Influences of Global Business Environment on Organizational Functions

This document analyzes the key factors that drive global commerce and trade, such as cost, market, environment, and competition. It also evaluates the strategic challenges faced by organizations in a global environment and the influences of globalisation on leadership, structure, culture, and functions. The document further discusses the influences of ethical and sustainable globalisation on organizational functions.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1. Analyse key factors of cost, market, environment and competition that drive global
commerce and trade....................................................................................................................4
M1. Critically analyse the impact that key factors have upon the global business environment
in terms of benefits and challenges.............................................................................................5
TASK 2............................................................................................................................................6
P2. Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples..................................................................6
M2. Critically analyse strategic challenges in context of risk and diversification strategies and
the supply chain flow..................................................................................................................7
D1. Critically evaluate global business environment considering the opportunities and
challenges....................................................................................................................................7
TASK 3............................................................................................................................................7
P3. Evaluate the influences of globalisation on organisational leadership, structure, culture
and functions...............................................................................................................................7
P4. Evaluate the influences of ethical and sustainable globalisation on organisational functions
.....................................................................................................................................................8
M3. Critically evaluate global market influences in application to appropriate theories and
models relating to organisational structure and culture..............................................................9
TASK 4..........................................................................................................................................10
P5. Evaluate the different ways decision making can work effectively in a global context.....10
P6. Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.....................................................................................................11
M4. Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome.....................................................................12
D2. Critique significant strategies which are opted for business environment and justify
recommendations......................................................................................................................12
CONCLUSION..............................................................................................................................12

REFERENCES..............................................................................................................................13

INTRODUCTION
Global business environment is the concept which significantly explain the overall
environmental conditions undertaking the prominent research of market considering various
factors. For this, the significant factors leads to impact the decision making and other strategies
of organisation which is concerned with running an organisation (Kokodey, Gnezdova and
Lomachenko, 2018). Global business environment is the broad concept undertaking various
opportunities and resources and also consider risk factor as well. To carry forward this study,
HSBC Holdings Plc is considered which is the British multinational bank and financial service
holding company and also has well reputation in Europe. Company also has around 3900 offices
in 65 countries across Africa, Asia, Europe, North America and South America. The report
covers the effective analysis of key factors including globalisation and identifying the strategic
complexities which are involved in global business operations. Influential global business
practices are considered regarding culture, structure and functions and other concerning
strategies are taken which leads to impact decision making.
TASK 1
P1. Analyse key factors of cost, market, environment and competition that drive global
commerce and trade
Globalisation is the essential part of modern business practices that leads to offer huge
platform to company considering the operations and revenues without any issues for the
domestic and international market (Shageeva and et. al., 2017). Hence, globalisation is the
process of segregating market in the global economy that leads to enhance the effective
connection for the business and separate economies. Few factors of cost, market, environment
and competition tends to drive for the global trade and also tends to undertake trade or
globalisation. These factors are discussed below for HSBC:
Cost
Difference in taxes: It leads to depict the prominent desire of company which is
beneficial only because of lower labour cost and other factors which are present across the nation
and also influence global trade. For example, in China labour cost is low which is beneficial and
profitable considering the opportunities for HSBC to work and save cost for market.
Market

Market Share: This factor is concerned with market conditions and also influence the
global trade of company to work in the new business environment and for the market share.
Globalisation tends to offer effective access to the new customer base and also have diversified
target audience (Chasdi, 2017). Therefore, it leads to procurer the benefits of higher market
share for HSBC to move at the international market by motivating global trade concept.
Environment
Continuous innovation: Every country has their own identify and natural resources by
which they tends to generate various artificial resources in terms of having innovative
approaches. For this, the environment leads to influence globalisation for HSBC and also make
effective use of unique resources in various environment by having their presence in terms of
earning profitability.
Competition
Enhancing need to be more accessible: Market is expanding towards the globalisation
and for this, HSBC also tends to move to the new location considering their operations in terms
of becoming more accessible to enhance their sustainability. In terms of having strong and
effective competition in new market company tends to make proper use of its strengths and
competitive edge (Tallman, Luo and Buckley, 2018). Moreover, this factors also tends to offer
effective knowledge to the company in terms of enhancing their overall power over the other
competitors in business environment.
M1. Critically analyse the impact that key factors have upon the global business environment in
terms of benefits and challenges
It depict the suitable key factor which is undertaken by the HSBC and consider
willingness of company to move to the broad market area in terms of having effective
development for the market share, cost, competitors and environment. These factors tends to
offer various benefits to the company at the time of going at the global level including high
market share, lowering cost, diversified resources and innovative working. For this, the
prominent challenges can be faced by HSBC undertaking the financial risk and uncertainties in
sales.

