
2015).
Politically globalisation has shifted its attention and changes to intergovernmental
organisation like world trade organisation [WTO] and United nations [UN].
Legally globalisation has discussed and altered the international law is created and
enforced.
Cultural globalisation express and represents the thought, ideas and values of their
culture.
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Thus, globalisation is resulted in increased international trade market; free moment of
capital goods and services; greater dependence in the global economy and helps to create more
wealth in developing countries(Hamilton and Webster, 2018)
2) Driving Factors of Globalisation -
The factors which influencing the company factors are cost, environment, market and
competition and how company can overcome with these factors. A brief description about these
factors influencing company ~
1. Change in Technology – Technology is that thing which company amends timely to
bring innovation in the market. As company adopts one change in form of telephonic
conversation to digital satellite communication resulted in increasing information
network. Company new and innovative technologies give a vast business to the company
as others companies want to connect to those companies who uses new technologies.
2. Liberalization of cross border trade - After Liberalization, company can easily
expand and reduce other tariffs barriers in terms of import tariffs which is a core
element of globalisation. As in International Monetary Fund [IMF] CAMECO company
can easily import their services at low costs. CAMECO company examines that lowering
of trade barriers included the attachment of national economies at global trade and
services(Virakul, 2015).
3. Economics of scale – Lower transportation costs and lower communication costs are the
main parts of the economies of the scale. Company can deal with more services because
of lower in transportation cost Similarly with communication cost also, as the cost of
international and overseas costs rate reducing the last two decades which results in more
profit in the market.
4. Political factors – The political factors in the organisation make globalisation a big
challenger because the country which is strong in politics and which has their own rules
in that case CAMECO company has top make some other strategy to work in that
country because when there is political instability in the country, globalisation role is
least effective on that purpose(Gaspar and et.al., 2016).
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3) Impact of Digital Technology upon Globalisation -
Technology process is one of the major forces to drive globalisation. Advancement in
technology brings business in large scale to become global market a boom of profit earning
market. Vast technologies results in reducing cost of transportation and communication or
language problem across nations and provide source of raw material and market size also break
down from such effect. As technologies are increasing its impact also increasing on global
market and for that many frauds also arises(Virakul, 2015).
Digitalisation is affecting many steams such as financial policy, employment and
competition in the market. The services and products which are previously analysed or seeing
are now converting into digital e.g. films, travel companies, music, language translation etc.
CAMECO company also used digital technology to improve their market strategy and also bring
innovation in the market. Digital technology had bigger impact on unemployment and high
inflation rate arises. New technologies reduces employment and machines takes place of
employed people which result in poverty and low market strength which indirectly affects the
economy of the country.
CAMECO company innovating new technologies in the market which somehow give
profits to the company but it reduces the employment rate and also the business is global market
is affected by the unemployed person(Gaspar and et.al., 2016).
4) PESTLE Analysis of the organisation -
PESTLE Analysis of CAMECO Company -
 Political Factors CAMECO company closely examines the
factors before entering or investing in the
market such as tax rates, labour welfare and
industry and safety regulation.
 Advantages : Company can make new
strategy which results in profit to their
business because of knowing certain
facts.
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 Disadvantage:Company planning
structure is decreased because
government bring new norms in the
market(Virakul, 2015).
 Economic Factors The economic factors which influencing the
market condition are inflation rate, Interest
rate, unemployment rate -
 Advantage: Changes in market give
chances to company to take initiative to
trained more employees.
 Disadvantage: The strategy of the
company relating to economic factors
are affected due to changes in growth
rate.
 Social Factors Society culture and the way things are doing
impact the social environment and the working
condition of the CAMECO company.
 Advantage - Company engaged in
socials activities which result in
motivating each employees towards
work.
 Disadvantage – social relations create a
huge problem because employees spend
their more together which influence
their work targets.
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 Technological Factors Technology with fast method reflect the faster
growth of the company structure.
 Advantage – Company has developed
vast and high rated technologies which
can easily track every employees work
 Disadvantage – Systems are easily
hacked and which results in lack of data
and in that case company can't trace the
employees so easily.
 Legal Factors Some factors which the CAMECO company
follow are related to health and safety norms,
data protection law
 Advantage – Company use high
technology or scheme to serve the
employees the better protection while
working in the company(Virakul,
2015).