TASK 2
P2. Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples
Strategy is the term that leads to support the significant changes in terms of
accomplishing long term objectives that helps in neglecting the impact for the competitive
pressure and risk. For this, the global business environment depict the significant hurdles at the
time of trading. Therefore, for this, the businesses and nations also tends to become
interdependent considering the critical system which is not prominently identified and
understood considering the unpredictable factors (Brenner, 2018). As it tends to make effective
decisions considering the difficulties significantly in strategic way. Hence, few strategic
difficulties are mentioned as underneath: Uncertain political laws: Every organisation has their representatives in terms of
regulating for effective working for the prominent development of specific area. For this,
the significant agencies are termed as governments in terms of having political decisions.
In relation with HSBC they tends to expose for the number of political environment and
offices as well. For this, the strategical difficulties for the company is followed
undertaking the norms in relation with significant area that tends to impact the prominent
strategies of company (Bhagra and Sharma, 2018). It depict the suitable challenges
regarding the instability for the political bodies and overall environment. For example,
laws tends to change because of current execution of Brexit deal of 2016 that tends to
make changes in laws and their overall impact of risk.
 Exposure to broad economic challenges: Business environment is filled with wide
variety of opportunities which are grabbed for the global trade that takes place in the
market. For this, organisations tends to move from separate economies to explore their
opportunities in terms of having effective success. For this, prominent area tends to have
unique economy and also some stable and unstable factors considering the predictions. It
leads to create the strategic challenge for the managers of HSBC as the economic trends
considering various market (Kotabe and Helsen, 2020). For instance, because of COVID-
19 the economic stability of the world gets impacted and it depict the wide leakage in
HSBC strategies for the economic dynamics to create difficulties at the time of
operations.

M2. Critically analyse strategic challenges in context of risk and diversification strategies and the
supply chain flow
The global business environment is impacted by huge factors which are uncertain and
risky. For this, company tends to hinder by these factors by conducting market survey in terms of
having insight regarding the essential factors and issues that leads to mitigate actions. For this,
few strategic difficulties are faced by HSBC are because of political instability, unknown
economic trends are supply chain is considered. Hence, the strategic issues are quite risky for
company in terms of having impact on the unpredictable conditions.
D1. Critically evaluate global business environment considering the opportunities and challenges
Therefore, globalisation tends to have both favourable and unfavourable factors which
are impacted and attached in terms of having prominent experience by the HSBC holdings and
also undertake their working respectively. It tends to undertake significant offering of company
for the leading logistics tag line of brand. Besides this, effective diversification of location is
analysed from nation to nation and their varies which are developed as per the requirements
which are collected for the effective data in market by considering effective plans.
TASK 3
P3. Evaluate the influences of globalisation on organisational leadership, structure, culture and
functions
Organisational function undertake effective impact of number and concerning actions,
strategies, principles and activities. For this, the prominent factors are integral for an organisation
and also incorporated for the prominent operations and functioning regarding the revenue
generation activities (Ganamotse and et. al., 2017). Moreover, the globalisation concept is
incorporated for the business and also impose the impact on the overall company and concerning
practices. Therefore, thorough analysis is presented as below:
Influence on leadership
Leadership referred in the diverse way undertaking the skills, role, ability and effective
responsibility which are delegated to one individual and many more. In simple way, effective
actions are performed by individuals who is termed as the leader that tends to hold various job
roles among their staff members in terms of having right direction and also keep them motivate
to accomplish goals and objectives. In terms of HSBC, their leaders tends to opt diversified

methods in terms of working in terms of creating and maintaining synergy for the operations
around the global area in which company deal.
Influence on culture
The culture of company depict the values, behaviour, attitude and principles of
individuals in terms of developing suitable base for subordinates while supporting them for
work. As per this factor, globalisation is effective factor for HSBC by opting Hofstede culture
theory which is useful in understanding the differences in diversification for every culture and
also depict prominent ways to do business considering the particular area. This theory of culture
provide the in-depth vision for the culture and also flourish the global market area in terms of
opting effective functioning in effective way (Gandhi, 2017).
Influence on structure
The structure of company is the effective framework for the power, communication,
authority and flow of effective responsibilities which are delegated to employees. For this, the
various types of structure is considered on the grounds of proficiency. HSBC tends to follow
divisional structure in which company tends to develop their group as per the geographical area
by incorporating for the globalisation strategy (Lasserre, 2017). For this, the divisional structure
tends to be considered as also eliminate the complexities in terms of delegating effective amount
of power to their staff members and team considering the prominent region for suitable potentials
in an effective manner.
Influence on functions
Globalisation is the process in terms of moving to the international market and also tends
to develop the suitable presence of company. For this, the company tends to have effective
operations which are involved in various operations in systematic way to achieve suitable
objectives (Montenegro, 2017). Moreover, considering the globalisation it leads to undertake
prominent operations which are evolved for the effective management and opt several
management practices including six sigma, TQM and so on for the wider context which is based
on various organisations for the separate business environment.
P4. Evaluate the influences of ethical and sustainable globalisation on organisational functions
In an organisation, ethics depict the business ethics which is helpful in executing
effective business policies and principles in terms of having controversial subjects like corporate
governance, CSR, insider trading and so on. In relation with ethical globalisation that leads to opt

and execute ethical practices at the time of moving business to the new market and consider
diverse culture.
Sustainability depict the prominent concept that leads to put emphasis on the fulfilling the
basic needs of company and consider the upcoming needs which are not compromised. For this,
the effective idea behind sustainability is relies on the three basic factor like environmental,
social and economical. The sustainable globalisation depict moving from new market to other
considering the way of doing business for the present operations considering the effective
sources and prominent requirements which are not impacted.
In relation with HSBC they have effective base for their new place considering the
arrange for the storage and other investments in terms of developing business. It depict the
prominent cost regarding the consumption process by which company tends to develop suitable
efforts (Hill and et. al., 2017). It leads to impact the ethical and sustainable globalisation for the
functioning of company which is essential. Away with this, the sustainability factor depict the
globalisation and for HSBC they leads to make effective assumption for suitable ideas and
prominent resources which are required for effective trading in global market. As per this
requirements, they tends to make suitable arrangements for the effective resources in terms of
accomplishing the needs instead of eliminating cost of resources. For instance, employees are
recruited for the new locations for the office and working pattern.
M3. Critically evaluate global market influences in application to appropriate theories and
models relating to organisational structure and culture
HSBC tends to make effective arrangements as per the global factors that tends to align
with leadership functions, culture and overall structure. For this, company tends to moved from
the Hofstede culture theory in terms of considering global approach for the effective structure
which are joined for the global needs for the effective developed of synergy. The significant
results are achieved for both the long and short period of time which are quite productive in an
effective way.

TASK 4
P5. Evaluate the different ways decision making can work effectively in a global context
McKinsey's model is helpful as it is aligned and integrated with various brands. It tends
to have seven strategies which are opted effectively in terms of having effective decisions
considering the global perspective for prominent brand image. Its elements are discussed as:
 Strategy: It depict the effective plan for HSBC for the developing and internationalising
the business to accomplish competitive edge for the new area for business for their
existing competitors (Willcocks, Lacity and Craig, 2017). It is quite possible for the
effective brand and also tends to present for the outstanding method for the market to
gain large customer attention. Structure: It depict the effective method for the company in terms of conducting
business. In terms of HSBC they tends to consider divisional structure as for this