 Disadvantage – Company take care of
each and every employees and their
working strategy so that chances of
fraud is restricted.
 Environmental Factors CAMECO company has to examine carefully
before entering into new environmental
standards such as change in weather condition,
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pollution and many other factors.
 Advantage- Change in environment
related to lot of profit earning because
company can increase their business by
changing the environment condition.
 Disadvantage – Company store their
product for further use which result in
waste of product due to environment
change.
5) Strategic challenges of organisation -
Following are the challenges which the company is facing in globalization and also its
outcome to such changes ~
 Foreign Laws and Regulation:Every country has their own rules and regulation but it
influences the working of other countries as well. As some deals are influenced of not
knowing proper laws and rules of the country. If the company is not aware about the
rules and deal with that company which is established in different country than the
government of that country has liability to impose the penalty for not filling or knowing
the proper rules and regulation(The Biggest challenges of International business, 2017).
 International Accounting:One of the main legal area when CAMECO company comes in
doing business is accounting like tax compliance is the most crucial aspect in accounting
business.
 Cost calculation and global pricing Strategy: Prices of the CAMECO company remains
to be competitive so that if company deals with other company they are not cross
checked or cross examined by their changes in prices.
 Technologies: Rapid and sustainable changes in environment reduced the cost of
transmitting and communicating information. Communicating across the world is the
real biggest challenges the company are facing. Languages are different in different
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country as English is the universal language. Non verbal communication can make or
break business deals.
6) Factors to overcome these challenges:
 Foreign Laws and Regulation: CAMECO company deal with the strong person working
in the opposite company who guides them all the rules and also handle the issues if it
raised while dealing in the company services.
 International Accounting: Every country impose their taxes allotted by the government
for different goods and services and the company dealing with the other company has to
know their tax rates and impose according to that. For e.g. If company buys good from
international market and impose tax of their own country rate than it restricts on dealing
with the company(Virakul, 2015).
 Cost calculation and global pricing Strategy: Company make such strategy much if
checked by the other company they feel reasonable and company also in retune earn
profit with this strategic pricing. For e.g. If company sells uranium to international
market at $5 and the actual price is $2 the company has to make such strategy that the
price they are offering is lower from the market and also they are getting profit from that
selling product.
 Technologies: CAMECO company bring such technologies which easily adopted by the
other companies who are dealing with their business. For e.g. Communications,
language and culture are the biggest challenge for the company and if the company id
dealing for the company which didn't understand the basic language i.e. English than its
difficult for the company to overcome form that problem in that case CAMECO
company launch a mechanism which is named as language converter. Whatever the
background of the company language and culture maybe they can easily understand what
the other person is trying to convey(Amui and et.al., 2017).
TASK 2
1)Impact of globalisation on organisational structure, culture and governance and also applying
Mckinsey's 7S Model to illustrate an overview of organisation.
Organisational Structure ~ The globalisation affects by change in organisation
process. One structure which affects the global market is change in planning strategy. If
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CAMECO company changing their plan it may affects the global market also because planning
is based on one concept as one size is not fit for all similarly one plan to achieve goal is not
suitability for other company to achieve their goal their have to test many plans which directly
or indirect archive the target of the company. CAMECO company implement such plan which
has some logic, capabilities to achieve the target and also careful planning is involved and also
sustain a back up plan of every activity.
Impact on Globalisation has a direct influence on culture factor as culture of the
organisation implement the goal in the market and also affects globally. Every company has
different culture of working in the organisations such as it based on belief, thoughts, customs,
ideas and attitude towards the company. Company image reflected by the way of culture as the
working environment as how they treat employees in the organisation and also employees take
opportunity of working with other employees it all influence the global market.
For successful company, leadership has an important role in the corporate governance
and also it influences the globalisation because leaders play the role in company internal affairs
to trained employees and the training which they are giving implement on company successful
careers. Leaders role is based on taking fair decision and also guide them properly and if they
interpret wrong lessons to employees they also interpret wrong examples in near future which
results in loss of company and also affect the global market because the resources are utilized
globally and also buy from the global market(Amui and et.al., 2017).
McKinsey's 7S Model to illustrate an overview of the organisation – This Model is based
on the theory that an organisation to perform well with theses 7 elements that helps company to
grow more -
 Strategy:CAMECO company has to make some strategy to achieve the goal and take the
company in the path of success.
 Structured:Company structure is designed in such a way that employees and top mangers
can easily coordinate with each other and discuss the issues arising in the work premise.
 System:CAMECO company work with this system so that there are chances of growth
for employees in the company but it affects the global market because it results in
competition in the market.
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 Shared Values:CAMECO company values to provide good quality products in the
market which indirectly needs more raw material and more production activity which
affect the environment matters directly(Amui and et.al., 2017).
 Skills:CAMECO company examines a proper skill of person in the company, if they are
not chosen for that proper department it may result to misuse of resources and also
company information and data are misused.
 Staff:Right peoples in the work place is the biggest challenge in the company because if
the proper staff is not appointed, there are chances of misuse resources which influence
the global market.
 Style:Company changes some leadership style such as typically behaviour with the
employees as employees are the part of the organisation and they are directly or
indirectly influencing the global market.
2) Factors influenced by global operation in a global market and apply Hofstede's Dimensions of
culture to illustrated the impact of organisation -
Factors which influenced by global operation are ~
a) CAMECO company has to make some Strategy such as planning the company goal as
without planning the company misusing the global resource.
b) Under Company Structure the tall path is followed which result in impact of
globalisation as top manager not coordinate with employees which result in lack of
communication(Amui and et.al., 2017).
c) CAMECO company follows the principal System which result in impact of globalisation
because company principle are equal for all and not changed in case of emergency which
result in lack of interest in company which affects the working of the company globally.
d) CAMECO company establish a Shared value in the market in terms of brand name but
changes in time result to change in quality of product which affect the company and their
global market because of facing tough competitors in the market.
e) CAMECO company examines a proper Skill of person because skilled person work
appropriately in the organisations and if the behaviour of the person affects the global
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market than company has to tackle the employees in different way so that they continue
their dignity in the company(Adekola and Sergi, 2016).
f) Company achieve goals when selection of appropriate Staff is there. The main point
which is necessary is that to motivate the employees to achieve targets and to satisfy
their needs and demands so that they feel comfortable in the working department and if
this not happen it reflects the working of the company globally and they lack in target
accomplishment.
g) Company implement such leadership Style in this the behaviour of leaders influence the
global market because the whole deal depend upon the activity which the leader are
analysing and implementing and the same effect will have happened to the opposite
party(Haynes and et.al., 2017).
Hofstede's Dimensions of culture : This model is designed to show the company structure and
their culture-
1. Power Distance Index – Employees of CAMECO company has two powers low and
high, the person who are more capable has high power and person with low skills
and at lower post has low powers which sometimes reflect in the workplace of the
company(Amui and et.al., 2017).
2. Individual versus Collectivism – The workers in the company work individually
which reflect the strength of the company but if they work in groups it shows the
collectivity of efforts achieved in work. Collectivity is scorer because it shows the
loyalty of the people and their understanding with each other in the CAMECO
company.
3. Masculinity versus femininity – The company is employed with both male and
female so the role and work for both the person are equal in the company but it
sometimes impacts on organisation because women can't be assigned to any field
work as CAMECO is a chemical based company by this it reflects the working of
other persons as well(Haynes and et.al., 2017).
4. Low uncertainty avoidance versus high uncertainty avoidance: High score
people face this uncertainty because this didn't affect their working so much but low
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score faced so much complication because they are not known of the facts but they
take it in positive way to learn some important things and new events and initiatives
are granted but it impacts the organisation because organisation can't face such
changes so rapidity.
5. Short term Orientation versus high term orientation – This theory is based on
society rules based on traditions which can be long terms or short term. The
company makes such rules which is for short term follow because to improve or
bring new changes rules are also to be innovated or amended which helps the
organisation to impact less on global market(Adekola and Sergi, 2016).
3) Ethical and sustainable factors that organisation has to consider in global market -
CAMECO Company follow certain ethics and suitable factors in the global market as
~ In terms of ETHICS:
 Respect is the main factor's comes under the ethics and company has to respect each and
every employee whether they are at any post in the company.
 Honour the people who are good performer in the organisation because they are the
ambassadors of the company structure.
 Customer focus is the major aspect because if the company can't focus on customer need
they in return not provide profiles to the company(Haynes and et.al., 2017).
 Persistence is the key to success because not always offer profits but also comes up with
loss so in that case persistence in the biggest aspect and ethics of the company to achieve
success globally.