company tends to have effective operations which are required for the suitable power for
the new place of work. System: It depict the suitable system for the day to day business activities and for this,
leaders of HSBC tends to make effective use of concerning leadership style in terms of
making individuals to perform prominently regarding their job roles to achieve suitable
objectives and goals. Skills: It depicts the prominent capabilities of manpower of HSBC as at the time of
internationalisation, company must recruit new employees and organise hiring for
effective selection process (Uluskan and Godfrey, 2018). It depict the effective result
considering the number of strategic decisions and actions of management which are
considered for company regarding effective human resource needs. Style: In this, leaders are important in terms of directing employees and smooth running
of the operations in terms of keeping their staff members encouraged towards the
accomplishment of their objectives. Therefore, in terms of doing business prominent
leadership style is considered in terms of taking effective decisions which depends on the
overall situation of task. Therefore, leaders tends to develop effective relation among
employees by considering the overall situation to opt best leadership decision. Staff: It depict the prominent decision making of company by representing the effective
roles and responsibilities which are required and assigned to other individual (Manning,
Kannothra and Wissman‐Weber, 2017). For the decisions are taken on the global context
considering the working needs which are accomplished under expertise individuals and
also consider their effective field of working.
 Shared value: This factor depict the core values of an organisation which is reflected
considering the culture of company and working pattern. Therefore, it depict the critical
decision which is made in terms of global expansion and effective movement
considering the culture and also integrated with the culture of HSBC regarding the favour
of core values of an organisation as per their effective vision.
P6. Determine and articulate the various routes to internationalisation an organisation may adopt,
including key barriers
Internationalisation is the effective process and option for business in modern world and
also quite competitive in terms of sustaining within the industry considering the major options

for business in terms of effective expansion at the international markets. Therefore, there are
various ways which are opted by company discussed below:
Acquisition: It is the common form of internationalisation strategy in which company
tends to opt effective method to move to new place for their work. In terms of HSBC, company
tends to opt this method for the other foreign countries in which they want to expand. Acquiring
current company can be beneficial for brand and current resources as when they are integrated
company tends to add value for the effective functioning and operations of company in fresh
business environment (Shageeva and et. al., 2017). Barriers: The prominent barrier for acquisition way is that employees and company tends
to belong from the different culture and also tends to dis balance the working pattern by
arising conflicts among them.
Franchising: It is the non equity based way for the internationalisation in which
franchisee tends to purchase rights from the franchiser in terms of considering the business
activities by considering their names and intellectual property (Chasdi, 2017). It is beneficial as
it leads to enable HSBC to develop their business in terms of selling effective rights to franchisee
by considering prominent agreement for the short period of time and also by less investment for
the market area.
 Barrier of franchising: It is quite easy and adaptable way but it also have demerits for
their barriers which are involved in terms of having proper control over the power. HSBC
does not have effective control over their business regarding their development for the
franchising and selling products through its brand name and other intellectual property
rights.
M4. Critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome
It depict the barriers for the internationalisation routes which are suggested to HSBC and
also effective for company considering their power ratio. Hence, in terms of eliminating the
impact for those barriers, HSBC tends to make effective use of various techniques (Tallman, Luo
and Buckley, 2018). For example, while acquiring it company tends to provide training to their
staff for the new working culture while franchising is effective for company in terms of taking
entry in market.

D2. Critique significant strategies which are opted for business environment and justify
recommendations
Therefore, globalisation has four prominent aspects which are considered for the effective
growth and success of company within the dynamic business environment. In regard of this, few
market entry routes are discussed which are beneficial for HSBC in terms of taking entry within
the market but all of them franchising is effective. As in this, the rights are being purchased
under the essential norms and laws which are suitable for company regarding its expansion.
CONCLUSION
Therefore, it is identified that global working environment depict the significant
potential, opportunities and concerning practices for the company. Moreover, it tends to
undertake significant challenges and uncertainties which exist and impact the business functions.
Besides this, effective understanding and analysis is conducted in terms of moving to the
international market and consider the working practices for decision making strategies that occur
considering the need of company in terms of having more flexible and diversified market. Lastly,
globalisation is essential process which is helpful for company in terms of achieving goals to
gain competitive advantage.

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