~ In terms of SUSTAINABLE:
 Corporate social responsibility contributes to provide social, economic and political
benefits to the stakeholders and CAMECO company in return maintain that
sustainability in the market(Cramer, 2017).
 Corporate governance maintains the rules in terms of leadership skills, accountability,
fair decision and transparency to their employees so that they work activity in the
organisation.
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 Environment and culture is the key factor in sustainable growth as company maintains a
culture and friendly environment that employees feel comfortable to work in the
company and discuss any issue with their senior manger without any obligations and
anxiety(Kasemsap, 2018).
4) Factors affecting in Decision making in Global Context -
Following factors which affect the decision making of the company globally can be
Political factors – Political factors affect anytime globally due to change in tax rates and
many new regulation made by government for welfare of employees in the organisation
by this the decision making strategy is amended and also a proper care is taken which is
difficult for the company to take effective decision making rights for the
employees(Cramer, 2017).
Economic factors – Economic factors includes employment factors, inflation rate and
consumer behaviour are the main terms used by the company during decision making
globally. Employment is affected by not providing proper training or good leader to
motivate them which result in lack of decision making process by which the
unemployment situation occurs in the global market(Adekola and Sergi, 2016)
New Technology factors – CAMECO company bring new technologies in market which
is not easily interpreted by anyone results in facing the problems in taking decisions
because mostly data are set on the systems and if they change the technology and not
easily reachable by the other company than it results in huge losses because mostly
numbers and information are evaluated through new technologies(Kundnani and Hayes,
2018).
5) Advantages and Disadvantages of strategic expansion routes of the organisation -
Strategy which the CAMECO company is following has some advantages and
disadvantages -
 Expand your Target Customers:
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* Advantages – CAMECO Company has to expand their business by targeting new customers as
Company is planning to expand their business so a strategy is innovated to target a customer and
earn more profits(Cramer, 2017).
* Disadvantages - To expand the business the biggest disadvantage is that challenge of foreign
culture and their communication network. As company can grow easily in the foreign market
but to maintain their identity and marketing strategy due to changing environment are the
biggest task which company is facing in expanding.
 Diversifies your Business:
* Advantages – International market is the cast area and to continue their standard company has
to face many problems but once company make a brand name in the market then there will the
continuous flow of resources in company funds.
* Disadvantages – To grow business in the foreign market a huge investment is involved,
CAMECO Company taken a financial risk in investing money in the foreign market without
having surety of profit from that business(Kundnani and Hayes, 2018).
CONCLUSION
From the above study it can be concluded that Globalisation has big impact on organisation and
its business strategy. Present Report is based on COMECO Company which is the fast growing
energy and chemical company and also expand its business in Canada, Australia, Mozambique
and Gabon and also in other countries. With this expansion following factors are described to
drive the global market and also explains the importance of digital technology and its impact on
globalisation. CAMECO company is facing various factors in the globalisation and also to
overcome with these changes in relation to McKinsey's 7S Model and Hofstede's Dimension of
culture theory.
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REFERENCE
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Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Amui, L.B.L., and et.al., 2017. Sustainability as a dynamic organizational capability: a
systematic review and a future agenda toward a sustainable transition. Journal of Cleaner
Production. 142,. pp.308-322.
Cramer, J., 2017. Corporate Social Responsibility and Globalisation: an action plan for
business. Routledge.
Gaspar, J. and et.al., 2016. Introduction to global business: Understanding the international
environment & global business functions. Nelson Education.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Haynes, J. and et.al., 2017. World politics: International relations and globalisation in the 21st
century. Sage.
Kasemsap, K., 2018. Mastering business process management and business intelligence in
global business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications.(pp. 76-96). IGI Global.
Kundnani, A. and Hayes, B., 2018. The Globalisation of Countering Violent Extremism
Policies: Undermining Human Rights, Instrumentalising Civil Society. Transnational
Institute.
Salvatore, D., 2015. Managerial economics in a global economy. OUP Catalogue.
Virakul, B., 2015. Global challenges, sustainable development, and their implications for
organizational performance. European Business Review. 27(4). pp.430-446.
Online -
Factors contributing to Globalisation.2019.[Online].Available
through<https://revisesociology.com/2017/05/24/factors-contributing-to-globalisation/>
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The Biggest challenges of International business.2017.[Online].Available
through<https://www.hult.edu/blog/international-business-challenges/>
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